It emerged this week that Wannon Water wanted to lift home-owners’ water bills by about $70 a year.
The increase, about $35 for renters, is the second-highest price hike proposed by a water authority in the state. The planned rise would come after a four-year $70 government rebate scheme ends on June 30. Instead of finding efficiencies, the authority planned to shift the cost back to customers.
But the Essential Services Commission is expected to reject Wannon Water’s planned rise and its proposal to raise $360m over the next five years. Instead, the commission is urging Wannon Water to cut its revenue plan by 6.7 per cent or $23.8m.
The commission, which held a hearing in Warrnambool this week, said in a draft review of Wannon Water’s plan that the authority needed to manage staff costs above inflation through efficiency improvements or increase revenue through customer growth. “We found little evidence the corporation has sought to minimise costs or prices on behalf of its customers,” the commission said.
It indicated Wannon Water’s prices “were not based on reasonable assumptions about prudent expenditure”. In customers’ eyes, the plan was a blatant cash grab. The ESC is doing exactly what it was set up to achieve – look out for customers and keep excessive rises in check.
Wannon Water’s plan failed to recognise its customers’ ability to pay. The region’s dairy farmers have been through hell in the past two years with low milk prices and any business operator knows that if farmers are earning, they are not spending and that has an impact across the broader economy, including jobs and pay rises.
The devastating St Patrick’s Day fires are also putting a squeeze on the region’s economy and that impact will be felt for some time. Wannon Water’s plan was hatched before the fires, so it could not have predicted that. But south-west Victorians have copped significantly higher electricity costs and the prospect of increased water bills cuts deep.
Just like householders are being forced to tighten their belts, Wannon Water needs to do the same. Councils have been put under the spotlight in recent years and they will be again as they prepare to release their draft budgets and rate rise in coming weeks. Residents expect prudent spending. Wannon Water needs to go back to the drawing board and come up with a plan that balances its needs against the ability of customers to pay.