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Sydney Water Corporation has proposed an increase of 15.1% above inflation for water prices over the next determination period from 1 July 2012, equivalent to a rise of $166 to the annual water bills of average Sydney Water households over four years. According to Sydney Water’s submission, one of the driving factors behind the proposed price increase is the need for the corporation to restore its financial viability after an extensive period of reduced revenue over the last two determination periods. Although PIAC appreciates that Sydney Water must ensure its financial viability to continue functioning as a profitable corporate entity and maintain efficient supply of water to Sydney Water customers, PIAC is concerned that this price rise is being passed through to customers while Sydney Water continues to bring in increasing profit.
PIAC believes that the Independent Pricing and Regulatory Tribunal of NSW must ensure only the efficient costs of providing Sydney Water’s services are passed through to consumers through a robust review process, and recommends that any price rise must be smoothed over a reasonable period to maximise consumer’s ability to absorb bill increases, and minimise the risk of consumers experiencing price shock.