Water Pricing

Water prices in Victoria  

Water prices in Victoria are overseen by the independent economic regulator, the ESC. Our members prepare submissions for the ESC, setting out their proposed service standards based on regulatory obligations and customer expectations, and the associated revenue requirements for the next regulatory period (typically four years). The ESC assesses these submissions and engages in a consultation process, before making price determinations for each water business. 

This process is shown below in Figure 2.  For more information on the factors involved in setting prices, see the report, Victorian Urban Water Sector: Value for Money, prepared for VicWater by Frontier Economics. 

 

Figure 2: Price submission process 

Figure-2-Price-submission-process

Compared to other parts of AustraliaVictorian customers have consistently enjoyed lower water bills (Figure 3).  Several factors such as geography, available water sources, infrastructure replacement timelines and industry structure play a role in these differences. 

 

Figure 3: Comparison of national water and wastewater bills – median values. Source: NPR Framework. 

Figure-3

Furthermore, Victorian water bills are affordable (Figure 4). Noting that all bills are below 1.5% of household disposable income, these compare to energy bills which can be as high as 6.4% among low income groups (ACOSSand rising due to market and climatic factors. 

 

Figure 4: Typical bill as a proportion of disposable income, including imputed rent and services in kind. Source: WSAA, ABS. 

Figure-4

These benefits have been provided without compromising service delivery. Total unplanned interruptions (across water and wastewater services) for urban water utilities in Victoria have fallen by 15% since 2008, despite connections growing rapidly in some areas. Water quality complaints for Victorian urban water utilities have fallen by over 70% since 2005/06.

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