HUNTER households face significantly higher water bills, primarily to help their Central Coast neighbours, a NSW Upper House committee has heard.
Infrastructure Minister Joe Tripodi said drought-proofing the Central Coast was the primary reason the Tillegra Dam would be built, though there would be "obvious benefits" to the Hunter as well.
In answer to questions over the price, Mr Tripodi said he would consider cheaper alternatives if they were available.
He said the dam could drop down the list during the mini-budget process.
"The only issue that is not under consideration is the payroll tax position, which we will be honouring," he said. "All other capital works programs could be the subject of consideration for re-prioritising."
Hunter Water Corporation told the pricing watchdog last month it wanted to charge an extra $322 per household over four years for capital infrastructure, including Tillegra Dam and to cover increases in operating costs.
Greens MLC John Kaye said on Monday the project was unnecessary, as the Central Coast's water supply had recently been assured by a Federal Government pledge to build a pipeline between Mardi Dam and Mangrove Creek Dam.
Mr Kaye said the $380 million price for Tillegra Dam could be well below the dam's final cost.
Hunter geologist Graham Holt predicted the dam cost could hit $1 billion. He believed the costing of the project was based on out-of-date geological maps.
Hunter Water denied his estimate.