Why has the ReWater Quarterly Supply Charge Increased?
Lightsview ReWater is regulated by ESCOSA and is required to comply with the National Water Initiative Pricing Principles (NWIPP). The NWIPP require Lightsview ReWater to recover sufficient revenue to ensure it can cover its operating and maintenance costs relating to supplying and maintaining ReWater. This includes the purchase of the raw untreated water, treatment of that water and distribution of the water to Lightsview residents. In addition, it must cover the cost to maintain all plant and equipment and make allowance for future repair and replacement of that plant and equipment. The regulatory view is that if a water utility does not recover sufficient revenue to cover the operating and maintenance costs, there is a risk that the supply of ReWater could be at risk in the long term.
Lightsview ReWater reports its costs and revenues to ESCOSA each year and need to show that there is sufficient revenue to cover the costs of supplying ReWater. This reporting process also allows ESCOSA to ensure that Lightsview ReWater is not collecting excessive revenue. There has not been any substantial overall change in the cost of supplying ReWater, however, Lightsview ReWater has been incurring an annual operating loss in recent years. This is unsustainable for the future security of the ReWater supply. To address this imbalance, the quarterly supply charge has been increased to achieve a smaller annual operating loss in future years, the pricing change does not attempt to recoup past losses only to minimise the losses that will be incurred in future years.
Why has the ReWater Usage Charge Decreased?
The NWIPP and ESCOSA requirements mean revenue for Lightsview ReWater should be determined in aggregate. Lightsview ReWater has determined the overall level of revenue required to cover all costs of operating the business in aggregate and then only allocated the costs relating to incremental water supply including raw water purchase, treatment costs and distribution costs to the usage charge. This leaves all fixed costs of operations and maintenance to be included in the quarterly supply charge. As a result, although the quarterly supply charge has increased, we have been able to reduce the usage cost to partially offset the impact.
Will there be further significant price increases in the future?
The price changes from July 2020 were necessary to fix historical imbalances between the costs and revenues applicable to Lightsview ReWater. Now that the revenue has been aligned with the costs, we do not expect that any above CPI price changes would apply in the next couple of years.
Why was the price change not advised before the changes took effect?
Previously, Lightsview ReWater has advised of pricing changes with the June quarter invoices which are issued in July. To ensure customers are given appropriate notice of any price changes Lightsview ReWater will endeavor to notify customers prior to any price changes taking effect. We will also ensure all pricing information and updates are readily available on our website. Please ensure to keep your email address details current with our customer service team so we can provide you with timely communication on prices.
Why was this price change needed now especially given COVID-19?
We understand that it is not a good time for price increases in the current economic circumstances, however, due to the economic circumstances it is important to ensure that Lightsview ReWater is financially strong for the ongoing benefit of our customers and employees. This means we are unable to continue incurring the ongoing annual losses incurred in operating Lightsview ReWater and it is vital we rebalance our revenue and cost. Should any customer have any financial hardship, please contact our customer service team on (08) 7999 8555 and we will try to accommodate payment arrangements to support the situation.