The information below is taken from Hunter Water’s 1 July Pricing Proposal; note that Hunter Water proposed some changes in its submission to our Issues Paper. We have also published an Overview of key issues in our review of Hunter Water’s 1 July Pricing Proposal, along with a detailed Issues Paper. Submissions to our Issues Paper have now closed.
Hunter Water proposed prices that will increase bills over time
Hunter Water's pricing proposal would lead to bill increases in each of the next five years. For typical residential customers, the total increase over five years would be around:
- 24% for a typical customer in a house receiving water, wastewater and stormwater services from Hunter Water, which is 10% above inflation (assumed at 2.5% per year). Note: not all customers receive stormwater services from Hunter Water. This increase would be 23% (including inflation) for those who don't.
- 34% for a typical customer in an apartment receiving water, wastewater and stormwater services from Hunter Water, which is 18% above assumed inflation. This increase would be 33% (including inflation) for those who don't receive stormwater services from Hunter Water (ie, they simply receive water and wastewater services).
For non-residential customers, bill increases would range from 17% to 44% over the 5-year period, which is 3% to 27% above assumed inflation. The variation is driven by differences in meter size and trade waste output.
The table below shows the impact on bills for some 'typical' residential customers.
Indicative bill impacts for typical residential customers ($ per year)
Note: The bills include assumed inflation of 2.5% annually.
These bills are based on the following proposed prices for water, wastewater and stormwater services.
Prices for residential customers
The charge for water usage currently makes up around 36% of a typical water and wastewater bill. Hunter Water is proposing that the water usage price increases, and the fixed water charge decreases. The water usage price plays an important role in balancing the amount of water used by the community with the desire to conserve water. Hunter Water’s proposed water usage price is informed by its estimate of the long-term costs of supplying water, including the costs of potential supply augmentation projects and customer feedback that suggested the majority of customers preferred higher usage prices and lower fixed (or service) prices.
Hunter Water is also proposing that the fixed wastewater charges increase, to recover its proposed increased expenditure on its wastewater network.
Hunter Water's proposed prices for residential customers are set out in the table below.
Proposed prices for residential customers excluding inflation ($2019-20)
Prices for non-residential customers
Hunter Water's proposed prices for non-residential customers are set out in the table below
Proposed prices for non-residential customers excluding inflation ($2019-20)
Note: this table only shows a sample of meter sizes available. For the full list, see our Issues Paper or the Hunter Water proposal, Technical Paper 8.
Hunter Water is proposing increasing its expenditure on delivering services
Hunter Water manages dams and bore fields, and a network of pipes, pumps and treatment plants to deliver safe drinking water, and treat and safely discharge wastewater. Hunter Water's activities and services are subject to various conditions such as drinking water quality guidelines, regulatory targets and environmental standards.
Hunter Water proposes increasing both its operating costs and capital expenditure compared to its costs over the past four years. It states this expenditure will help manage emerging challenges and risks such as non-compliance with environmental and service standards, and the risk of failure of critical assets, to maintain service delivery. Hunter Water states that its level of expenditure in recent years has led to increases in risks based on a recent review of its risk framework.
In broad terms, the proposed expenditure aims to:
- Meet existing and new mandatory standards, including to ensure its environmental impacts are suitably managed and mitigated
- Address deteriorating assets, moving to a more proactive asset maintenance program, and continuing renewals of critical infrastructure.
- Upgrade digital technology, to improve cyber security, efficiency and the customer experience (eg, by adding digital billing).
- Service population growth: by building new infrastructure and increasing the capacity of treatment plants.
We will review all aspects of Hunter Water's proposal, particularly its proposed expenditure plans and prices. We have engaged expert consultants to review Hunter Water's key assumptions and proposed expenditure.
Hunter Water used a number of methods to engage with its customers in developing its proposal. In addition to paying for mandated service levels, over 70% of the customers surveyed indicated that they were willing to pay more for projects to improve the amenity of stormwater channels and to increase the use of recycled water in the community. Hunter Water has proposed spending $22.8 million on these projects, which would add around $4 to $5 per year to residential customer bills.
Read more in our Issues Paper or Hunter Water's Pricing Proposal
Hunter Water is proposing changes to the way it charges trade waste customers
For businesses that discharge high strength wastewater (trade waste) into the sewer network, Hunter Water is proposing changing the structure of its trade waste disposal fees — increasing administration costs and changing the basis for charging for its treatment costs. The proposed trade waste bills would increase significantly for some customers depending on the type of waste discharged. Click here to see the changes in prices.
Hunter Water is proposing removing discounts for some large customers
Hunter Water proposes to phase out price discounts to some non-residential customers with water use above 50,000 kL per year. Around 19 customers currently receive various discounts depending on their location in Hunter Water's network. Hunter Water is proposing removing this discount, so all customers would pay the same usage price for water. The removal of the discount to large customers would mean Hunter Water could decrease prices by around $10 per year for each residential customer. The bill impact on these large customers would vary based on customer location and water use. Click here to see the changes in prices.