Water price hike to hit Vic battlers

Melbourne householders struggling to pay water bills, expected to jump by an average of around $280 next financial year, may receive a reprieve next Christmas.

Four of the city's major water retailers and Melbourne Water faced tough questioning from angry householders on Monday during a public forum designed to explain the proposed price hike.

Most of the increase of about one-third in owner-occupiers' water bills in 2013/14 is due to higher costs related to the yet-to-be-operational $6.1 billion Wonthaggi desalination plant.

After surveying customers, water retailers decided to lift fees in a one-off hit rather than spreading the increase evenly over the next five years.

Yarra Valley Water managing director Tony Kelly said customers preferred a quick shot of pain rather than price increases being rolled out over a longer period.

"The logic of going for the high price rise next year is really because our costs are going up, so the revenues are going up to match the cost," he told reporters.

Mr Kelly said the proposed price increase in 2013/14 was dramatic, and water retailers were conscious of the impact on householders.

He said the number of householders having difficulty paying their Yarra Valley Water bills had increased from 1700 to 3000 over the last five to six years.

"We are expecting it (the number of people battling to pay bills) to rise because of the significant price rise," he said.

"We are putting in place a number of programs to try and ease the pain."

A `smooth pay' option is planned from July 1 next year, when the price increases would come into effect, allowing customers to choose to pay weekly, fortnightly or monthly.

"Even the possibility of missing the Christmas period so that they've got that discretionary income for their Christmas presents," Mr Kelly said.

He said under the program that has been adopted in the United Kingdom, customers paid 10 instalments to cover 12 months, skipping the Christmas period, he said.

Ray Logan, a self-funded retiree from Mount Waverley, said householders should not face a sudden, steep hike in their bills to pay for the desalination plant.

"I am appalled with paying for the desal plant upfront," he said.

"Why do we have to bear all the costs for the infrastructure now if the community is going to benefit from it in the future?"

Melbourne Water and the water retailers have submitted five-year water plans to the regulator, the Essential Services Commission (ESC), for assessment.

The ESC will make its final decision on water prices in June 2013.

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