Most Sydney households will see smaller-than-expected increases in their water bills over the next four years, but big businesses and people living in apartments will experience larger rises under draft prices to be released today by the NSW pricing authority.
The Independent Pricing and Regulatory Tribunal has knocked back Sydney Water’s request for a 15 per cent increase in water bills because Sydney’s desalination plant has halved its output and interest rates have dropped, lowering the water company’s capital costs.
Sydney Water was also expected to achieve efficiency savings and slash its capital spending by $500 million.
Household water and sewerage bills would rise minimally over the new four-year pricing period from July next year to June 2016.
If the desalination plant started operating at full capacity again, average household bills would rise by up to $38 a year.
The chairman of the tribunal, Peter Boxall, yesterday said water bills for the average household would decrease by $57 by 2016, not taking inflation into account. After inflation, bills would rise by a ”modest” amount.
However, water charges for apartment residents would rise by about $18 a year before inflation was added.
The draft water prices for the four years will be released today for consultation before a final report on June 15.
Mr Boxall said the pricing structure had changed to stop cross-subsidisation between customers. On average, people in apartments on shared meters pay about $70 per year, but some pay as little as $5 to $10.
”This imbalance influenced our decision to introduce a standard water service charge for all residential customers,” he said. ”As a result, many households in units with a common meter will now pay a higher water service charge than before.
”Those in houses and individually metered units will pay a lower water service charge.”
People who live in apartments would be charged for stormwater drainage.
Bills will almost treble for owners of non-residential buildings of between 1000 and 10,000 square metres floor space, from $200 to $580 by 2015-16 in stormwater drainage charges, together with steep rises of about 50 per cent in meter-based service charges to $1460.
These higher charges will affect about one quarter of Sydney Water’s customer base.
The O’Farrell government has sought to limit price rises by slashing Sydney Water’s capital spending plans by $484 million, as well as cutting planned spending allowed under previous pricing determinations by $65 million.
Sydney Water has told the tribunal the cuts will adversely affect service quality, demanding that $285 million of the cuts be reinstated, although that request has been denied.
The opposition spokesman for water, Luke Foley, said the O’Farrell government’s profit and dividend demands had forced Sydney Water to request ”extraordinary increases” to household water prices.
”The independent regulator has rightly knocked them back,” he said.
