2016/17 Water and Wastewater Price Benchmarking for Large Queensland Local Government Utilities

March 22, 2017

AEC has again undertaken water supply and wastewater price benchmarking for large Queensland local government utilities, consisting of 10 South-East Queensland (SEQ) Water Grid service areas and 10 non-SEQ service areas. 

 

Water Pricing

The Queensland industry median water charge for residential customers serviced by large local government utilities in 2016/17 was calculated as: $860.46 for a household consuming 200kL per annum (an increase of 4.8% on the prior year median); and $1,499.96 for a household consuming 400kL per annum (an increase of 5.4% on the prior year median).

 

The SEQ median charge increased by 1.9% at 200kL consumption and by 2.5% at 400kL consumption, while the non-SEQ median charge increased by 0.8% at 200kL consumption and by 3.4% at 400kL consumption.

 

The following graph shows that the SEQ median charge at 200kL consumption has historically increased at a greater rate than the non-SEQ median charge, to the extent that the gap between the two is now $303, up from just $74 in 2007/08. This gap is not expected to widen much further in the future as most SEQ Councils have arrived at the destination price for bulk water.

 

Looking forward:

• Water price increases should continue to moderate in SEQ.

• Water price increases outside of SEQ should increase at a greater rate than in SEQ as a result of some bulk water price increases being proposed for selected service areas.

 

Median Residential Water Bill over Time for a Property Consuming 200kL, 2007/08-2016/17

Source: AEC

 

 

Wastewater Pricing

The Queensland industry median wastewater charge for residential customers serviced by large local government utilities in 2016/17 was calculated as $651.05, an increase of 3.4% on the prior year median of $629.67. The SEQ median charge increased by 1.4%, while the non-SEQ median charge increased by 4.4%.

 

The following graph shows that annual increases in charges outside of SEQ have generally been greater than those in SEQ, resulting in the non-SEQ median overtaking the SEQ median in 2014/15 and being presently $48 higher than the SEQ median.

 

Looking forward, wastewater price increases are anticipated to continue to be relatively higher in non-SEQ regions, with costs spread over a smaller customer base and enhanced cost recovery levels being achieved.

 

Median Residential Wastewater Bill over Time, 2007/08-2016/17

Source: AEC

 

AEC Group Pty Ltd (AEC) is an industry leader in the water and wastewater sector, having provided advice to a large number of service providers regarding their financial and pricing strategies over the past two decades. If you require assistance regarding cost recovery and/or charging structures, please don’t hesitate to contact Gavin O’Donovan, Director - Finance, on (07) 3831 0577 or via gavin.odonovan@aecgroupltd.com.

 

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