“As a new property owner in town I was horrified at the financial disparity to say the least,” said Gloucester’s Ian Parks.

“I wonder if residents are aware that Midcoast Water charges so much more for the essential service of providing water, than their neighbours at Hunter Water?”

Well, if they weren’t aware before, they are now. 

As a corporation, Hunter Water prices for water and sewer are directed by the Independent Pricing and Regulatory Tribunal. Despite a three year $300 million infrastructure program, at $2.22 per kL and a $649.70 annual base rate for homes, Hunter prices are claimed to be amongst the lowest in the country. 

Swing up to its northern neighbour MidCoast Water, the picture is a little different. It charges $2.92 per kL with an annual base rate of $1184 for a residential home. Unlike Hunter Water, MidCoast Water’s prices are not regulated by an independent body due to the fact that its structure resembles that of local government rather than a corporation. Its rates however are not pegged but are benchmarked against other water utilities, where it reportedly performs well. 

It is MidCoast Water’s board which is ultimately responsible for pricing following the NSW Government's Best-Practice Management of Water Supply and Sewerage Guidelines and like any council, it says changes go on public exhibition and submissions are welcomed. 

Since it took over as the local water provider from Gloucester Shire Council in 2011, prices for water and sewer have increased by approximately four per cent every year. The current board is, according to current chairman and Gloucester councillor Aled Hoggett, “very conscious” of the price of the services it provides.

“This board has had a very strong focus on reducing operational costs with the direct aim of reducing in increases in rates. We are actually holding sewer rates at their current rate... so on a year by year basis there’s a decrease. The water fund is substantially more stressed than the sewer fund and so the increases in price for water will continue. What we are trying to do is reach the balance and trying to hold them at the CPI which is nominally at three per cent,” Cr Hoggett said.

He added that although MidCoast Water’s sewer prices were relatively high compared to elsewhere, the water price was average, but any comparisons with Hunter Water were very difficult. 

MidCoast Water’s acting general manager Brendan Guiney agreed. 

“Hunter Water serves a population of 485,000 people. MidCoast Water serves a population of 82,500 in 16 different towns and villages. We have a low population density and yet we must still guarantee safe drinking water quality and collect and treat sewage to return the effluent safely back into the environment,” he wrote in a letter to Mr Parks, adding that they had applied for state funding grants to help assist with major costs.

Mr Guiney said that Gloucester’s water treatment plant was in dire need of a $20 million upgrade over the next five years to bring it up to an acceptable standard. Also included in the utility’s 30 year financial plan is the $32 million Nabiac borefield and water treatment plant project, $3.9 million duplication of the Harrington water main, $3 million storage facility at Pacific Palms, and over the next 12 months $2.8 million on general water and sewer system renewals.

“We run a bunch of water supply schemes and trying to run all of them equitably is not an easy thing to do. There are a whole range of complexities we are trying to balance,” Cr Hoggett said.

Cr Hoggett said that one of those complexities was managing the large $250 million debt from previous years.

“We all felt very uncomfortable with the level of debt we’d inherited and felt it was something we had to do. The annual rises have been lower than under previous boards, and during the same period we’ve been through a program of fairly drastic debt reduction, from $250 million down to $195 million in three years.”

Prices are accordingly set to cover costs and depreciation, and MidCoast Water said if costs could be reduced theoretically prices could be also, however that is not projected over the short or medium terms.

Meanwhile Ian Parks, living off tank water on his Wards River property, is struggling to accept that he needs to pay $1185 per year for water in Gloucester before he has even turned the tap on. 

“Do they think we are more affluent than Hunter residents?” he asked.

Both the members for the Upper Hunter Michael Johnsen and the Myall Lakes Stephen Bromhead were approached for comments but neither responded.

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Calls to review pension rebate scheme 

Fortunately for new Gloucester home owner Ian Parks, he could be entitled to a pensioner’s annual discount of $175. Unfortunately however, that’s $100 less than if he lived in the Hunter. 

Mid Coast Water said that its pensioner rebate figures are set annually by the State Government and are currently capped but it recognised that this was a big issue.

“Our board has recognised there is an urgent need to increase the rebate provided, as the State Government hasn’t increased the level for some years. It has been raised at our board meetings several times and we have made approaches to both the State and Federal Governments this year on the matter. The matter has also been raised at both the state and national local government conferences to put pressure on the government to increase the rebate.”