Its a precarious time in the water sector in NSW.
IPART – Independent Pricing and Regulatory Tribunal released their draft report for WaterNSW‘s bulk water prices across Greater Sydney, where they have set draft price increases of 10.4% per annum. Under this draft decision, WaterNSW’s share of the typical Sydney Water retail bill would go from $94 (2024-25) to $128 (2027-28).
IPART’s Draft Decision proposes to cut revenue by almost 16% compared to its Sep 2024 submission, and 8% compared to WaterNSW’s updated June 2025 submission. From their initial submission to the draft, this equates to around $50million per annum.
This places a large constraint on the planning and operations of WaterNSW, and the delivery of bulk water services across Greater Sydney. With less funding, they need to resolve whether to cut expenditure or fund their work through alternative means.
Some of the repercussions were recently highlighted in the news (https://lnkd.in/gDYzTFsm).
We are currently facing a challenging operating environment for utilities. Macroeconomic conditions have not been favourable, investment in climate resilience is increasing substantially, Governments are setting ambitious housing policies that require utility support and network assets are reaching end of life.
This places significant pressure on prices to respond and on regulators to limit cost of living impacts. We have observed these trends across multiple jurisdictions (a proposed 40% increase in TasWater‘s draft prices, a proposed 50% increase in Sydney Water‘s draft prices , and intervention from the SA Government to bring SA Water‘s prices from 32.5% above CPI to 3.5%).
So how do we solve this complex problem? Is it the role of the regulator to deliver affordable services, or simply to ensure planning and operational decisions are prudent and efficient? If prices are kept too low, are we simply kicking the can down the road?
There is an important discussion to be had about the roles and responsibilities for maintaining affordability. While this sits with the utility, it is also incumbent on Governments to play their role in supporting affordable services.
The ramifications of regulatory pricing decisions extend beyond merely accepting or rejecting expenditure proposals. They impact people’s employment and the various communities and stakeholders receiving the services.
This demonstrates the importance of getting a price submission right. Ensuring it finds the right balance between price, service and customer experience, which is vital to delivering customer value when prices are going up. Further, including adequate evidence to justify the proposals, that allows a regulator to accept those proposals.
Utilities Advisory Mark Fitzgibbon Melissa Thek Sarah Thomson CA,GAICD Jason Lim Robert Tiong Kevin Nguyen Ron Ben-David John Hamill, GAICD
