Below we present key information from Water NSW’s pricing proposal for customers in the South Coast valley. This information is not exhaustive and should be viewed in conjunction with our Issues Paper.

Proposed costs for the South Coast valley

The operating costs proposed by Water NSW are higher than we used to set prices in the 2017 Determination. The proposed customer share of operating expenditure for South Coast valley has increased by 40%.

This increase is offset by decreases in:

  • proposed customer share of capital expenditure for South Coast valley, which has decreased by 31%
  • proposed cost of capital, which has decreased from 4.7% to 3.2%.

Proposed customer share of revenue requirement for South Coast valley over 2021 Determination

Data source: Water NSW proposal and IPART analysis

What is driving the change in costs in the South Coast valley since 2017?

Data source: Water NSW proposal and IPART analysis

Proposed prices for the South Coast valley

Water NSW has proposed prices that remain constant for the South Coast valley and therefore do not recover its proposed costs from 2021-22. This leads to a recovery of around 30% of proposed costs for the South Coast valley.

Whilst we aim to set prices that fully recover the customer share of efficient costs, in setting the 2017 Determination it was recognised that Full Cost Recovery (FCR) was likely to be unattainable in the South Coast valley over the 2017 Determination and going forward. In responding to stakeholder submissions, to better meet customer needs and increase infrastructure use, we set prices for the South Coast valley:

  • with reference to an efficient pricing band that considers Water NSW’s customers’ ‘capacity to pay’ in this valley, as well as Water NSW’s avoided costs, rather than continuing price increases towards FCR,
  • to recover about 30% of the customer share of efficient costs, and
  • by changing the tariff structure to lower the usage charge (offset in part by an increase in fixed entitlement charges).

The table below sets out Water NSW’s proposed prices.

Bulk water charges – South Coast valley ($/ML, $2020-21)

Current 2020-21

Proposed 2021-22

Change current to proposed

Bulk water charges ($/ML)

High security

$33.19

$33.19

0.0%

General security

$17.41

$17.41

0.0%

Usage

$18.60

$18.60

0.0%

Source: Water NSW proposal.

Proposed bills for the South Coast valley

The table below shows Water NSW’s proposed bills for 2021-22.

Proposed bulk water bills for South Coast valley ($2020-21)

Current 2020-21

Proposed 2021-22

Change current to proposed

High Security

Small user – 100ML @ 100%

$5,179

$5,179

0.0%

Medium user – 500ML @ 100%

$25,895

$25,895

0.0%

Large user – 1,000ML @ 100%

$51,790

$51,790

0.0%

General Security

Small user – 100ML @ 60%

$2,857

$2,857

0.0%

Medium user – 500ML @ 60%

$14,285

$14,285

0.0%

Large user – 1,000ML @ 60%

$28,570

$28,570

0.0%

Source: Water NSW proposal.

The indicative bills shown below represent indicative bills combining Water NSW’s proposed prices for its bulk water services and the Water Administration Ministerial Corporation’s (WAMC’s) proposed prices for its water management services.

High security bills for South Coast valley (medium user)

Note: See our WAMC Issues Paper for further information on WAMC bills.
Data source: Water NSW proposal and IPART analysis

General security bills for South Coast valley (medium user)

Note: See our WAMC Issues Paper for further information on WAMC bills.
Data source: Water NSW proposal and IPART analysis

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