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Recycled water pricing report a step in the right direction but further reform needed


Total Environment Centre (TEC) has welcomed recommendations on recycled water pricing by the Independent Pricing and Regulatory Tribunal (IPART) as an important step toward promoting water recycling but cautioned that more reform is needed to increase use of recycled water by industry.

TEC Urban Campaigner Mr Leigh Martin said “Releasing pricing principles for recycled water is a vital first step in getting large scale recycling off the ground. It is essential that these pricing structures provide strong incentives to set up new recycling schemes and the costs and benefits are shared fairly across the community”.

The Tribunal has released pricing principles to be used in schemes where use of recycled water is mandatory, such as the Rouse Hill scheme and those to be established in Sydney’s growth centres. An important part of these principles is the recognition that the cost of developing recycling must be spread across the entire Sydney Water customer base through potable water charges.

“It is important to recognise that all customers will benefit from the development of recycling schemes by avoiding the $2 billion cost and environmental damage of a desalination plant, not just those who use recycled water directly. It is appropriate that the costs of developing recycling be shared across all customers to ensure the viability of new recycling schemes”, Mr Martin said.

The Tribunal has not recommended pricing principles for voluntary schemes, such as industrial reuse, on the basis that large industrial customers have the power to negotiate directly with water agencies. This ignores, however the need for strong incentives to encourage industry to switch to recycled water.

“Just as all customers benefit from residential recycling schemes, everyone benefit by substituting precious drinking water with recycled water in industry. Companies will not switch to recycled water, however, unless recycled water carries a sufficient discount. The cost of developing industrial reuse should be spread across the customer base to ensure the viability of industrial reuse schemes”, Mr Martin said.