We are reviewing the prices WaterNSW can charge for bulk water supply to its customers in the Greater Sydney area from 1 July 2020.
WaterNSW is responsible for protecting 16,000 square kilometres of drinking water catchments, and for the renewal, development, and maintenance of dams and other infrastructure that are used to supply customers with bulk water in Greater Sydney. It is also responsible for supplying bulk water that is essential for water users and communities throughout NSW.
In the Greater Sydney area, WaterNSW provides bulk water to:
- Sydney Water Corporation (if you are a customer of Sydney Water, you can find out more about what it means for you here)
- Three Councils – Wingecarribee Shire Council, Shoalhaven City Council and Goulburn-Mulwaree Council
- Around 60 other smaller customers that receive raw and unfiltered water directly from WaterNSW.
WaterNSW is proposing significant investment to maintain its existing assets and to plan and develop new infrastructure to secure water supply in the Greater Sydney area. WaterNSW’s proposal would not increase customer bills over the next four years, because lower interest rates have more than offset the impact of higher investment. But, because the costs of investment are paid over many years, bills may go up in the future if the proposed level of capital expenditure occurs.
We have included a short summary of the information that WaterNSW has provided us below. We have also published a detailed Issues Paper, which includes a full list of questions for stakeholders.
Submissions to our Issues Paper closed on 28 October 2019. We received seven formal submissions and two customer feedback in response to our Issues Paper. Key issues raised were related to expenditure, prices and risk allocations between WaterNSW and its customers.
We also held a Public Hearing on 26 November 2019 at the SMC Conference & Function Centre in Sydney, where stakeholders were invited to present their views on WaterNSW’s proposal or ask questions.
Transcript, agenda and information pack, Secretariat’s presentation slides and WaterNSW’s presentations slides for the public hearing are available on our website.
What has WaterNSW proposed?
To meet its obligations to deliver safe, reliable and sustainable bulk water supply to its various customers in the Greater Sydney area, WaterNSW proposes to make large investments in 2020 to 2024 period to:
- Comply with the required health, environmental and dam safety standards
- Improve water supply resilience, which is particularly important during drought
- Meet its Operating Licence requirements.
In particular, WaterNSW is proposing to focus on maintaining and renewing its assets, including capital works to restore the condition of the Warragamba to Prospect pipeline corridor in the first year. From 2021-22, WaterNSW proposes to focus on delivering its proposed major project – ie, accessing deep water in the Avon Dam. This project will address supply risk in the Illawarra and improve drought resilience.
The costs of WaterNSW’s proposed large investments are mostly offset by the current low cost of finance. As a result, WaterNSW’s proposed revenues to recover its costs from customers in the 2020 to 2024 period is only 2% higher than the revenue we approved for the 2016 to 2020 period. Taking into account forecast growth in demand, the net result is a 1% real decrease in prices.
What does WaterNSW’s proposal mean for water prices over the next four years and in the long-term?
WaterNSW is proposing to have a one-off real bulk water price decrease of 1% in 2020 in real terms (ie, excluding the effects of inflation), then for bulk water prices to stay relatively the same until 2024.
The table shows current and proposed bulk water prices in real terms (ie, excluding the effects of inflation) in the 2020 to 2024 period for the different customers of WaterNSW in the Greater Sydney region. We have included the current prices that apply in 2019-20 for comparison.
If you are a customer of Sydney Water, you can find out more about your price and bill impact here.
If you are a customer of Wingecarribee Shire Council, Shoalhaven City Council or Goulburn-Mulwaree Council, please contact your relevant council to know more about your water price and bill.
Beyond 2024, WaterNSW’s proposed large investments may lead to higher prices. The current low cost of finance means that the impact of investments on prices are minimised in the short term. However, if interest rates rise in the future, this could increase prices given WaterNSW’s large proposed capital expenditure program.
We asked your views on some key issues
We have an in-depth Issues Paper that includes a full list of questions for stakeholders. Some of the key issues that we sought stakeholder responses were outlined below.
- Capital works to date. We asked for your views on WaterNSW’s potential overspending in capital works during this determination period.
- Planning for safe, secure and sustainable water supply. We asked for your views on WaterNSW’s planning for the future to ensure it continues to deliver safe, secure and sustainable water supply.
- Unexpected and uncertain costs. We asked for your views on how we should allocate the risks of unexpected and uncertain costs between WaterNSW and its customers.