Pricing Principles
| Related Pages | |
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| Pricing Details | |
| Cleaner Production | |
The Water Corporation has reformed its Industrial Waste tariffs in recent years, to reflect the COAG (Council of Australian Governments) microeconomic reform process, and to encourage Cleaner Production and best practice in waste management.
The following information outlines the principles which underlie the new pricing structure, and explains the reasoning behind these principles. It highlights the positive economic and environmental outcomes that these new pricing principles are designed to support.
Our shared community and environment objectives are supported through the three underlying principles of
- Equity (No Cross-Subsidies)
- Full Cost Recovery, and
- User Pays Charging
These aren’t mutually exclusive principles, so they don’t translate directly to different charging components within our pricing structure. Instead, they are applied concurrently, and aspects of all of these principles are interwoven throughout our charges and pricing structure.
But if micro-economic policy principles don’t seem very exciting, and all you really want to know is how much you’ll be charged, then you’ve come to the wrong page. See our Pricing Details page instead.
Equity (No Cross Subsidies)
This pricing principle supports both community & environment and economic efficiency objectives.
It ensures that the competitive advantage of your industry is not burdened by any inequitable cross-subsidy of industries with higher waste management costs, and allows efficient industries to continue to flourish.
It also ensures that the waste management and disposal costs of each industry is fully transparent, and are borne within the industry which generates this cost. This supports economically efficient allocation of environmental resources between industries, including allocation of the environment’s capacity to absorb treated wastes.
The removal of cross-subsidies from other users of the public wastewater system – notably domestic users – is obviously an issue of equity and fairness. However, the principle of equity is focussed primarily on the fair allocation of costs amongst users of the same service. The issue of cross-subsidies between users of different services are addressed through the principle of Full Cost Recovery.
Full Cost Recovery
The charges for our Industrial Waste service are structured to recover the full costs associated with collection, transport, treatment and ultimate disposal of your industrial wastewater. This includes an appropriate contribution to the capital costs of our treatment plants and reticulated sewerage network, as well as an appropriate share of the costs of operating and maintaining these systems, and any additional costs directly associated with the handling of industrial wastewater.
But you’re not paying twice for your sewerage service. Non-residential customers pay a volumetric component within the Annual Service Charge for their standard sewerage service, which is adjusted to reflect the proportion of your wastewater volume that is instead charged under the Industrial Waste service.
The principle of Full Cost Recovery is an important element of micro-economic reform. It ensures that the costs of waste management and disposal can be reflected in the price of goods and services in the economy, and discourages inefficient industries from imposing hidden costs on the community. Conversely, more efficient and less environmentally demanding industries are better able to flourish, as they gain proper advantage in the price signals influencing consumer demand for alternative products within the economy.
So Full Cost Recovery, in addition to supporting economic efficiency and equity objectives, can also have a positive influence in supporting environmentally sustainable economic activity – at least in broad and general terms. When combined with our third principle of User Pays Pricing, however, this can become a powerful and immediate incentive for individual businesses to pursue Cleaner Production and environmental sustainability.
User Pays Charging
User Pays Charging means that your charges are a direct reflection of the nature and volume of your wastewater stream. It allows you to reap the rewards of Cleaner Production initiatives in your own business. It enables you to realise directly any tangible rewards from your own good citizenship and your own responsible behaviours, and could even give you a cost advantage against your competitors!
But User Pays Charging also encourages you to find the most economically efficient and environmentally responsible way of disposing of your industrial wastewater.
If the municipal wastewater system is well suited to your wastewater stream, it will likely be a more cost-effective option. Conversely, if there is a more efficient and environmentally friendly option for disposal of your particular wastes, then there is no price distortion to discourage you from using it. And you can optimise your use of pre-treatment with sewer discharge to lower your overall costs – while reducing your impact on the environment!
To find out more about reducing your costs, including links to some excellent on-line resources, check out our Cleaner Production page. Its well worth a look.