Price hike could be offset with smaller pipes, water utility says

TasWater suggests customers reduce pipe size to offset price hike, inquiry hears In short: Tasmanian businesses have slammed a TasWater suggestion to reduce pipe sizes to lower fixed water bills. TasWater says charges are calculated by the size of a property's water meter connection. What's next? Users say replacing meter connections could be costly. Tasmanian businesses have slammed a recommendation by the state's water utility encouraging customers affected by bill increases to reduce the size of their pipes. As of July, water bills for Tasmanian households and small businesses will rise by an average of 5.7 per cent each year for the next four years. Businesses and sports clubs said they have been hard hit by the changes, with some citing an increase of as much as 500 per cent to their fixed water bill. In a parliamentary inquiry into the financial and operational performance of TasWater on Thursday, representatives suggested one option to help reduce water bills for those affected would be to reduce meter connections to 20 millimetres in size. One local business said replacing pipes could cost as much as $100,000, with no guarantee that they could be reduced to 20 millimetres. TasWater has previously said that while the upfront cost would be several thousand dollars, the returns would be greater. Water bill increases surpass 500 per cent Co-director of Rocherlea steel fabricating business HP Engineering Stuart Boyd said the business's monthly water bill in June was $625, equivalent to $7,500 per year. After the changes, this increased by more than 500 per cent to $3,800 a month, or more than $45,000 a year. Mr Boyd said reducing the company's inward water pipes, which are 150 millimetres in size, could cost as much as $100,000. "We'd have to get engineers and more consultants to design and do a study," he said. "There'd be business disruptions to dig up from the road in and change pipe sizes. You're talking labour, materials, the cost of your building surveyor, there'd be design work involved." TasWater said it recognised the scale of the increase for some non-residential customers and was actively consulting with the economic regulator on other ways it could minimise impacts. TasWater Customer and Community General Manager Callan Paske explained the increased pricing, saying that "a larger water meter connection lets a property draw more water at any time than a standard home". "Our pipes, pumps, treatment plants and storages have to be built and maintained to meet that potential demand, whether it's used on a given day or not. "Fixed charges recover the cost of holding that capacity available." Customer impact assessed case-by-case Last year, TasWater applied to the state's economic regulator for an average price increase of 11.5 per cent per year to fixed sewerage and water fees, but the application was knocked back earlier this year. TasWater has previously said its price increases were to fund necessary upgrades to aging water and sewerage infrastructure. Mr Paske said potential costs and savings varied depending on the property and the work involved in reducing the pipe sizes. "We'd encourage businesses to talk to us rather than assume a figure," he said. Mr Paske said affected customers would be assessed on a case-by-case basis. "It would need to be determined that a smaller connection can meet the property's ongoing water needs and applicable requirements. This involves a development application to TasWater and supporting information prepared by a suitably qualified surveyor or engineer," he said. Mr Boyd said his fabrication business would need to increase its prices to cover the additional costs. "All of a sudden I've got to find money of that amount to continue doing what we were doing anyway. It's money that's just not there,"he said. "We don't survive or operate in a way that we have contracts in place. We've got to compete, we've got to tender and we have to win work. So that would jeopardise, make it harder for us to win work," he said. Pipe reduction may be unfeasible Haylee Sheehan's furniture transport business in Youngtown, on the outskirts of Launceston, was also hit by a significant bill increase. Between June and July, Ms Sheehan said her fixed water bill had increased by 172 per cent. She said $9.60 of that bill was for water and sewage usage. The rest was for fixed charges. Ms Sheehan said the business could consider reducing the size of its pipes, which are currently 100 millimetres, but was unsure whether the smaller pipes would meet their needs. "I really think it's up to TasWater to come to the party and try to help us work out whether we can reduce the size of our pipe," she said. "Maybe somebody should have actually come out and seen us and said, 'Right, if we don't do something about this, your bill is going to absolutely skyrocket. Let's get a plan in place'." Fire hydrants on the property also complicated things. "[Surveyors] might turn around and say, 'Actually no, because you've got firefighting equipment here … we can't actually reduce the size of your pipes'," she said. Smaller pipes, weaker water pressure Trevallyn Parks and Improvement Association president Collin Burns said the Launceston park relied on two 50-millimetre pipes and a 25-millimetre pipe. "We put in an automatic watering system, which uses a 50-millimetre pipe for the water pressure," he said. He said the watering system consisted of 10 pop-up sprinklers that relied on strong water pressure to work. If the pipes were smaller, it would be detrimental. "[The sprinklers] wouldn't come out of the ground sufficiently to operate, and even if they did come out, you wouldn't get the coverage of the water. It would be like turning a tap on halfway," he said. He said the impact to the club would be significant if TasWater's price increases were not reviewed. "It'll be a matter of fundraising or cancelling programs," he said.