LAUNCESTON ratepayers will be slugged $5.8 million by the Tasmanian Water and Sewerage Corporation each year from this July for its combined sewerage and stormwater infrastructure - a charge Launceston Mayor Albert van Zetten has labelled unaffordable.
Auditors KPMG recently advised Ben Lomond Water that the company should charge the Launceston City Council for the combined system.
The $5.8 million sum includes infrastructure operating costs ($2.3 million), depreciation ($2.26 million) and a 1.3 per cent capital charge ($1.24 million).
Corporation chairman Miles Hampton, in a letter, acknowledged the steep cost but said it would be inequitable on Ben Lomond Water customers not to charge the council.
Mr Hampton said the decision was prompted by impending urban stormwater legislation that would not deliver a return to the corporation and its council shareholders for stormwater assets.
Mr Hampton has told the Primary Industries Department there should be the same three-per-cent return on stormwater assets as there was on non-stormwater assets.
Alderman van Zetten said the council would appeal to Premier Lara Giddings and Water Minister Bryan Green for the system's cost to be spread across the new state water authority's customer base.
He said the council had unsuccessfully attempted to get a resolution on its combined system before the water and sewerage corporations were formed in 2009.
The council had sought to retain ownership of the combined infrastructure and to charge the water company $11 million for operating costs, depreciation and a seven-per-cent capital charge.
The government transferred ownership regardless but no agreement between Ben Lomond Water and the Tasmanian Water and Sewerage Corporation on charging for the infrastructure was able to be reached - until now.
Alderman van Zetten said it seemed that ``goal posts have been shifted''.
``The proposed impost is unaffordable for the Launceston City Council and would be a gross injustice to the people of Launceston,'' he said.
``We believe the fairest outcome is a slight change in the legislation to recognise the combined system as a regulated service, and to allow the new statewide water authority to include the cost of the system in its pricing determination across its broad customer base.''
Launceston is the largest shareholder in Ben Lomond Water.
Launceston City Council general manager Robert Dobrzynski said in a bill submission said the cost of supplying services to consumers in areas where there was no return on investment was absorbed by all users, and so it should be with Launceston's combined system.
He said to do otherwise suggested cross-subsidies were selectively acceptable for some of Ben Lomond Water's services but not others.