New South Wales Government-owned electricity company Essential Energy has said if its subsidiary, Essential Water, cannot get the fee increases it needs to carry out water projects and services in Broken Hill the rest of the state's electricity bills will increase.
The revelation came after a community consultation meeting on Tuesday that discussed Essential Water's proposed $93 price rise, per customer per year, to water and sewerage bills.
The monopoly water provider argued that the money was needed to cover $65.7 million worth of planned infrastructure projects to improve water facilities and services.
However, it is the Independent Pricing and Regulatory Tribunal (IPART) that sets the price.
Customers offered assurance
IPART chairman, Peter Boxall, assured concerned residents that the final price determination would balance "the cost of efficiently delivering services with what consumers can afford to pay".
Essential Energy's customer and network services general manager, Luke Jenner, said any discrepancy between the price Essential Water had asked for and the price IPART determined was affordable would need to be accounted for elsewhere.
"Any shortfall in funding, if we can't close that gap by doing fewer projects, ultimately that gap would be covered or subsidised by the electricity customers of NSW," Mr Jenner said.
"All our revenue comes from our electricity customers, so any shortfall that we aren't able to recover from our water customers effectively would go to electricity customers all over NSW.
Broken Hill treatment plant upgrade
A significant chunk of the $65.7 million proposal is the replacement of the Wills Street Waste Water Treatment Plant in Broken Hill, which is costed at $34.5 million.
"That plant was build in 1939 and is past its lifetime," John Coffey said, Essential Water's manager of water operations in Broken Hill.
"Another significant concern is that sulphur from the sewerage is eroding the cement, and the Environmental Protection Authority is concerned that effluent may seep into groundwater," Mr Coffey said.
Essential Water alternatively floated the idea of a $20 million renovation to the Wills Street sewerage plant, but said it would add only 15 years to its life expectancy versus a 50-year life span for a new plant.
Other components of Essential Water's capital expenditure plan include $10 million to replace service reservoirs and tanks in the area, $6 million for water treatment plants including a replacement of the Menindee Sewerage Plant build in 1985, and $6 million to replace water and sewerage mains around Broken Hill.
The price rise proposal does not include the maintenance or operational costs associated with the Wentworth to Broken Hill pipeline, which the State Government has pledged to absorb until 2023.
IPART will release a draft price proposal in April 2019 before the final price is determined in May, to be effective as of July 1.
