Water utilities are experimenting with a bottom-up approach to water consultation and pricing

Australia’s monopoly water utilities are being pressured by regulators to spend more time listening to their customers, and the results can be surprising.

Pat McCafferty is the Managing Director of a company that supplies water to two million people in Melbourne.

His company, Yarra Valley Water, recently hired a consulting firm, newDemocracy, to execute a process that allowed clients to delve into the challenges the company faces and answer some very open questions about the business. future cost of their water.

Mr McCafferty said he was nervous about how it would work.

“The very first night of the jury process, I felt like I was handing over the keys to the car to my teenage son because we really went out of our way to let the community guide the process and make the key decisions.”

Ultimately, although customers played a major role in shaping the utility’s submission to the price regulator, this did not result in cost savings for consumers.

Patrick McCafferty says customers have suggested paying a bit more for improved environmental measures.(

Provided: Water of Yarra Valley

)

Customers appreciate the water savings

Pat McCafferty said when participants had time to think deeply about the issues, they came up with other priorities, such as supporting vulnerable people.

“If you’re having trouble paying your bill, those of us who don’t [struggling] are willing to pay more for programs that support these people. “

They also wanted the utility to invest in environmental programs involving water savings and a response to climate change, given that customers in Melbourne had been successful in reducing their consumption during the last drought.

An energy recovery plant
Customers are eager to support plans to transform commercial food waste into renewable energy.(

Provided: Water of Yarra Valley

)

Global experimentation

Iain Walker of consulting firm newDemocracy has observed the development of new consulting models around the world.

The Organization for Economic Co-operation and Development (OECD), for example, has encouraged the development of freedom of information laws and now supports more meaningful and open consultation models.

“The OECD has published an important report [in 2020] called “Catching the Deliberative Wave”, and all we really mean by that is asking people what they think when they’ve had time to think. “

Mr Walker said it was a very different process from the days of the old town hall meeting.

He said it was time to start asking open ended questions and even asking people what questions they must have answered to feel confident in the decision.

A large water supplier launches into the experiment

The country’s largest water supplier, Water New South Wales, has launched a similar ‘bottom-up’ consultation process.

The utility is due to go to the Independent Pricing and Regulatory Tribunal (IPART) in 2025 with a price submission, and in the past this has generally led to price increases, which has alarmed irrigators.

A Water NSW invoice listing the various charges
Understanding a water bill can be difficult, even for experienced operators. (

Provided: NSW Water

)

But this time, Water New South Wales is trying a “bottom up” approach to develop its submission.

Conversations at the kitchen table

Jonathan Dickson of Water NSW is a little more reluctant to “hand over the keys”.

Two farmers walk on the edge of a dam
Farmers are encouraged to deliberate at length with each other before submitting proposals to Water NSW on how much they should pay in 2025. (

Provided: NSW Water

)

While Yarra Valley Water has asked a group of 36 clients to forgo five Saturdays to go through a process, Water NSW is asking its clients to set up their own ‘kitchen table’ conversations to answer a series of questions.

They will have access to information from Water NSW as well as unedited submissions from the Commonwealth Water Holder, the NSW Farmers Association and the Irrigators Association, and they will have two months to brainstorm a response.

It’s the start of a three-year process that will eventually set the price for farmers, large businesses, small towns and cities in New South Wales.

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