SA Water plans $26 cut to water bills and there’s more to come if Lucas tightens his purse strings
After years of rising bills from SA Water, the corporation is now promising cuts averaging $26 for city households. And Treasurer Rob Lucas may have a bigger cut in store.
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Water bills will be cut by $26 a year for households — with a bigger cut possible if the State Government decides to help consumers instead of its Treasury Department.
SA Water has lodged a plan to cut prices while continuing to invest in upgrades in the four years from July next year.
The plan, now open for public comment, aims to cut water prices by 1.8 per cent and sewerage by 3.2 per cent — delivering a $26 cut to this financial year’s average annual bill of $1258 for a city household.
“Through our ongoing focus on smart technologies, maximising productivity of our assets, and containing the costs of an expanded capital program, we’re now leading the efficiency frontier in Australia and have made the biggest efficiency gains of our peer water utilities,” SA Water manager of customer delivery Kerry Rowlands said.
“We’re now in a position to deliver a real price decrease, while still covering all of the fundamentals that protect public health and the environment, as well as pursuing initiatives that will deliver sustainable experience improvements for our customers.”
The plan has been lodged with the Essential Services Commission of SA, which will receive public submissions until December 20 ahead of making a draft decision in February and a final decision in May on how much consumers will pay.
The proposal also would cut average prices for primary producers by $299 and city businesses by $138.
SA Water says of the 13 largest utilities in Australia, it has the fifth lowest operating costs per customer for water and the lowest for sewerage.
A bigger cut depends on Treasurer Rob Lucas deciding on how much SA Water is worth.
SA Water’s revenue is linked to what is called the regulated asset base — that is how much all its assets are worth. SA Water is entitled to make a reasonable return on these assets.
In July, Mr Lucas released a report he commissioned by former chair of SA Water Lew Owens into the asset base.
Mr Owens recommended SA Water’s asset base be devalued by at least $520 million, which would reduce its annual income by $31 million.
Mr Lucas is considering the report and the recommended reduction in SA Water’s income which would also reduce the dividend paid to the State Government.
In 2018-19, SA Water’s operating costs were $479 million.
In the July 2020 to June 2024 period, SA Water wants to invest $1.2 billion in water infrastructure, $534 million in sewerage and $143 million in information technology.