Tasmanians will be charged between double and four times as much for water in 10 years unless councils and state regulators lower expectations, a government business scrutiny hearing has heard.
Water corporations chairman Miles Hampton said the three water corporations, established in 2009, had been expected to fix neglected infrastructure, improve services and provide a return to owner councils.
Mr Hampton said meeting those obligations would have required an increase of 10 per cent every year for 10 years - an unacceptable increase for customers already struggling with cost of living pressures.
Instead, the water corporations have implemented 6 per cent increases for the next three years, but Mr Hampton said that would still lead to a 400 per cent increase for some and 100 per cent rise for the average customer.
He called on councils, regulators and state government to urgently address the issue.
''If we do not find a compromise, we will inevitably face the rises I have outlined,'' he said.
He said Tasmanian water could become the most expensive in the country, despite there being an abundant supply.
Mr Hampton also revealed 20,475 customers had not paid overdue bills worth $15.2 million.
Despite the massive amount owing, the corporations had rarely punished non-payers by reducing their water supply to a trickle because it was too expensive to send staff out to properties to install and remove the restrictor.
Instead, the corporations are pushing to be able to recover the amount owed when the property is sold.
Another $603,000 owed by customers had been written off last financial year.
The three corporations will merge into a single body next year, which is expected to save at least $5 million a year.