Concerns changes could force up water price by 37%
GLADSTONE residents could pay the highest rate per kilolitre for water outside south-east Queensland if proposed changes are implemented, Gladstone Regional Council has warned.
In its submission to the Queensland Competition Authority's 2020-25 price review for Gladstone Area Water Board, the council said it had concerns about GAWB's proposed changes which could force up the price of water for residents by 37 per cent per megalitre.
It's the latest submission made to the review after concerns about the proposed price increase and a lack of clarity on how it would affect different customers.
In GAWB's submission for the five-yearly review on prospective water prices, it said an increase to prices was necessary to recoup the increased capital expenditure, which it forecast would cost $179 million between 2020-25.
The submission said prospective prices for 2021-25 were calculated based on a five-year planning and price smoothing period, resulting in an average 9 per cent increase in prices network-wide.
Price changes would vary between customers, it said.
The council submission, signed by chief executive Leisa Dowling, said the proposed changes would result in a per kilolitre cost to residents of $2.51 by 2025.
It said this would mean Gladstone residents would pay the highest rate for a major urban water service provider outside of south-east Queensland.
"The extent of the proposed price increase is significant and therefore all aspects of GAWB's submission need to be appropriately evaluated by the QCA to ensure household and business impacts are minimised within the Gladstone region's community," the council said.
GAWB chief executive Darren Barlow said the price of water to domestic customers was determined by several factors.
"The total cost of delivering water to domestic customers is a combination of the bulk water price (of which GAWB is just one supplier), plus the added costs of distribution and retail water services," Mr Barlow said.
"GAWB cannot comment on the total cost of water for domestic customers, as it is outside our control - we are only one part of a complex supply chain."
Mr Barlow said the current investigation covered prospective water prices for July 1, 2020 to June 30, 2025 and would ensure GAWB continued to operate "prudently and efficiently".
The council also raised concerns about GAWB's increase to expenditure, which between 2016-20 was about $122.48m, $20.95 million more than forecast.
GAWB's forecast capital expenditure for the next five years is $179 million, compared to previous projections that expenditure would be $121 million between 2020-35.
The council recommended the QCA conduct a "detailed ex-post analysis" to ensure overspending was not occurring at the expense of the Gladstone community.
It also called for GAWB to change its proposed pricing structure to ensure pricing for residents was different to pricing for industrial customers.
Mr Barlow said the QCA review would also provide an independent assessment of GAWB's operating expenditure.
He said the proposed capital program was largely made up of asset replacement activities and works required to meet legislative requirements.
He said the work was necessary to ensure ongoing reliability.
The QCA is expected to deliver a draft pricing decision in February, 2020.