The average yearly water bill for homeowners will be frozen at $1110 for the next five years after the independent regulator on Tuesday handed down its final decision on Wannon Water’s pricing proposal.
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Wannon Water had planned to slug residents with a $70 price hike but the Essential Services Commission stepped in and rejected the move, slashing $16.5m from its operating budget.
In its initial pricing submission, Wannon Water had sought an additional $25.41m in operating expenditure – the highest of all regional water corporations – partly to help cover the increasing wages bill.
The commission’s water director Marcus Crudden said that most of the state’s other corporations had been able to absorb increasing labour costs because population growth brought in enough extra revenue.
Mr Crudden said it acknowledged Wannon Water faced a tougher challenge because population growth was as little as a quarter of what it was for other corporations and the commission had now made some allowance for that.
“Without putting up your prices, you’ll earn more money each year simply because you get a population growth as well as inflation, they’ve argued simply for above inflation increase,” he said.
“We’re saying you should be able to absorb most of the cost.
“The positive message is that prices will stay just below inflation.”
The commission also rejected an request by Wannon Water to lift its rating from “basic” – the lowest of any corporation – effectively handing it a penalty of a one per cent cut to revenue.
However, Mr Crudden said it was not a huge penalty and left the door open for a possible upgrade during the next five years once the commission saw evidence of cost savings.
Wannon Water has committed to finding efficiencies of $2.6 million over five years from energy costs, goods and services and investment in technology. It will also investigate working with industry and collaborative purchasing to reduce costs.
It said employee numbers would remain stable at 207 equivalent full-time staff.
Wannon Water managing director Andrew Jeffers said yearly bills had fallen 12 per cent over the past six years, from $1262 to $1110 for households. Renters will pay $201.
Mr Jeffers highlighted the challenges faced by Wannon Water which he said had 46 metres of water mains per customer – the highest in the state – which placed increasing pressure on operating and asset renewal costs.
Wannon Water also unveiled its Water for Community program for not-for-profit organisations such as recreation reserves, sporting facilities, showgrounds and swimming pools and provides rebates of up to 40 per cent, a yearly saving of up to $7242.
Mr Jeffers said that over the next five years Wannon Water would also continue to improve the taste, smell, hardness and clarity of the drinking water.
The pricing submission included $2.1 million for projects that will reduce carbon emissions and save $1.2m in annual operating costs as part of a plan to be carbon neutral by 2050.
It will also invest more than $160 million in capital works projects over the next five years highlighted by a $30-$40 million upgrade of the Warrnambool Sewage Treatment Plant and a new $4.3m water tower in the Wangoom Road area.
Other projects include a new $3.5m facility in Hamilton, a $2.8m facility in Camperdown to manage biosolids for re-use and a $2m water supply bore at Port Campbell.
