Water pricing choices to flow

Wednesday, 22 September 2010

Peter Ker, The Age

Water retailers are preparing a shake-up in the way Melburnians pay for water, with customers to be offered options such as ''environmentally friendly'' or ''unrestricted'' supply plans.

The pricing options are being developed before the city's next water pricing period, and are designed to increase flexibility for customers in an era when prices will soar to pay for large water projects like desalination.

While prices vary across Melbourne's three retailers, all of them use the same ''block tariff'' price structure, where the cost of water rises when the customer's consumption exceeds certain volumes.

Retailers want to sell options to suit different customers, similar to the way customers can choose different electricity or mobile phone plans.

Melbourne's biggest retailer, Yarra Valley Water, has already started work on a range of water options for households and businesses, including:

• A ''high security'' water tariff, where customers pay a higher price for an unrestricted supply.
• A ''scarcity'' tariff, where customers pay a cheaper price on the grounds they will consume frugally and face supply restrictions sooner than customers on more expensive plans.
• An ''environment'' tariff, where customers would pay extra to ensure their water is delivered using environmentally friendly methods such as green power, or to ensure extra flows are returned to stressed rivers.
• A ''community'' tariff, where customers would pay extra to ensure that groups such as sporting clubs had access to water through rain tanks and other means.

The options would require approval by the Essential Services Commission, with Yarra Valley Water's manager of regulation, Brett Mathieson, saying the retailer is keen to see reform in the water pricing sector.

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