Issues paper - IPART is reviewing prices for Sydney Water and WaterNSW Greater Sydney - 1 November 2024

IPART sets the maximum prices that Sydney Water can charge its customers for water, wastewater and stormwater services. These are the prices for most households and businesses in Greater Sydney, including the Blue Mountains and Wollongong. 

We also set the maximum prices that WaterNSW can charge for the water services it provides to customers in the Greater Sydney area. Its main customer is Sydney Water, and it also serves 3 councils (Wingecarribee Shire, Shoalhaven City and Goulburn Mulwaree) and about 60 end-use customers.

The prices we set in these reviews will apply from 1 July 2025 for 5 years.

How will we review the prices

Customers should pay only what water businesses require to efficiently deliver the services their customers need. Our aim is to hold water businesses accountable in a way that delivers good short, medium, and long-term customer outcomes. 

We have a robust and comprehensive framework to assist us in considering these matters. Our framework focuses on customers, costs, and credibility – which we refer to as the ‘3Cs’. It is underpinned by 12 guiding principles which both IPART and water businesses use to develop and assess pricing proposals. Our Handbook provides further information on our 3Cs framework.

What has Sydney Water proposed?

• Sydney Water has proposed bills increase by 18% next year, and then further increases of 7% a year plus inflation. 
• It has proposed a larger increase to its water service charge (fixed charge) than its water usage charge (variable charge). This would affect your bill regardless of whether you use a relatively small amount of water or a large amount of water.
• It has developed 3 outcomes to guide its service delivery for the next 5 years, based on its customer consultation. These are customer experience (including affordability), water quality and reliability, and environmental protection. It has developed 15 targets to track its performance against these outcomes and plans to report annually to customers to hold itself accountable. 
• Sydney Water has proposed $16.5 billion in investment over the next 5 years. Almost 60% of its proposed capital investment ($9.5 billion) over the next 5 years is to deliver new services to growth areas across Greater Sydney, including for new water assets and wastewater treatment facilities. It would spend around $6.3 billion to renew existing infrastructure. 
• It also proposed its operating expenditure (for day-to-day expenses) will increase by 16%. 
• It has proposed to reduce its forecasting risk, by removing a +/-5% deadband when actual water sales differ from the forecasts used to set prices. 

What has WaterNSW proposed for its bulk water customers? 

• WaterNSW has proposed average bill increases of 14% a year. 
• It proposed a 155% increase in capital expenditure, mainly for 2 key projects - Warragamba Dam Resilience ($609.1 million over five years) and Warragamba E-flows ($301.8 million over five years) to modify Warragamba Dam to enable the release of variable environmental flows.
• It also proposed 15.7% increase in operating expenditure, mainly driven by a new operating model, digital costs, employee and contract labour costs, land tax obligations water licencing fees and compliance costs.  
• It has proposed moving to a ‘revenue cap’ form of price regulation which means that it has proposed to adjust the variable usage charge each year to recover (or return) revenue foregone (or received) that is below (or above) the allowed revenue for the previous year.