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NSW water prices now cheapest in Australia

NSW residents are set to pay some of the lowest water prices in Australia following the Independent Pricing and Regulatory Tribunal’s (IPART) final determination on Sydney Water tariffs.

The utility will be permitted to charge its residential customers $1.97 per KL as of July 1, the renewed price following a $0.31 per KL drop in water-usage charges.

The Australian Bureau of Statistics Water Account (2013-2014) shows the average Australian household pays $3.08 per KL, but NSW will now succeed NT ($2.19 per KL) as the cheapest state.

Sydney Water Managing Director Kevin Young said that reducing the average household water bill by $100 per annum has always been the utilities objective, with IPART’s draft determination a reflection of the company’s initial proposal.

“One year ago, we proposed a $100 annual reduction for the typical customers’ bill compared to inflation. While there have been some movements, [IPART’s determination] is about $100 saving for the typical family bill,” Young said.

“The proposal was that we would pass all of the savings that we have achieved over the last four years on to customers. We set a target for the future, which is where the $100 target came from.”

Although Sydney Water is on track with it’s proposed customer savings, Young said that there is still work to do, with IPART asking the utility for an extra $46 million in operating cost efficiencies and $300 million in capital infrastructure efficiencies.

But the final revenue allowance is $9.6 billion over a four-year period and Young said that Sydney Water still has plenty of money to spend on servicing and infrastructure, despite IPARTS efficiencies request.

“We are excited by the fact IPART agreed to over $2 billion worth of infrastructure spending. It is still a massive capital program,” Young said.

“We are making these major reductions in cost and driving greater efficiencies, the discussion was that we might have to drop service levels, but we won’t.

“We are going to commit to maintaining or improving services to customers and the environment. A lot of the community are doing it tough. We are just doing our part by driving efficiencies in the business.”

IPART Chairman Dr Peter Boxall said revised allowances for operating and capital expenditure are now $78 million more than that proposed in the March 2016 draft determination.

“This final determination strikes a good balance between increasing Sydney Water’s efficiency to enable savings to be passed onto customers, while maintaining the revenue required to meet its required service levels,” Boxall said.

“Under our decisions, the annual water and wastewater bill of a typical residential house will fall by about $100 in 2016-17, with small businesses using similar volumes of water and discharging similar volumes of wastewater to the sewerage system realising the same savings.

“Beyond 2016-17, bills will increase at the rate of inflation.”

Further to residential price reductions, large non-residential customers will be able to negotiate unregulated pricing agreements with Sydney Water for the first time.

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