How water prices are set in Victoria (November 2017)

Victoria has 18 government-owned water companies that sell water to business and residential customers. Each water business is the exclusive provider in its own geographical area. In other words, water corporations are monopolies, and they don’t need to compete for customers.

Water prices are regulated

Because of this, Victorian water prices are regulated – that is, water companies aren’t allowed to charge whatever they want. Instead, their prices are assessed and approved by the regulator, the Essential Services Commission.

The Essential Services Commission approves prices every five years

Every five years, each water company prepares a plan that describes what it wants to do in the coming five years and the amount of money it thinks it will need to do this – called the revenue requirement. Based on the revenue requirement, the company also sets out the prices it plans to charge its customers. Water companies have to engage with their customers when they are putting together their five-year plan to make sure it reflects what customers want.

The Commission goes through these plans in detail and decides whether the company’s proposal is efficient – allowing enough for the company to provide its services while being good value for customers. The Commission also considers the interests of customers, including customers on low incomes, and how easy it is for customers to understand the company’s prices. After doing this assessment, the Commission approves the maximum price that the water company can charge.

Once the Commission has approved the water company’s overall price plan, the company has to update the Commission annually on the prices it intends to charge that year. The Commission makes sure that these prices fit with what was approved. You can check your company’s current price by looking at the tariff schedules on the Commission’s website.

EWOV can’t investigate water prices

EWOV can’t investigate water prices themselves – pricing is outside of our jurisdiction. However, we can check that your bill is correct based on your water company’s prices and the amount of water you’ve used. We can also help if you have a bill that seems unusually high or if you’re having trouble paying water bills and haven’t been able to resolve the issue with your company.

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