Icon Water prices set to increase next year

Businesses can expect an increase of more than $430 in the same period, depending on water consumption and toilet use.

The ACT's economic regulator on Friday released its draft decision and proposed price direction for water and sewerage services for 2023 to 2028.

Household bills will likely increase between 3.33 and 5.37 per cent in 2023-24, depending on usage, compared with the 4.2 per cent increase next year.

The Independent Competition and Regulatory Commission has warned customer bills between 2024-25 and 2027-28 could be higher if inflation rises above 3 per cent per year.

Commissioner Joe Dimasi said an average residential customer would be expected to pay $1227 for their annual combined bill in 2023-24.

"Despite this proposed increase, the combined water and sewerage services bills payable by residential consumers in the ACT will remain lower than the average of comparable jurisdictions." Mr Dimasi said.

The proposed increase in water and sewerage prices reflect the effect of large future investment in sewerage treatment, increase in company costs including wages, as well as cost of debt and inflation, the commission said.

"These factors have been partially offset by the growth in Canberra's population and the ability to spread these increased costs across a broader customer base," a statement said.

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Icon Water's proposed water supply change from $220 to $211 was rejected by the regulator, which set the maximum price at $206.30.

A proposed sewerage supply change from $502 to $547 was also rejected, for a maximum price increase to $530 a year.

Icon Water's proposed pass-through provision for costs arising from the ACT government's Better Building reforms was also rejected.

The commissioner's draft decision has been to approve a net expenditure of $685.5 million for Icon Water for the period July 1 to June 30, representing a reduction of more than $50 million proposed by Icon.

Icon is an unlisted public company owned by the ACT government. It reported an annual net profit of $76 million in the last financial year.

The company manages the region's dams, water treatment plants, sewage treatment plants, reservoirs, water and wastewater pumping stations, pipes and infrastructure, with an asset base valued at around $3.2 billion.

A significant proportion of that infrastructure was built in the 1960s and upgrades to major assets are forecast for the years ahead.

Work includes upgrades to augment the Belconnen trunk sewer at a cost of $33 million and a renewal of electrical supply infrastructure at the Lower Molonglo Water Quality Control Centre.

An Icon Water spokesperson said the company had carefully planned investments for the next five years to ensure it continued to meet customers' expectations for service quality, while keeping bill impacts to a minimum over the longer term.

"We have also been very conscious to maintain our focus on planning for long-term water security, the impacts of a changing climate and the growth of the city," they said.

"Our price proposal reflects the investment needed to maintain the standards of reliability and service that are valued by the ACT community.

"Once we have reviewed and considered the ICRC's views we will be in a position to submit a final proposal in mid-December 2022."

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