Water Corporation to review billing method

19/2/99
Water Resources Minister Dr Kim Hames said the Water Corporation would review its billing method after many customers received high summer accounts.
Dr Hames said some country customers had been particularly affected because high summer consumption had pushed them into significantly more expensive price tiers under the new billing method, known as average daily usage (ADU).
Water Corporation Board chairman Peter Jones said the corporation regretted the unforseen outcome of the new system and was moving swiftly to address customers' concerns.
"The ADU system wasdesigned to be revenue neutral and modelling was carried out by the corporation to that effect," Mr Jones said.
"Unfortunately this did not reveal problems which are now becoming evident.
"Some customers, especially those in country areas, are receiving accounts which are unexpectedly high. This is despite the amount of water available at the cheapest rate being increased from 150 to 165 kilolitres a year to ensure the system was revenue neutral."
The new billing method, which was introduced early in 1998, was designed to overcome inequities in the previous system. These included retrospective price increases and higher charges faced by people buying or renting properties in the second half of the consumption year.
The two systems differ in that previously customers began their consumption year with cheaper water and went up to higher price brackets as they used up their allowances. Under the ADU system, the allowances are calculated daily which means high usage customers go into higher price tiers each day.
Dr Hames said steps being taken to rectify problems in the ADU system included:

• engaging national economics consulting group Marsden Jacob Associates to carry out a full review of the new regime. The review will be completed by the end of March;
• ensuring customers, who have been unfairly affected, receive credits to their accounts at the end of their current consumption year; and -
• setting up a toll-free hotline for consumers who are having trouble paying accounts.

"I want to ensure the new pricing method is appropriate and fair and to identify whether changes are needed to protect customer interests and Marsden Jacob Associates are specialists in water pricing," Dr Hames said.
"I would particularly urge pensioners who are having trouble paying their bills to contact the hotline.
Mr Jones said customers who were high water users paid more as an incentive to conserve water.
"The new method supported the corporation's water conservation initiatives as it has a greater impact on high water users," he said.
Mr Jones said customers having difficulty paying high accounts should contact the hotline on 1800 682 878.
"The Water Corporation will spread their repayments over the customers' consumption year with no penalties," he said.
Media contacts: Caroline Lacy on 9424 7450
Water Corporation: Phil Kneebone 9420 2420