ACTEW managing director Mark Sullivan says a 5 per cent rise in water charges should bring "a great deal of relief" to Canberrans, despite the territory's independent regulator originally calling for a price cut.
Mr Sullivan told a public hearing on Monday the water utility, which is carrying debts of about $1.4 billion, also has no strategy for paying off water security projects such as the enlarged Cotter Dam.
The ACT opposition has renewed calls for a full ACT Auditor-General's inquiry into ACTEW after the government-owned utility said its only plan was to pay off the interest on its loans for water security projects.
Treasurer Andrew Barr also revealed the change in water prices would mean a $20 million to $25 million hit to the ACT budget this financial year.
Changes that came in to effect on Monday will increase ACT water prices by 5 per cent and reduce sewerage charges by 18 per cent, saving the average household $83 a year.
The Independent Competition and Regulatory Commission had recommended cutting water prices by 16.9 per but said it was forced to increase charges to protect the financial viability of ACTEW.
Mr Sullivan told Monday's hearing "of course we have our costs under control".
"ACTEW has not ever been insolvent and is not in a position where it risks insolvency," he said.
Mr Sullivan said the 5 per cent increase in water prices should actually "provide a great deal of relief" for Canberrans.
The community had been warned that $600 million in water security projects, including the dam, could force bills up by $100 a year.
"The fact that we've got a determination which has looked hard at our business and has come through, in their words, a novel way of looking at business, we have seen that price of water kept down to 5 per cent," Mr Sullivan said.
"I think if you're an observer from outside, you'd be saying if that can happen then that's pretty good."
But under pressure from opposition MLAs, Mr Sullivan told the hearing ACTEW did not have a plan for paying off its water security infrastructure, beyond its current strategy of paying its borrowing costs.
Mr Sullivan said it was "plausible" that there may never be such a plan.
The hearing heard ACTEW had debts of $1.3 to $1.4 billion.
"The strategy recommended by ACTEW at the moment is to borrow for the water security
projects and meet those borrowing costs through our business,'' Mr Sullivan said.
''We do not have a strategy and have not put a strategy to government in terms of the final payment for those assets if there ever is a time when you put such a strategy.
''It's plausible that you would never put such a strategy.''
Mr Sullivan said ''most utilities are in debt forever''.
Treasurer Andrew Barr said the full impact the new water prices had on the ACT budget might not be known until the midyear review in February.
Opposition treasury spokesman Brendan Smyth said this created a problem for the Assembly, which is due to pass the budget in the second week of August.
He said there must be a proper performance audit of ACTEW by the Auditor-General.
Sign up for our newsletter to stay up to date.