Seqwater bulk water price review 2018-21 - final report released

The Queensland Competition Authority (QCA) today published its final report recommending bulk water prices for south east Queensland (SEQ) for 2018-21 after considering submissions received throughout the review process.

The State Government determines bulk water prices across the 11 SEQ council areas and has directed the QCA to review the costs of the sole supplier, Seqwater, and recommend prices for consideration.

QCA Chairman Professor Roy Green said bulk water charges account for about 30% of an average household’s water and sewerage bill.

Professor Green said that for historical reasons, bulk water prices had varied from council to council but a single common price for a kilolitre (1,000 litres) was expected to apply by the end of the decade across SEQ.

“Eight of the councils in SEQ have already reached the common price, with the Sunshine Coast, Noosa and Redland City needing to make up some more ground,” Professor Green said.

“The State Government has asked the QCA to present two pricing options, one that would see the common price reached by all councils in 2019-20 and another where the common price would be reached in 2020-21.

“Under the first option, the current bulk water price for the eight councils paying the common price – Brisbane, Gold Coast, Ipswich, Lockyer Valley, Logan, Moreton Bay, Scenic Rim and Somerset – of $2.82 per kilolitre would rise by 5.2% in 2018-19 and 2.5% in each of the next two years.

“This would mean that the bulk water component of the bill of an average household – using 160 kilolitres per year – in these council areas would rise by $23.20 in 2018-19 and $12 in each of the next two years.

“The price for Sunshine Coast and Noosa would increase by 8% in 2018-19, 7.4% in 2019-20 and 2.5% in 2020-21, while the price for Redland City would rise by 9.3%, 8.5% and 2.5%.

“Under this option, the bulk water component of an average household’s bill in Sunshine Coast and Noosa would increase by $33.60 in 2018-19, $33.76 the following year and $12 in 2020-21. In Redland City, the increases would be $38.08 for each of the first two years and $12 in 2020-21.

“Under the second option, the common price applying to the group of eight councils would rise by 3.5% in each of the three years, resulting in increases for the average household of $16 to $17 each year.

“The second option would provide more gradual increases for the other three council areas – over a three-year span instead of two – with Sunshine Coast and Noosa seeing price increases of 6.5%, 6.1% and 5.7%, while Redland City consumers would see rises of 7.3%, 6.8% and 6.4%.

“This would see average households facing increases of about $27 each year for Sunshine Coast and Noosa and $30 each year for Redland City.

“Under this second option, a common price of $3.12 per kilolitre would apply to all 11 councils in 2020-21.”

Professor Green said that, in response to severe drought, the State Government took over control of bulk water supply from the region’s councils in 2008. To reduce the price impact of significant investments made in water infrastructure in response to low-water availability, the State Government decided that bulk water price increases for the region should be phased-in over time through a bulk water price path.

“Prices were initially set to recover less than the cost of supplying bulk water, with the accumulated under-recovery – or ‘price path debt’ – to be gradually repaid in full by 2028.”

He said public involvement was an integral part of the QCA’s review process and 11 stakeholder submissions had been considered by the QCA in making its recommendations.

The State Government will decide whether to accept the QCA’s final pricing recommendations.

The final report is available on the QCA’s website.

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