OUR begins review of NWC’s proposed 54.9 per cent tariff increase

The Office of Utilities Regulation (OUR) has begun reviewing the National Water Commission’s (NWC) application for a five-year tariff adjustment, which includes a proposed initial average increase of approximately 54.9 per cent.

The application covers the 2026-2031 period and seeks to address what the NWC says is a significant gap between its operating costs and revenue generated under existing rates.

The OUR says its preliminary assessment identified gaps in the information submitted by the water commission. However, the regulator has found no substantial grounds to reject the application and has requested additional information from the NWC to facilitate its review.

Subject to receiving the required information on time, the OUR expects to complete its assessment and publish its decision by February 2027.

The application follows an earlier announcement by the NWC in October that it was seeking an increase of approximately 51 per cent in water and sewerage rates. The commission submitted its application to the OUR on October 16, arguing that higher operating expenses, particularly electricity costs, declining revenue collection and the need to finance critical infrastructure investments had placed pressure on its finances.

The proposed adjustment would affect approximately 500,000 customers. The NWC had also indicated that its planned investments would have to be revised if the requested increase was not approved.

The last tariff adjustment was granted in 2019.

In its latest application, the NWC is seeking an annual revenue requirement of $63.41 billion for the 2025/2026 base year, compared with estimated revenue of $40.93 billion under existing tariffs. This represents an additional $22.48 billion and would translate into an initial average tariff increase of approximately 54.9 per cent if approved.

The commission is also projecting that its annual revenue requirement will rise from $64.46 billion in the first year of the proposed rate period to $76.18 billion by the fifth year.

Other proposals include changes to the existing tariff structure, an increase of up to 10 per cent in fixed service charges, revised consumption blocks for residential and commercial customers, and the introduction of a separate tariff category for government customers.

The NWC is also proposing standardised billing across customer categories using the metric system.

The OUR says the impact on individual bills would vary according to customer category, water consumption and connection size.

The regulator says it will assess the justification for the proposed adjustments and their potential impact on customers before making a final determination.

As part of the review, the OUR will hold public consultations to allow the NWC to explain its proposals and give customers and other stakeholders an opportunity to express their views. Written submissions will also be accepted.

The consultation schedule is to be announced shortly.

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