The key draft outcomes for Melbourne Water include:
A revenue requirement of $9,991.9 million over the regulatory period. This is around 1.4% or $140.5 million lower than that proposed by Melbourne Water. This mainly reflects adjustments to made by the Commission to controllable operating expenditure and forecast capital expenditure.
A forecast operating expenditure of $5,411.0 million over the regulatory period. This is around 1.8% or $100.9 million lower than proposed by Melbourne Water. This is driven by the removing a number of spends above its 2024-25 benchmark established in its previous review that were not adequately justified, and by removing a number of proposed cost increases above the baseline allowance.
Acceptance of Melbourne Water’s actual capital expenditure over the current regulatory period, and a forecast capital expenditure of $7,300.1 million (including capitalisation of Desalination Security Plant Payments) over the regulatory period. This is $555.9 million or 7.1%lower than proposed by Melbourne Water. This is driven by the removal of projects that did not have unacceptable risk if deferred but do have a high level of maturity and certainty, and a broader 10 per cent reduction to forecast water and sewerage capital expenditure reflecting concerns about deliverability.
Acceptance of Melbourne Water’s proposed tariff reform for its bulk water services, subject to ministerial approval, including the shift to recover a greater share of bulk water revenue through variable charges. However the commission has not accepted Melbourne Water’s proposed tariff reform to a common sewerage transfer variable charge on the basis it did not reflect underlying costs.
An overall ‘Standard ‘PREMO rating with the ratings for four of the five PREMO elements in agreement with Melbourne Water’s self-rating. Melbourne Water’s ‘P’ element of PREMO has been downgraded from a Standard to Basic rating on the basis that Melbourne Water had mostly met its outcomes however had overspent on its controllable operating expenditure and delays in delivering its capital program.
Melbourne Water is required to updates its prices to reflect the ESC’s draft decision, and is expected to progress on pricing principles for large and/or complex connections as part of its late addendum to its submission. Written comments or submissions in response to the draft decision are due by 1 May 2026. The release of the ESC final decision and price determination will occur in June 2026.
The key draft outcomes for North East Water include:
A revenue requirement of $490.7 million over the regulatory period. This is around 3.1% lower than that proposed by North East Water and mainly reflects adjustments to operating expenditure and regulatory depreciation forecast
ESC acceptance of North East Water’s proposed capex forecast of $279.7 million over the regulatory period
Forecast opex of $289.8 million over the regulatory period. This is around 5.6% lower than that proposed by North East Water and is mainly driven by removing a number of proposed cost increases above the baseline allowance.
Acceptance of North East Water’s proposed tariff structures including its rebalancing of fixed and variable charges
North East Water’s proposed uniform standard new customer contributions were not accepted by the ESC as it was not satisfied that North East Water had calculated the charges consistent with its guidance requirements
An overall Standard PREMO rating with the ratings for each of the five PREMO elements in agreement with North East Water’s self-rating
North East Water proposed that the typical annual water and sewerage bill would increase by around 5.5% (before inflation) per year for residential owner occupiers and 2.1% (before inflation) per year for a residential tenant. North East Water is required to updates its prices to reflect the ESC’s draft decision.
Written comments or submissions in response to the draft decision are due by 1 May 2026. The release of the ESC final decision and price determination will occur in June 2026.
Today the Essential Services Commission released their draft decisions for Melbourne Water and North East Water, setting prices for 2026-31.
The key draft outcomes for Melbourne Water include:
The key draft outcomes for North East Water include:
Written comments or submissions in response to the draft decision are due by 1 May 2026. The release of the ESC final decision and price determination will occur in June 2026.