Will savings council makes on water flow to ratepayers?
WHEN Gladstone Area Water Board releases its new pricing after June 30, the water flowing from Awoonga Dam might be available up to 30% cheaper for commercial customers, including Gladstone Regional Council, Boyne Smelter and Cement Australia.
Whether or not Gladstone area residents see those cuts remains to be seen.
Since 2000, the Queensland Competition Authority has reviewed GAWB's pricing practices three times.
The most recent report by the authority, released late last month, recommended the board reduce the price of its water.
The report reads: "As a monopoly, GAWB has considerable market power. Price monitoring by the QCA gives customers an independent assessment of how GAWB is managing its costs and whether its proposed revenue for the next five years is reasonable."
GAWB's original submission to the QCA stated proposed revenue of $428 million over the next five years.
QCA suggested a $77 million (18%) reduction.
We understand GAWB has agreed to that, almost in full.
GAWB chief executive officer Jim Grayson said its water prices were already among the lowest in the state, but con
firmed there would be a decrease in water prices over the next five years.
"We don't have a lot of the infrastructure costs that they have in the south east," Mr Grayson said.
"Awoonga benefits from the geography and is a really deep dam. It's the fourth largest in the state and if we have no rain for five years we would still have water."
Since 2010, GAWB has invested in in-house maintenance and more staff.
QCA stated that investment could reduce running costs and allow them to sell water for less.
Also, by tapping into projects on Curtis Island, GAWB has been able to expand its customer base and spread the fixed costs of its business.
The growth of GAWB should lower the price of water for customers including Gladstone Regional Council who set the retail prices for residential customers.
The QCA chairman at the time the report was released, Malcolm Roberts, said residents should note the GAWB charges are only one part of the final bill for the council.
Gladstone Regional Council chief financial officer Mark Holmes said he was waiting for advice from GAWB as to what impact there will be on residential prices.
"This is expected to be received after June 30, when all of the inputs to the GAWB price will be finalised and determined," he said.
"The council is confident, upon review of the (QCA) report, that there will be minimal impact, if any, to water consumption charges for 2015-16."
The price of treated water, of which 20% is used by the council including for residential use, is charged at $3500 per mega litre (2014-15).
GAWB initially proposed to keep the same price for 2015-16, revising it slightly in a second submission, but the QCA recommendation was to lower that price to less than $3000 per mega litre.
We'll have to wait and see what of the QCA recommendations GAWB adopts, and how that is likely to affect your household water bill.