Water rates on the up in five year plan

The plan outlines South Gippsland Water’s proposed service standards, capital and operating expenditure for a five year period, 1 July 2013 to 30 June 2018 and goes on to outline the resulting prices over this period to cover forecast expenditure.

South Gippsland Water Managing Director Philippe du Plessis said: “Given the current economic environment, South Gippsland Water has aimed to deliver a water plan that comprises minimal price rises but also delivers sustainable high quality water treatment and wastewater services for local communities and businesses.”

He said the corporation was trying to keep price rises for customers to a minimum with an annual weighted average increase of 2.5 per cent.

As part of the water plan approval process proposed prices will be reviewed and if appropriate approved by the Essential Services Commission.

As South Gippsland Water is a state owned corporation, prices proposed in the water plan have been calculated to cover the corporation’s capital and operating costs and do not deliver profits for private investors.

Proposed weighted average price increases excluding CPI are:

• 2013/14   4.5 per cent;
• 2014/15  2.0 per cent;
• 2015/16  2.0 per cent;
• 2016/17 2.0 per cent;
• 2017/18 2.0 per cent.

This equates to a cumulative weighted average total of 13.3 per cent over the five years, an annual average of 2.5 per cent.

CHARGES

South Gippsland Water operates a two part retail water tariff. The first is a fixed service charge which reflects the cost of making water available to individual properties. This helps ensure customers receive a reliable water supply that meets regulations including the Australian Drinking Water Guidelines. The second component is a volumetric charge which is variable and reflects actual water used.  Following customer consultation, South Gippsland Water has minimised increases in the fixed service charge and placed more focus on increasing, albeit gradually, the volumetric charge, in an attempt to encourage sustainable water use and provide customers with greater control of their accounts.

South Gippsland Water also operates a fixed wastewater service charge for domestic properties which incorporates the costs of making sewerage services available to properties as well as the costs of treatment.

EXPENDITURE

Operations

South Gippsland Water will spend approximately $16M a year on maintaining and operating water and wastewater infrastructure. The price increases contribute to the operation of 10 separate water supply systems and 12 separate wastewater systems. It includes the upkeep of 13 reservoirs, 18 service storages; over 1,000km of water and wastewater mains and over 60 pump stations.

Capital Works

Projects are planned to continue to update ageing infrastructure with water and sewer replacement or rehabilitation works planned across the entire region. These projects ensure South Gippsland Water continues to meet service standards and regulatory requirements. The Wonthaggi Sewer System requires an upgrade to cater for the increased development of the township. Regional growth is a significant contributor to capital expenditure, with works for projects such as the Poowong, Loch and Nyora Sewerage Scheme and the Northern Towns Supply Connection works (to service this expanding region) contributing to much of the corporation’s capital works program. The Northern Towns Supply Connection works are assumed to be funded by yet to be confirmed State Government funds.

CUSTOMER COMPENSATION

Under new guidelines from the Essential Services Commission, South Gippsland Water aims to implement a Guaranteed Service Level compensation program, where customers who receive unacceptable levels of service are compensated.

COMMENT

South Gippsland Water is actively seeking feedback from customers and the regional community. The draft plan will be open for comment until August 2012 before a Final Water Plan is submitted to the independent water regulator, the Essential Services Commission, in September 2012 for approval. Once approved, prices will be set for a five-year period from 1 July 2013 to 30 June 2018.

South Gippsland Water welcomes comment and feedback. Customers can contact South Gippsland Water on 1300 851 636 to request a copy of the Draft Water Plan III or download a copy from the South Gippsland Water Website www.sgwater.com.au along with customer fact sheets.

Feedback can be given by email to [email protected], by post to PO Box 102, Foster 3960, or by calling 1300 851 636.

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