A typical household water bill would fall by eight per cent next financial year before increasing by about three per cent per year until 2023, under a new price path proposed by the Independent Pricing and Regulatory Tribunal.
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Apartment dwellers would also have a slight drop in their bills in 2020-21 before they increase by about four per cent per year until 2023-24.
In overall terms, a typical household bill will increase by 0.5 per cent and a typical apartment bill will rise by four per cent.
IPART Chairman Paul Paterson said increased efficiencies and lower interest rates meant the draft prices would save customers compared to Hunter Water's proposed increases of six per cent for typical households and 11 per cent for those in apartments.
"While the draft prices are lower than what Hunter Water had proposed, we have largely accepted Hunter Water's expenditure proposals with the additional savings coming primarily from lower interest rates," Dr Paterson said.
"We have accepted the need to boost Hunter Water's capital expenditure allowance so it can continue meeting environmental and service standards, service population growth, maintain the condition of its assets, and fund enhancements to its customers' experience, such as the introduction of digital billing."
Under the draft determination, Hunter Water will invest $663 million on new and upgraded infrastructure, technology and services over the next four years to improve services and sustainably service forecast population growth.
"IPART has given the initial green light to a range of infrastructure projects that support the growth of our region through upgrades to the water and wastewater network, as well as continuing our focus on water conservation and reducing leakage," Hunter Water's executive manager customer strategy and retail Victor Prasad said on Tuesday.
"IPART also supported our proposal to spend $6 million on new recycled water infrastructure, and an additional $11.3 million on stormwater naturalisation works, helping to improve the liveability of our region."
IPART said the structure of the draft prices would give customers more control over their bills, while at the same time encouraging water conservation.
"There is an increase to the water usage price, from $2.37 to $2.41 per kilolitre, which allows for a lower annual fixed water service charge, falling from about $100 in 2019-20 to about $4 per year for households from 2020-21," Dr Paterson said.
For most non-residential customers, combined water, wastewater and stormwater bills would increase by up to three per cent per year on average, though in some cases they may fall slightly.
"We have also changed the way trade waste prices are set, to ensure customers are paying enough to treat the waste they produce," Dr Paterson said.
"This will mean some trade waste customers experience significant bill increases."
IPART has also made a draft decision to phase-out location-based discounts for large non-residential water users, to ensure equity amongst customers and promote water conservation in the region.
Dr Paterson encouraged all stakeholders in the Lower Hunter to make a submission to the review.
To help customers understand the impact of IPART's draft decisions on Hunter Water's prices, a bill calculator is also available on IPART's website.
Stakeholder feedback on the proposed prices for Hunter Water is due by 9 April 2020.
IPART will consider all comments made on its website and in submissions before making its final decisions on Hunter Water's prices in June.
The new prices will apply from 1 July.
IPART's Draft Report, and opportunities for stakeholders to have their say are available on IPART's website at www.ipart.nsw.gov.au