Canberra’s water prices could rise by 4.5 per cent over the next five years if the industry watchdog approves Icon Water’s latest price proposal.
Icon Water oversees the $2.7 billion worth of water and sewerage assets in the ACT. Every five years, the Independent Competition and Regulatory Commission must sign off on any proposed changes to service charges.
The latest price proposal spans 1 July 2023 to 30 June 2028. Icon Water argues the increase is needed to cover the cost of upgrading infrastructure to meet the growing needs of a growing population.
“We will invest about $700 million over the 2023-28 regulatory period to renew and upgrade our critical infrastructure,” Icon Water said in a statement.
“The proposed investments will result in the combined water and wastewater bill of a typical residential customer using 200 kilolitres of water a year increasing by 4.5 per cent, or $1.11 per week.”
The Commission can also make annual adjustments during the five-year period, taking into account inflation and other market factors. The adjustment for the 2022-23 financial year means a typical ACT household will spend 50 cents less per week on their combined water and sewerage bill. This rate is less than what the average homeowner will pay in Victoria, Tasmania, Western Australia and Queensland.
Many of the ACT’s water and wastewater assets were built in the late 1960s and early 1970s during a period of rapid expansion in Canberra, including our main wastewater treatment plant in Lower Molonglo and multiple water reservoirs around our city.
Icon Water said they plan to upgrade these core elements and other components of the city’s network and treatment systems in the coming years.
For example, throughout this financial year, Icon Water will finish the O’Connor Reservoir upgrade which services North Canberra. They will also continue growing the capacity of the Belconnen Trunk Sewer main and build four new odour control units.
“We have carefully planned our investments for the next five years to ensure we continue to meet our customers’ expectations for service quality while keeping bill impacts to a minimum over the longer term,” Icon Water Managing Director Ray Hezkial said.
“Our proposed projects will help us increase our resilience as a community to increasing climate volatility and support Canberra’s growing population.”
In 2021, Icon Water launched a customer engagement program called Let’s Talk Water and Wastewater. Over 17,500 Canberrans voiced their concerns about water security, levels of service, tariffs, innovation, sustainability, liveability and customer service channels.
Affordability emerged loud and clear as an issue that should underpin any investment decision.
Mr Hezkial acknowledged the rising costs of living but said the same pressures affecting Canberrans also influence the day-to-day costs of providing water and wastewater services.
“While affordability is at the forefront of our decision-making, Icon Water is increasingly facing an uncertain operating environment and must make investments to ensure affordability and service quality can continue to be maintained over the longer term,” he said.
“Recent experience has demonstrated the need for Icon Water to be resilient to disruptions to the ACT region that can be caused by events such as the COVID-19 pandemic, drought, bushfires, extended wet weather and storms.”
The news comes as the ACT becomes the only jurisdiction in the national market where electricity prices will decline in 2022-23.
From 1 July, ActewAGL’s regulated (standing offer) tariffs decreased, on average, by at least 1.25 per cent. For the average residential customers, that’s a saving of about 44 cents a week.
The Commission will now review and consult on Icon Water’s proposal before setting water and wastewater prices that will apply from 1 July 2023.