Average Canberra households will pay $42 less a year for water as a result of the Independent Competition and Regulatory Commission’s latest five-year price determination.
The ICRC said the decision determined the amount of revenue Icon Water could earn, and what prices it could charge, over the period 1 July 2018 to 30 June 2023.
Senior Commissioner Joe Dimasi said it would mean a fall in prices ACT consumers pay for water and sewerage services in 2018-19, despite a $16 increase in the supply charge.
“A typical Canberra household consuming 200kL per year will see a fall of 3.5 per cent (or about $42) in their annual bill in 2018-19 compared to 2017-18,” he said.
This means a drop from $1200 a year to $1158 in 2018-19, while for those using 400kL a year the decrease will be from $2254 to $2114.
“Annual bills are then expected to increase by around 2 per cent each year for the rest of the regulatory period, which is roughly in line with expected inflation,” Mr Dimasi said.
The ICRC said annual bills for non-residential customers would fall by between 1.8 and 8.7 per cent in 2018-19 compared to 2017-18, depending on water usage and the number of billable fixtures.
Over the 2018-23 regulatory period, these bills would increase by between 0.4 per cent and 3.6 per cent.
Under the Commission’s final decision, prices will be lower than initially proposed by Icon Water in June 2017 due to efficiencies in Icon Water’s planned operating and capital
expenditure, lower interest rates and the Commission’s decision on how to calculate the return on Icon Water’s capital investments.
The amount of revenue Icon Water can earn from water and sewerage tariffs (the net revenue requirement) is $1,547 million over the five-year regulatory period, 3.2 per cent lower than Icon Water’s initial proposal of $1,598 million.
The ICRC said the combined water and sewerage services bills of residential consumers in the ACT would remain lower than the average of comparable jurisdictions.
Icon welcomed the decision, saying that almost 100 per cent of residential customers would see a reduction in bills this year, with bills expected to stay in line with inflation over the following four years.
“The price reduction has allowed for measured and gradual rebalancing of tariffs which will improve affordability while continuing to promote water conservation. The annual water supply charge will increase by $16 in 2018-19 which will be more than offset by the reduced volume charges,” Icon said.