Opinion

Nearing the end of a long pricing journey

By Geoff Adams

Charmaine Quick, Goulburn-Murray Water managing director

Goulburn-Murray Water is just days away from lodging our next Pricing Submission — a project that has involved input from thousands of our customers through working groups, drop-in days, surveys and forums.

Our customers have a vested interest in our submission, which will determine the fees we charge them over the next four years.

The Pricing Submission is now in its final stage of customer feedback before our proposals are lodged with the independent umpire — the Essential Services Commission — which will determine our pricing for 2020 to 2024.

Many of our customers have devoted immense time and effort to ensure our complex pricing structure is relevant to their own and the needs of their neighbours, contemporary to our region’s challenges and, above all, a fairer deal for all.

We believe this has been achieved and we quite literally could not have done it without the insight, experience and input of our customers.

On behalf of G-MW, I thank you.

As complex as our pricing is, the submission has four key elements — the 'big four’ of our Pricing Submission:

Price reductions

Customers told us to reduce our costs and we are transforming G-MW to do so.

The bottom line is we expect to require $443 million in revenue over the next four years to deliver our services and maintain our multi-billion dollar asset base. This is down from the $505 million we required over the last four years and these savings are bringing down bills for the majority of our customers.

We suggest few other utilities and service providers will be passing on savings in the order of 12 per cent in coming years.

Uniform pricing

With prices being reduced across the Goulburn Murray Irrigation District and customers wanting the same price for the same service, we are proposing to move to uniform delivery charges.

This creates a simpler, more stable pricing structure, unifying the GMID and reducing the risk of price shocks.

Delivering uniform Infrastructure Access Fees and User Fees has been made possible by cutting our operating costs by $20 million — particularly in Shepparton, where their once higher costs have been reduced to a level now immaterial to other districts. It means Infrastructure Access Fees will drop by about $400 per delivery share.

System pricing

In line with customer feedback for 'one service, one price', we propose applying a system price to all customers.

This is a weighted average of the cost of storage services for all basin customers served by the Goulburn and Murray systems. It’s a simpler cost structure and results in lower prices for water users.

Entitlement Storage Fees

We propose removing the price disparity between water users (water associated with land) and non-water users. Again, this meets customer expectations of 'one service, one price’ for storage fees.

G-MW has included these proposals and more in an easy-to-read summary of our Pricing Submission: A Fairer Deal For All. It is available on our website or by phoning 1800 013 357. Feedback on our submission ends on Monday morning, November 4.

We will incorporate this final feedback and lodge our submission for ESC review in November.

Customers will be able to comment to the ESC during its own review process with the final determination of prices made in June 2020 and implemented from July 1.

The journey to our Price Submission has been long, involved and we’ve listened every step of the way. Again, I thank customers for their important input.