Deception on $400 Desal Cost

Mr  WELLS ( Rowville ) — (Question 7034) The constituency question I wish to raise is for the attention of Minister for Environment, Climate Change and Water. A number of constituents in Rowville have raised concerns with me in relation to what they see as a blatant misrepresentation of the facts when it comes to the true household cost of desalinated water recently ordered by the government and the minister.

Each of Melbourne Water’s 1.7 million customers have to pay an additional $386 each per annum on average just for the plant’s standing costs, without the purchase of even one drop of water. I therefore ask the minister on behalf concerned residents of my Rowville electorate: why has she not been open and transparent with the Victorian community with regard to the true cost of desalinated water to be delivered next summer from the Wonthaggi desalination plant, and will she now confirm that the average cost of desalinated water per Melbourne Water customer will be nearly $400 next year and not the $12 she has previously stated?

The Victorian desalination plant can produce up to 150 gigalitres of water annually – which represents more than one third of Melbourne’s use last year (415 gigalitres).

 Answer given: 13th April 2016

Melbourne Water’s bulk water charges already include costs of the Victorian Desalination Plant for an annual security payment to AquaSure. These provide for the VDP’s construction and availability in a state of readiness to provide water when it is needed. These payments amount to $607 million in 2016/17 and is already built into existing water prices to customers. The cost of a 50 gigalitre water order for 2016/17 is an extra $27.9 million for the year. This cost will be recovered from the customers of the Melbourne water retailers through increases on water bills. For a 50 gigalitre order this equates to an extra annual cost of about $12 a year on a typical residential customer’s bill.

Hon Lisa Neville MP
Minister for Environment, Climate Change and Water