2008-2013 Water Plan

Central Highlands Water is today submitting its 2008-2013 Water Plan to the Essential Services Commission (ESC), containing a record investment program of $368 million in the 5-year period in order to secure the region’s water supplies and wastewater services. The ESC is the independent economic regulator of the water industry who will evaluate the Water Plan and decide on the price increases proposed in the Plan.

The Water Plan follows on from the initial release of the Exposure Draft Water Plan on 1 August which detailed $140 million of direct capital investment, with $41 million committed to new projects across the Central Highlands region designed to help communities cope with the crippling drought. A further $228 million will be spent on operating and maintaining new and existing infrastructure.

Managing Director Mr Neil Brennan said that each customer was provided with a summary document and reply paid feedback form in which to provide feedback directly to Central Highlands Water. Mr Brennan said that the community took advantage of the opportunity to provide feedback and 3,700 forms were returned to Central Highlands Water from across the 15 water supply systems, representing the views of approximately 7% of customers.

“This high level of feedback indicates strong support for our future plans for water and wastewater services,” said Mr Brennan.

“The survey also gave customers the opportunity to provide feedback on the two pricing scenarios we placed before the community, said Mr Brennan.

Mr Brennan said that the majority of customers (63%) preferred Central Highlands Water’s pricing model Option B, with 22% preferring Option A. A significant proportion of customers (15%) did not select either option with customers stating that they had no preference for either option.

Option A was the ESC’s regulatory ‘building block’ pricing model indicates real price increases averaging 11.4% for each of the five years, resulting in an overall average real price increase of 71% after the five-year period. Option B was developed by Central Highlands Water and results in a lower cost impact to customers after the 5-year period with a 55% average real price increase. This pricing option has an average increase of 25% in the first year, followed by four years of 5.5% average price increases.

Mr Brennan said that Central Highlands Water was also working on strengthening its customer support programs consistent with community feedback.

A major component of the Water Plan is the Ballarat Link of the Goldfields Superpipe project. The State Government had put this project forward to the national Water Commission (NWC) as a priority project for the state of Victoria and requested capital funding of $90 million from the Federal Government through the NWC. In August 2007 the Federal Government announced that it had offered to contribute $31 million to Central Highlands Water in the form of a revenue subsidy. The impact of the subsidy as opposed to the capital funding of $90 million which had been sought will be to offset the impact of the Goldfields Superpipe on price rises for Central Highlands Water customers over the 2008-2013 regulatory period. The subsidy will lessen the impact of price rises by approximately 1.0% per annum over the five year period.

However, Mr Brennan said that the State Government are unable to formally accept the offer until the funding deed from the Federal Government was received so that complete funding arrangements were understood.

The 2008-2013 Water Plan will be available from the ESC website at www.esc.vic.gov.au or the Central Highlands Water website at www.chw.net.au during the week or by calling Central Highlands Water on 5320 3111. The ESC will provide further opportunities for customers to provide comment on the Water Plan. A final decision from the ESC is expected May next year and the 2008-2013 Water Plan will come into effect from 1 July 2008.