Western Power wants to hike street lighting charges by an astronomical 44 per cent from the middle of the year in a move that has blindsided councils, who warn they will have little choice but to recoup the millions of dollars in unexpected additional costs from ratepayers.
Stirling Mayor Mark Irwin said his council – the largest by population in WA – was potentially on the hook for $2.5 million, or the equivalent of a 1.5 per cent jump in rates to cover the cost of street lighting alone.
The City of Swan has already held an emergency meeting to approve a bump in its advertised rate increase from 3.25 per cent to 3.75 per cent – representing the extra $800,000 that would be required for street lighting.
In Kwinana, the cost of street lights is poised to spike by nearly $500,000 to $1.87 million.
To cover that impost, Kwinana chief executive Wayne Jack said the southern council would be forced to either slash services or ramp up rates by 4.95 per cent rather than the already advertised 3.95 per cent.
“To say we were shocked by this is an understatement,” Mr Jack said.
“Every council is towards the end of preparing their budgets for next financial year which then determines rates and this has come out of nowhere.”
The 43.85 per cent increase to street lighting charges in 2023-24 is contained in Western Power’s proposed price list, which is with the Economic Regulation Authority – the independent regulator – for approval.
A verdict is due to be handed down within a fortnight.
The massive spike compares to a forecasted 2.81 per cent increase in the most recent McGowan Government Budget handed down last May.
Swan chief executive Stephen Cain said the requested increase represented only Western Power’s network charges and that retailer Synergy – which is also state-government owned – would likely add an additional premium on top.
“This is completely unfair,” he said.
“It has come without any notice, without any consultation and completely outside what the State Government had forecast in its Budget update.”
A Western Power spokeswoman said the requested “one-off” price leap was a result of inflation, 28 per cent growth in the size of the streetlight asset base in recent years and a “step change in operational expenditure for streetlight maintenance”.
She added that Western Power was required to ensure the prices it charged were “cost reflective” and that all money billed on streetlights went to maintaining and upgrading that specific network.
Mr Irwin blasted the proposed increase as unacceptable.
“In simple terms, this is absolutely crazy,” he said.
“It is mum and dads already hurting through interest rate rises and cost of living pressure who are going to end up paying.”
A letter sent to the ERA by the WA Local Government Association on Tuesday warned the “magnitude of the proposed increase” would have a “significant financial impact” that had to be justified by Western Power.
“Early feedback from Local Governments is that absorbing this unexpected increase will require community services to be cut, or a higher than budgeted increase to rates – costs that will ultimately be borne by the community,” the letter said.