The Essential Services Commission has released its final decision on how much Melbourne Water can charge for water, sewerage, waterways and drainage services over the next five years, starting 1 July 2026.
Melbourne Water is a wholesaler that supplies water and sewerage services to metropolitan retailers and water to some regional retailers, who then deliver services to homes and businesses. They also maintain waterways and drainage services, which form part of household bills for owner occupiers.
The independent regulator has approved Melbourne Water spending approximately $10 billion over the next five years to support the continued delivery of safe drinking water, sewerage services and waterways and drainage for the Melbourne community while maintaining vital infrastructure. This is around $434 million more than the approved revenue requirement for the previous five years, and supports the long-term investment and planning needed to maintain the essential services consumers rely on now and into the future.
The final decision allows Melbourne Water to invest $7.3 billion in essential infrastructure. This is 7 per cent lower than its initial proposal, but represents a $2.9 billion (51 per cent) increase in infrastructure spending compared with the previous five-year period. This includes upgrades to sewerage and drainage infrastructure to support population growth and maintain reliable services.
In making its final decision, the commission took into account Melbourne Water’s response to the commission’s draft decision and the views of participants in our public forum held in April and submissions from interested parties. The final decision also reflects the latest inflation forecasts and cost updates provided by Melbourne Water.
The final decision includes new connection principles that Melbourne Water will apply to commercial and industrial consumers seeking to use significant amounts of water (for example, data centres). These principles provide transparency about how prices will be calculated and protect the existing water consumer base by requiring cost-recovery from these large users.
From 1 July 2026, metropolitan Melbourne water bills will reflect inflation of 4.1 per cent, annual price updates for the water retailers, and the recovery of the 2026-27 desalination order cost.
The indicative bills, based on the average household consumption for each retailer, are set out below.
Indicative bills ($2026-27)
|
Water business |
Owner-occupier 2026-27 bill ($2026-27) |
$ change from 2025-26 bill |
Renter 2026-27 bill ($2026-27) |
$ change from 2025-26 bill |
|---|---|---|---|---|
|
Greater Western Water (Central region) |
$1,162 |
$92 |
$548 |
0 |
|
Greater Western Water (Western region) |
$1,222 |
$73 |
$398 |
–$1 |
| South East Water |
$1,145 |
$87 |
$579 |
$12 |
| Yarra Valley Water |
$1,176 |
$62 |
$582 |
$39 |
Waterways and drainage bills ($2026-27)
|
Customer group |
2026-27 bill ($2026-27) |
$ change from 2025-26 bill |
|---|---|---|
|
Residential charge |
$130.56 |
$5.55 |
| Non-residential charge |
$196.16 |
$8.35 |
The commission has also released its final decision on North East Water's prices.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
“The final prices balance Melbourne Water’s need to deliver safe drinking water and sewerage services, healthy waterways and invest in infrastructure, while making sure customers are not asked to pay more than is needed.”
“The commission thanks customers and interested parties for their submissions and participation during the consultation process. We considered all feedback to help inform our final decision on Melbourne Water’s pricing.”
Background
The commission issues price determinations that set the maximum prices water businesses may charge customers. These prices are based on an assessment of the efficient costs required to deliver services, including high‑quality drinking water, reliable and secure supplies, and meeting environmental standards while supporting a growing population.
Contact details:
To arrange an interview with Essential Services Commissioner and Chairperson, Gerard Brody, please contact: [email protected].,gov.au or 0437 677 385
