IPART has completed its first review of the prices Sydney Water and Hunter Water can charge for wholesale water and sewerage services. Prior to this, prices for these services were privately negotiated.
Wholesale customers purchase these services and on-sell them to their end-use customers, such as households and businesses. As on-sellers, these businesses compete with Sydney Water and Hunter Water for end-use customers.
Many wholesale customers also supply recycled water.
The wholesale prices we set apply to new schemes from 1 January 2018. The prices do not apply to schemes that:
- have a supply agreement or connection with Sydney Water or Hunter Water before 1 January 2018, or
- operate a recycled water plant.
For these schemes, parties can privately negotiate prices, or request that IPART set scheme-specific prices. We have outlined a 4-month process for scheme-specific reviews, which could be undertaken at the same time as a wholesale customer’s licence application review.
We will consider the cost impacts of recycled water plants in our scheme-specific reviews. Under our framework, the larger the cost saving to Sydney Water or Hunter Water from a wholesale customer’s recycled water plant, the lower the wholesale price (all else being equal).