ACTEW Water raises prices because of water conservation

By 31 July, 2012 7

ACTEW Water expects an increase in Canberra’s water charges starting next financial year, the ABC has reported. This will apparently be due to water restrictions, water consumption and new water security projects.

It seems as though we may have gotten a little carried away by conserving water to the point where ACTEW has to raise prices because of their lower revenue.

Managing director Mark Sullivan says the cooperation is proposing a hike in fixed water charges and a lower usage threshold before higher variable charges kick-in.

“We should expect that there will be a reasonable price increase for water in the early part of the next five year period,” he said.

“That reflects the capital program, and it will be dependent on what the (Independent Competition and Regulatory) Commission does with the unearned revenue figure, and some very other important consideration that they’ve got to put into this.”

ACTEW Water has also released a submission to the Independent Competition and Regulatory Commission, which discusses the setting of water and sewerage service prices over the next five years.

Mr Sullivan said, “I encourage the community to not only review our submission, but take the opportunity to make their own submission if they have a view on how water and sewerage prices should be set, this is a one in five year opportunity to do so.

“As part of this review, the ICRC will be considering how ACTEW Water is performing in terms of prudently managing the operation and continued improvement of Canberra’s water and sewerage infrastructure – we look forward to the outcomes of this process.”

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7 Responses to ACTEW Water raises prices because of water conservation
#1
AG Canberra10:02 am, 31 Jul 12

They could have saves $2.5 million by not changing their name……

So we have ‘permanent water conservation measures’ and permanent cost increases. classic case of ACTEW Water having their cake and eating it too!

#2
steveu10:47 am, 31 Jul 12

When u privatise an essential service, I guess you can only expect profit gouging. Which is what it is. Canberrans have been very responsible in their water use over the last decade, and this is how they are rewarded. Nice one.

#3
Thumper11:01 am, 31 Jul 12

I love these guys.

They have the best business plan ever.

In drought they slap on water restrictions, then charge more because no-one is using water.

Then when the dams are full they charge more to make up for lack of water usage during said drought.

#4
VYBerlinaV8_is_back11:40 am, 31 Jul 12

The dams have been basically full for 18 months now. Will be interesting to see if this summer is drier than the last two.

#5
davo10112:26 pm, 31 Jul 12

VYBerlinaV8_is_back said :

The dams have been basically full for 18 months now. Will be interesting to see if this summer is drier than the last two.

Most of the models are predicting El Nino conditions in the new year so my money is on yes.

#6
Chop711:32 pm, 31 Jul 12

I wish they would just say

“yup, we @#$%ed up on the costs of the dam”

#7
chewy142:58 pm, 31 Jul 12

Thumper said :

I love these guys.

They have the best business plan ever.

In drought they slap on water restrictions, then charge more because no-one is using water.

Then when the dams are full they charge more to make up for lack of water usage during said drought.

The problem is the way the price is fixed by a regulator on a 5 year cycle.

The regulator basically guesses how much water people will use during a 5 year period and then allows them (ACTEW) to charge a certain amount based on that.

The capital and other expenditure is pretty much fixed (dam F*ups excluded) but their revenue is variable depending on the guessed usage amount being right.

When usage is so variable to weather and climate we end up in the situation we have now where the regulator overguessed and the price has to be raised to cover the expenditure.

It’s a hell of a way of doing things.

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