Setting water prices

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In most parts of NSW customers have no choice about who supplies their water. Our role is to independently set prices for water to reflect the efficient cost of providing services and ensure fair prices for customers.

In Sydney, the Blue Mountains, Illawarra, the Hunter, Central Coast and Broken Hill we set the prices charged by:

  • Sydney Water and its bulk water suppliers, WaterNSW and Sydney Desalination Plant
  • Hunter Water
  • Gosford Council and Wyong Council (now the Central Coast Council)
  • Essential Energy (for Broken Hill)
In other rural and regional areas IPART sets the prices charged by WaterNSW and the Water Administration Ministerial Corporation.
 
When we review water prices we consider a range of matters, including: 
  • the cost of providing the service
  • consumer protection against abuse of monopoly power by a water utility
  • the need to promote competition in the supply of the service
  • the need for greater efficiency in the supply of the service to reduce costs to consumers and taxpayers
  • appropriate rates of return on public sector assets
  • the social impact of our determinations
  • the need to maintain ecologically sustainable development and protect the environment. 

Recycled water pricing

IPART has established a pricing framework for public water utilities’ recycled water schemes. We allow the costs of a public utility’s recycled water scheme to be recovered from general water and/or sewerage prices to its broader customer base when:

  • it is the least cost way of delivering water and/or wastewater services, while complying with environmental and other regulatory requirements
  • it avoids or reduces costs the broader customer base would normally pay (for example, expanding sewage treatment plants), or
  • the utility’s broader customer base is willing to pay for the external benefits the scheme generates.

Any residual costs of the recycled water scheme are then recovered from recycled water customers up to their willingness to pay and/or from developers via recycled water developer charges, subject IPART’s pricing principles and developer charges determination.

Our framework recognises the system-wide benefits of recycled water, and ensures that recycling will be viable where the benefits it creates for customers exceeds its costs.  This provides incentives to get the right solutions in place to meet the demands of customers and the broader community. See IPART’s Final Report, Fact Sheet and Stakeholder update.

Wholesale water and sewerage pricing

In NSW, private water businesses have entered the market under the Water Industry Competition Act to provide and sell recycled water services and on-sell ‘wholesale’ water and wastewater services they purchase from public water utilities such as Sydney Water and Hunter Water.

In 2017, IPART completed its review of the regulatory and pricing approach for Sydney Water and Hunter Water’s wholesale water and sewerage services to such private water businesses. See IPART’s Final Report and Fact Sheet.

As part of this review, IPART did not set a price for the ‘wholesale’ water and sewerage services Sydney Water or Hunter Water provides to privately owned on-sellers who operate recycled water plants. Rather, Sydney Water or Hunter Water and the private water businesses can negotiate prices that best reflect the costs and benefits of each scheme. IPART will only set a price if the parties can't reach agreement and one of them asks us to determine prices via a scheme-specific review.

If we were asked to set Sydney Water’s (or Hunter Water’s) wholesale prices to an on-seller with a recycled water plant, we would discount prices to reflect the net benefits that the recycling scheme provides to Sydney Water’s broader customer base (for example, if it reduced the need for Sydney Water to invest in sewage treatment). We would also ensure the wholesale services provided to the on-seller are priced in a way that does not unreasonably add to the prices paid by Sydney Water’s other customers.

We have developed a request form and accompanying guide to support wholesale customers and wholesale service providers prepare for, request and participate in a scheme-specific review. 

Request form for scheme-specific price review

Complete the request form if you are a wholesale customer or wholesale service provider and wish to request that IPART undertake a scheme-specific review to determine a price for a wholesale service(s).

If you are considering requesting a scheme-specific review, we recommend you contact the Water Pricing Team at IPART on 9290 8400 or email water@ipart.nsw.gov.au to discuss your request.

Request form for scheme-specific price review

Attachment A to request form - Inputs for section 4.2  

Guideline for scheme-specific price review requests

The guideline provides an outline of the process for a scheme-specific review.  It also outlines what a scheme-specific price review involves and explains the general principles and approach we would use to undertake a scheme-specific review.

Guideline for scheme-specific price review requests

Have Your Say
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