Inquiry into water charges

THE Economic Regulation Authority has launched an inquiry into the Water Corporation’s developer charges, with the independent regulator to advise the government on appropriate water pricing changes to take effect from July 2008. The terms of reference address the principles underpinning the entire suite of developer charges, the cost of recovery for minor works and the efficiency of the funding arrangement for headworks contributions. The inquiry will compare the mechanisms for developer charges with water regulators in other states, as well as other Western Australian utilities. Property developers are charged for connecting their developments to the network, as well as water, wastewater and drainage works needed to service the development in the future through headworks charges. The standard headworks charge is currently $3,000 per lot, but can vary in certain zones. Any rise in the charges would almost certainly be priced into lot values. This year, the Water Corporation collected $264 million in developer charges, up 27 per cent from the year before. An issues paper due for publication will be followed by a public consultation period before a draft report is released in March 2008. The final report will be delivered to government by June 30 2008. The report comes after an inquiry into water pricing found the source costs had to be built into tariffs for household and business consumers. An inquiry will be held into general tariffs later this year.

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