WA's economic regulator has implored the Barnett Government to deliver commercial water customers a reprieve, saying average water bills for city businesses should be cut by almost 8 per cent from July.
The Economic Regulation Authority yesterday released its long-awaited report into the efficiency of WA's water tariffs, arguing big falls in the Water Corporation's funding costs should be passed on to consumers.
The authority said that if the recommendations in its report were implemented, a typical commercial water customer in the city would pay $614 a year, or 7.7 per cent, less in 2013-14.
Most of the fall would be attributed to a dramatic reduction in wastewater charges, with water consumption fees to rise slightly because of increasing costly desalinated water production.
Overall prices would need to increase just 1.6 per cent and 1.7 per cent in the following two years.
Country business customers with the Water Corporation would also enjoy a drop in bills - albeit a more modest decrease of 1.3 per cent, or $157 a year - before prices increased by 3.3 per cent in 2014-15 and 2015-16.
Central to the ERA's report is a push to slash the rate of return the Water Corporation can generate from its massive asset base.
The Water Corp had wanted a real pre-tax return of 5.28 to 6.62 per cent but the ERA said an "appropriate" level was 3.51 per cent.The ERA has removed developer contributions from the corporation's asset base, therefore reducing the State-owned group's revenue needs by more than $400 million over three years.