The Essential Services Commission has released its draft decision on how much Melbourne Water can charge its customers for water, sewerage, waterways and drainage services over the next five years, from 1 July 2026.
Melbourne Water is a wholesaler that provides water and sewerage services to metropolitan water retailers and water to some regional retailers. Those retailers then deliver water to homes and businesses. Melbourne Water also maintains waterways and drainage services which make up part of household bills for owner occupiers.
The draft decision allows Melbourne Water to invest $7.3 billion in vital sewerage and drainage infrastructure. This is a 7 per cent reduction in Melbourne Water's proposal, but a 51 per cent increase in infrastructure expenditure compared to the previous five-year period.
This enables Melbourne Water to continue delivering safe drinking water and sewerage services for the Victorian community, while maintaining vital infrastructure.
The draft decision approves a minor reduction in waterways and drainage charges for 2026-27 before inflation:
- $124 for owner occupiers, down from $125 in 2025-26
- $186 for small business customers, down from $188 in 2025-25.
Melbourne Water can now respond to the draft decision.
Anyone else who wishes to provide feedback on the draft decision can do so on Engage Victoria until 1 May 2026. A public forum will also be held on 23 April 2026 at 5pm.
The commission will publish a final decision in June 2026. The new prices will take effect from 1 July 2026.
The commission has also released its draft decision on North East Water's prices.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
"The commission has considered whether Melbourne Water's proposed prices balance the need to deliver safe drinking water and invest in infrastructure, with the need to minimise cost pressures on retail water businesses and consumers."
"Our draft decision includes a 7 per cent reduction to Melbourne Water's proposed infrastructure expenditure, while still enabling them to spend more in this area than in the previous five-years period."
"The commission thanks customers and interested parties for their submissions and participation to date. We value and encourage feedback on our draft decision to help inform our final decision on Melbourne Water's pricing proposal."
Background
The commission issues price determinations that approve the maximum price water businesses may charge customers. These prices are based on an assessment of the efficient costs water businesses need to deliver services, including high-quality drinking water, reliable and secure supplies, and meeting environmental standards while supporting a growing population.
