The Independent Pricing and Regulatory Tribunal (IPART) is reviewing the Sydney Desalination Plant pricing proposal for 2017- 2022. The desalination plant was built during the last major drought to provide a secure source of water in the event that Sydney’s dams fall below 70% capacity. The plant is currently operating in ‘water security mode’, which means that it is maintained in readiness for use. While this is the case, Sydney Water pays a lower rate to the operators than it would if the plant were operating. This charge is passed on to customers. The costs of operating the desalination plant in water security mode make up approximately 9% of a typical residential bill.
The Sydney Desalination Plant has identified total savings of 20.9% (excluding inflation) in water security mode, and 16.7% in operation.
In its submission to IPART, Sydney Water argued that in addition to these savings, the operators of the desalination plant should be continuously seeking to identify cost reductions that can be passed on to consumers.
Third party customers may order water from the desal plant outside drought conditions. IPART has proposed removing the the current status whereby Sydney Water does not pay for any water produced during non-drought conditions. Sydney Water considers that this proposal could be costly for customers as they could be paying for water that isn’t needed.
PIAC supports Sydney Water’s submission on this pricing proposal and will continue to work with Sydney Water to ensure that residential customers receive value for money, water security and add to the livability of Sydney.