A Tasmanian golf club that spent about $30,000 making its water connection smaller has been told that the charge it was trying to escape has been cut to less than a twentieth of its previous level.
From 1 July, TasWater changed the basis of its fixed sewerage charge. Instead of billing according to sewerage usage, it began billing according to the size of a customer's water pipe connection.
Mowbray Golf Club, in Launceston, had a 100mm connection, which it drew on only during droughts. Under the new structure that pipe attracted the top charge, and the club's annual water bill went from about $20,000 to about $40,000.
The club responded by changing the pipe. It paid an estimated $30,000 to sever the 100mm connection and connect instead to a 50mm one, and raised member fees by 10 per cent to help fund the work.
On 2 October, TasWater reversed the policy. Fixed sewerage charges have been cut from $20,000 to under $1,000. Connections of 100mm are now to be billed as though they were 20mm. Customers who have paid bills since 1 July have been offered refunds.
"Everyone's standing here going, why did we spend all this money?" said Hayden Roberts, the club's general manager. "I think it's only reasonable at this point that TasWater remediates these situations, whether it be credit or an outright refund," he said. The utility has said it understands the impact on customers, that it needs to own that and learn from it.
The reversal is expected to cost TasWater between $7 million and $14 million.
The club's position is now unusual. It owns a 50mm pipe, bought at its own expense, under a billing regime in which the pipe it used to have would be charged as though it were a fifth of its width.
The Questionable Times has examined the transaction and finds it sound. The club spent about $30,000 to secure a reduction that then arrived free of charge, which means the money bought the reduction three months early. Priced as a bridging facility, that is a rate no bank in Tasmania could have matched.
The members funded it with a 10 per cent increase in fees, so the cost has been spread across the membership as a permanent subscription to a tariff that no longer exists.
The physical outcome is the durable part. Refunds can be credited and charges can be rewritten, but a severed 100mm connection stays severed. The club has converted a billing problem into a plumbing arrangement, and only one of those can be reversed by a utility board.
Our analysts note the symmetry of the two responses. The club spent $30,000 adapting to the new charge. The utility expects to spend between $7 million and $14 million withdrawing it. Between them they have returned the club's water bill to approximately where it started, at a combined cost of up to $14.03 million.
The Department of Unnecessary Research has asked TasWater for one clarification. If a 100mm connection is now billed as a 20mm connection, it would like to know what is billed as a 100mm connection, and whether anything is.