Review of prices for the Water Administration Ministerial Corporation

O Impact of changes to the cost allocation method,
entitlement volumes and usage volumes on bills and prices
in 2013/14
Usage charges fall from $1.44 in 2009/10 to $1.34 in 2013/14 (a decrease of 7%).
Key drivers of price changes (other than the increase in the user share of revenue):
The most significant influence on price changes in the South Coast unregulated
valley has been the draft decision to charge SCA (and HWC) on the basis of their
entitlement volume. This has resulted in a massive increase in total entitlement
volumes, as SCA’s entitlement volume has effectively doubled. This has led to a
significant reduction in forecast bills (per ML of entitlement) in the South Coast
valley.
Forecast usage volumes have increased substantially. Usage charges only
increase marginally, and are far lower than would have been the case has the 2006
Determination usage forecasts been applied.
The dramatic increase in the entitlement volume of the South Coast has increased
the costs that have been allocated to this valley. However, the net effect of the
increased entitlement is to reduce forecast bills substantially in the South Coast.
As forecast bills will fall in the South Coast, the bill cap has not been applied. The
South Coast is one of only 2 unregulated valleys where forecast bills are falling.
Groundwater
Prices and forecast bills:
Forecast bills fall from $6.82 in 2009/10 to $5.33 in 2013/14 (a decrease of 22%).
Fixed charges fall from $4.55 in 2009/10 to $3.67 in 2013/14 (a decrease of 19%).
Usage charges fall from $2.27 in 2009/10 to $1.67 in 2013/14 (a decrease of 27%).
Key drivers of price changes (other than the increase in the user share of revenue):
Coastal valleys have been allocated a substantially smaller proportion of costs as a
result of the change in cost allocation methodology. In addition, increases in both
entitlement volumes and usage forecasts have led to substantially lower fixed and
usage charges, respectively.
As a result, the bill cap has not been to coastal valleys applied in any year of the
determination. Groundwater licence holders in coastal valleys will see the largest
reduction in their forecast bills of any group of users over the course of the
determination.
O.5.12 Far West
Unregulated Rivers
Prices and forecast bills:
Forecast bills rise from $5.78 in 2009/10 to $6.01 in 2013/14 (an increase of 4%).
344 IPART Review of prices for the Water Administration Ministerial Corporation