HOUSEHOLDS will be slugged with a sharp jump in water bills starting this month.

The Essential Services Commission ruled retailer South East Water can increase prices by 22.8 per cent from 1 July.

The retailer services bayside suburbs from St Kilda to Frankston, the Mornington Peninsula, parts of the southeast and eastern Gippsland.

The independent regulator decided metropolitan water prices could rise by an average of 22.4 per cent, plus inflation, with the majority of the increase required to recoup the construction of Victoria’s $5.7 billion desalination plant near Wonthaggi built by the Brumby Labor government and Melbourne Water.

The commission flagged a possible 24.8 per cent rise for South East Water customers in a draft decision released in April (‘Steep rises in water costs from July’, The News, 21/05/13).

The final pricing decision means the average annual South East Water bill will rise by $222 to $1196 in 2013-14, according to the commission.

Bills will go up in line with inflation for a further four years until 2017-18, when the commission is due to reassess water prices.

South East Water had lobbied for a 34.9 per cent price rise in 2013-14, but this was rejected by the commission after it identified cost savings that can be made by South East Water and other metropolitan water retailers City West Water, Yarra Valley Water and Western Water.

However, South East Water’s 2013-14 price rise is the second-highest in the metro area, behind Yarra Valley Water’s 24.6 per cent jump and ahead of Western Water and City West Water increases of 12.3 per cent and 19.2 per cent.

“After the first year increase, price rises will plateau and will only move in line with inflation,” Essential Services Commission chairman Ron Ben-David said.

Victorian Council of Social Service said low-income households would be hit hardest. “The price increases will hurt those least able to manage the extra expense, including pensioners,” VCOSS acting CEO Carolyn Atkins said.

VCOSS is urging the state government to reform a 35 per cent water bills discount currently offered to low-income households to include the latest price rise, not just the cost of inflation.

“A 35 per cent discount on the entire bill, uncapped, would give better assistance to different-sized households and ensure people have equitable access to water,” Ms Atkins said.

The commission conceded some households would face difficulties paying water bills. “We encourage those customers to contact their water business for assistance,” Mr Ben-David said.

Metropolitan retailers have been granted an extra $5 million by the commission to “develop and maintain assistance programs”.