26 September 2023

ICRC taps water prices up

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Canberrans can expect to pay more for their water and sewerage services from 1 July following a decision by the Independent Competition and Regulatory Commission (ICRC).

ICRC Senior Commissioner Joe Dimasi said Icon Water’s Regulated water and sewerage services 2023-28 report and price direction determined the amount of revenue the utility can earn, and what prices it can charge from 1 July 2023 to 30 June 2028.

“The Commission’s decision will result in a rise in the prices ACT consumers will pay for water and sewerage services for the 2023-28 regulatory period,” Mr Dimasi said.

“The combined water and sewerage services bill for an average household consuming 200kL a year would increase by 6.1 per cent per year on average over the regulatory period,” he said.

“Under our final decision, an average residential customer will pay $1,249 for its annual combined bill in 2023-24, an increase of $72 (or 6.1 per cent) compared to 2022-23.”

Mr Dimasi said that despite this increase, the combined water and sewerage services bills for residential consumers in the ACT would be around the average of comparable jurisdictions.

He said the primary drivers of the price increase were the recent high levels of inflation, higher expected financing costs for Icon Water’s investments in the 2023-28 regulatory period and a significant increase in proposed capital spending by Icon Water – nearly $270 million more than the current period.

“In real terms (excluding inflation) the combined bill is expected to increase at an annual average of 3.1 per cent over the five-year regulatory period,” the Senior ICRC Commissioner said.

“The final price increase of 6.1 per cent determined by the commission is higher than the price increase estimated in the draft report (4.2 per cent),” he said.

“This mainly reflects the movement in actual and expected inflation since October 2022, additional claims by Icon Water for operating expenditure and increased financing costs.”

Mr Dimasi said that under ICRC’s final decision, prices were around two percentage points lower than Icon Water’s December 2022 proposal.

He said the difference reflected the Commission’s decision to reduce Icon Water’s allowed revenue requirement by 5.1 per cent, or $102 million, and to seek greater efficiencies.

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