Water bills will be frozen for the next five years after Wannon Water accepted a rebuke from the state regulator, but it will have to make $23.8m in savings to do it.
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While bills will still increase in line with the Consumer Price Index, Wannon Water decided not to try and push ahead with its plan to increase water bills by $70 for homeowners and $35 for renters after it was rejected by the Essential Services Commission draft price review last month.
Under the initial proposal, the price hike would have kicked in when a four-year $70 government rebate scheme ended in June.
To keep the average household bills steady at $1100 (plus CPI), Wannon Water will have to cut $23.8m from its budget over the next five years.
Wannon Water said that no jobs would be lost as a result of the cost-saving measures, but planned expenditure on capital works would be reduced or deferred.
However, Wannon Water general manager of people and business services Steve Waterhouse said specific savings were yet to be determined.
To achieve the cost-saving targets recommended by the commission, Mr Waterhouse said Wannon Water would also increase its efficiency improvement rate from one per cent to two per cent.
He said Wannon Water accepted that the proposed increase in the capital works program was significant and agreed to reduce the program and spread some works over a much longer period.
“We believe the business case for a new water tower to serve the growing residential area in north-east Warrnambool is strong and we are still planning to include that project in our budget,” he said.
“We don’t expect customer service levels to be impacted by the proposed changes.”
Mr Waterhouse said it was still working through the process in consultation with the commission and a final price determination would be issued in June.
Wannon Water also pointed out that the average household bill had fallen 11 per cent from $1238 to $1100 over six years.
Of the 17 water corporations that it reviewed, the commission’s water director Marcus Crudden said Wannon Water was one of only four that had proposed a price rise on top of inflation.
Consumer Action Law Centre policy officer Patrick Sloyan said in April that customers would have taken a “big hit” financially under the original proposal.
