Murray-Darling Basin Authority
Independant Pricing & Regulatory Tribunal
Tamworth Regional Council Media Releases
Northern Daily Leader Extracts
TRRRA Facebook Extracts
The Murray-Darling Basin Authority is responsible for planning the Basins water resources. This includes the Peel and Namoi valleys.Water pricing is one of the most important issue for all users in the Region and water costs in the Peel Valley are exorbitant compared to the rest of the Basin.
Murray-Darling Basin Authority
With the enactment of the Water Act 2007, the Murray–Darling Basin Authority (MDBA) was established as an independent expertise-based statutory agency.
For the first time in the Basin’s history, one Basin-wide institution is responsible for planning the Basin’s water resources, with all planning decisions made in the interest of the Basin as a whole.
Our primary roles include:
- preparing, implementing and reviewing an integrated plan for the sustainable use of the Basin’s water resources
- operating the River Murray system and efficiently delivering water to users on behalf of partner governments
- measuring, monitoring and recording the quality and quantity of the Basin’s water resources
- supporting, encouraging and conducting research and investigations about the Basin’s water resources and dependent ecosystems
- advising the Australian Government Minister for Water Resources on the accreditation of state water resource plans
- providing water rights information to facilitate water trading across the Basin
- engaging and educating the Australian community about the Basin’s water resources.
Our current governance arrangements were preceded by almost a century of different forms of collaborative management with Basin states — in the first instance NSW, Victoria and South Australia and more recently joined by Queensland and the ACT.
The sustainable management of the Murray–Darling Basin river system is a collective endeavour of Basin states and the Australian government, with river dependent industries and communities.
Basin Plan implementation
The Basin Plan aims to ensure the water resources of the Basin are shared between all water users in a sustainable way. It is about striking a balance and maintaining a healthy system to support productive industries and sustainable communities.
River Murray operations
We are responsible for directing the sharing of the River Murray’s water on behalf of the Basin states. The Murray–Darling Agreement, (a schedule of the Water Act 2007) spells out these arrangements.
Under the Agreement, we operate the River Murray system and oversee asset management (Dartmouth and Hume Dam, Lake Victoria, Lower Lake barrages, weirs and locks) with our state partners.
Murray-Darling Basin Map
Murray-Darling Basin states, Commonwealth sign off on water delivery projects well ahead of mid-year deadline
Updated 25 Apr 2016
Murray-Darling Basin state water ministers and the Commonwealth have agreed to a list of water efficiency projects, well ahead of their mid-year deadline.
Ministers representing New South Wales, Queensland, Victoria, South Australia and the ACT, as well as the Federal Water Minister Barnaby Joyce, met in Brisbane on Friday morning.
They signed off on 37 projects designed to improve water efficiency and remove constraints in the system, which will allow them to adjust the sustainable diversion limit targets set out in the Basin Plan.
Ministers had until the end of June to agree on the list, but the ABC understands they were keen to finalise their decision before the federal election campaign begins.
The Commonwealth Government will enter caretaker mode when the election is called, which could have posed problems for its capacity to approve projects.
The ministers have also agreed to ask Federal Parliament to amend the Basin Plan, to give the states another year to come up with a second tranche of projects to return more water to the environment through efficiencies rather than buybacks.
In a joint statement released after the meeting, the ministers said the Murray-Darling Basin Authority (MDBA) had modelled the impact of 15 of the 37 nominated projects so far, and estimated the modelled projects could offset the Basin Plan’s target by 370 gigalitres.
“The MDBA will provide updated figures to the [ministers] as the modelling progresses and a final number will be known when the MDBA has modelled the complete package,” the joint ministerial statement said.
“The Council agreed to keep the community informed of progress.”
NSW Water Minister Niall Blair said there was no miscalculation on what his state could deliver in terms of water saving measures.
“We’ve always said that we want to make sure that we get the environmental benefit and still be able to be productive in NSW,” he said.
“We think we can do both.
“Allowing things like the carp herpes virus to be credited for an environmental benefit is, in my mind common sense, rather than just buying productive water to run it down the river.”
It is a move supported by the NSW Irrigators Council and its CEO Mark McKenzie.
“We’re trying to get to the point of having the environmental outcomes of the Basin Plan delivered, without having to go back into the marketplace and buy more water in NSW and in the other states.
“If we can achieve that, what he [Minister Blair] has outlined, then it will be a very good day for the irrigation sector in NSW.”
The meeting also heard that the MDBA expected to finalise its Northern Basin review by mid-July.
Independant Pricing & Regulatory Tribunal- IPART
IPART is the independent regulator that determines the maximum prices that can be charged for certain retail energy, water and transport services in New South Wales. We also determine local government rates. To ensure the quality and reliability of these services, we monitor service delivery, audit suppliers and oversee licence compliance by certain water utilities and retail energy suppliers.
IPART also serves as the NSW Government’s economic advisor and policy think tank. In this role, we review the pricing of other services and investigate various aspects of industry productivity, competition, performance and planning. We administer the Energy Savings Scheme at the Government’s request. We provide independent regulatory decisions and advice to protect and promote the ongoing interests of the consumers,taxpayers and citizens of New South Wales.
Media Releases from Ipart
The full report for the new prices from July 1 2016 is located here: Water Prices
Tamworth Regional Council media releases:
Council fights on over raw water prices
Thursday 10 July, 2014
Raw water prices in the Peel Valley are the most expensive in the NSW Murray Darling Basin.
Tamworth Regional Councillors have reaffirmed their commitment to continue their fight on behalf of local residents over the ‘highly inequitable’ pricing of raw water in the Peel Valley – which is the most expensive in NSW’s Murray Darling Basin.
The issue arose when they considered a report at Tuesday night’s Ordinary Meeting about the Australian Competition and Consumer Commission (ACCC) Final Determination into State Water’s Bulk Water Pricing Application for Customers in the Murray Darling Basin 2014-2015 to 2016-2017.
The report reveals the ACCC’s decision handed down on 26 June will mean the price paid for water in the Peel Valley will rise by 33 per cent over the next three years, incorporating an annual 10 per cent cap.
The report highlights the huge inequity between the prices paid for raw water depending on the valley the water is taken from.
For example for Tamworth City, which sources the bulk of its water from the Peel Valley, the annual cost in 2016-2017 to access its high security entitlement of 16,400 Megalitres and average annual use of 4,813 Megalitres will be $813,000. Yet if Tamworth was able to source the same water from the Namoi Valley at Gunnedah, 75 kilometres away, the price would be $362,000 or less than half the price. If Tamworth was able to move to the Murrumbidgee Valley, the price for the same quantity of water would be $76,000 – more than 10 times less than the price paid in the Peel.
The cost of high security water in the Peel River is already the highest per megalitre west of the Great Divide in NSW. Its costs have already increased by 196 per cent since 2002-2003 to the current price in 2013-2014, as a result of Independent Pricing and Regulatory Tribunal determinations.
Tamworth Regional Councillors supported a recommendation for Tamworth Region Mayor Col Murray and General Manager Paul Bennett to seek a meeting with the NSW Minister for Water Kevin Humphries to discuss raw water pricing.
Their intention is to urge the NSW Government to ‘at the very least’ continue to subsidise raw water prices within the Peel Valley.
They will also seek the minister’s support to address the inequality between prices paid for raw water in the Peel compared to other valleys in the Murray Darling Basin.
Councillors also agreed to continue to support the Peel Valley Water Users Association and other groups seeking more equitable pricing for water in the Murray Darling Basin.
New pricing structure opposed
Since January this year, Council has been actively lobbying against a new pricing structure for raw water under consideration by the ACCC because it would result in Peel Valley water users continuing to pay the highest prices in the State, west of the great divide.
In March, the ACCC published a draft determination foreshadowing increased prices in the Peel and Council decided to lodge a written submission strongly opposing any increase in costs of bulk water in the Peel Valley.
Council’s submission called for the retention of the existing 40:60 split between fixed and variable charges for recovery of State Water charges, but encouraging a split of 25:75.
It also sought the NSW Government’s agreement that if the final determination of the ACCC resulted in increases to the cost of bulk water in the Peel from 2013-2014 levels, the Government would pay the full cost of the increase, so that costs incurred by irrigators and other consumers in the Peel do not increase for the three years of the determination.
The tabled report formally advised Councillors the ACCC handed down its final determination but ‘contains very few changes from the draft’.
‘None of the changes have any effect on the prices paid in the Peel,’ said the report. ‘Some changes were made to the prices paid in the Murray, Murrumbidgee and Border Valleys which will see the prices paid increase over those detailed in the draft. However, the final determination, with respect to the Peel, simply ratifies the draft determination.’
Ongoing subsidy essential
The report said the ACCC received a number of submissions in relation to pricing in the Peel Valley which are mentioned specifically in the final determination including an explanation as to how the 10 per cent price cap each year is intended to avoid the ‘price shock’ under a full cost recovery model.
‘The ACCC considers that continuing a cap on annual price increases in the Peel Valley, and a NSW Government subsidy to support this, would best meet the (Murray Darling) Basin Water Charging Objectives and Principles,’ the report said.
‘This approach averts a price shock and the perverse pricing outcome that would occur if prices moved immediately to full cost recovery over the 2014-17 period.’
The NSW Minister for Water has not yet confirmed with the ACCC whether subsidies will be provided for the Peel Valley during 2014-17.
Council and State Member for Tamworth, Kevin Anderson, have already spoken with Deputy Premier Andrew Stoner this year seeking support for an increase in Peel Valley subsidies to ensure the price paid by water users does not rise during the next three years.
Bulk water price meetings in Tamworth
Tuesday 11 August, 2015
Tamworth Regional Councillors received a report at tonight’s Ordinary Meeting which advised them of two public meetings to be held in Tamworth before the end of the year to discuss bulk water prices.
The report, Update on Government Related Bulk Water Activities, gave an overview of recent announcements and activities by both the State and Australian governments in relation to bulk water supply in the Murray Darling Basin.
Tamworth Regional Council has been a strong advocate of a ‘postage stamp’ pricing policy for water in representations to governments at a Federal and State level over a number of years. Council has repeatedly expressed its disappointment over the current pricing structure which has resulted in Peel Valley water users paying, in some cases, many times more for water than other centres in NSW.
In June this year, the Australian Competition and Consumer Commission approved increases of about 9 per cent on Peel Valley water users. It means high security licence holders, including Tamworth Regional Council, will pay $31.65 a megalitre for water. Namoi Valley users will pay $16.81 a megalitre.
The report considered at tonight’s meeting, among other issues, informed Councillors how a public forum as part of the ACCC Review of Water Charge Rules will be held in Tamworth on Monday 24 August and a public hearing as part of the NSW Independent and Regulatory Tribunal (IPART) Review of Department of Primary Industries (DPI) Water charges will be held in Tamworth on Monday 16 November.
The provision of town water across the Tamworth region relies largely on the administration of bulk water, which is undertaken by two NSW Government Agencies: Department of Primary Industries Water (formerly the NSW Office of Water) and NSW Water (formerly State Water).
The report said: “At this stage there are possible financial implications for Council in relation to both the change to water rules and the review of DPI Water charges, however, the effect cannot be calculated at this time.” The ACCC Review of Water Charge Rules started last year and has included the release of an issues paper. Stakeholder consultation started last month and will continue until the end of this month before draft advice will be released in September or October.
The Council report said once the draft advice has been released, Council will need to advise whether or not Council will make a submission. The final advice from the review (including proposed rule amendments) is expected to be presented to the Minister in December this year.
The IPART is undertaking a review of prices charged by Department of Primary Industries Water and will set the maximum charges that can be applied by DPI Water from 1 July 2016, for a period of three or four years.
The review of DPI Water Charges issues paper was released in June this year. A submission from DPI Water is due to be made by 11 September 2015 and will be made public and stakeholders including Tamworth Regional Council will be asked whether it wants to make a submission at that time.
All public submissions are due by 9 October with three public hearings to be held in November in Tamworth, Sydney and Griffith.
The draft report and draft determination will be released on 8 March next year with submissions to be received until 4 April 2016. The final report and determination of the maximum water charges levied by DPI Water is scheduled to be made on 7 June, 2016.
The report considered by Councillors tonight also advised the ACCC is seeking submissions about the draft decision to accredit IPART as the regulator of water infrastructure charges in the NSW Murray- Darling Basin from 1 June 2016 for 10 years.
Submissions close Wednesday 26 August 2015. The ACCC intends to make its final decision on IPART’s accreditation application by 25 September 2015.
“Assuming IPART is finally accredited by the ACCC then future reviews (or at least for the next 10 years) of water charges levied by both DPI Water and Water NSW will be undertaken by NSW IPART,” the Council report said.
“Whilst the ACCC is calling for submissions on its draft decision it is considered there is little value in Council providing a response at this time.”
Council pushes on for ‘postage stamp’ water prices
Wednesday 16 December, 2015
Tamworth Regional Council is calling on the Australia Competition and Consumer Commission (ACCC) to reconsider its opposition to “postage stamp” pricing of raw bulk water in its submission to its Review of Water Charges.
As part of its ongoing fight on behalf of local residents over the highly inequitable pricing of raw water in the Peel Valley, Council’s submission will:
- support the introduction of postage stamp pricing or, at the very least, seek an assurance that the amended rules will not preclude postage stamp pricing if it was to be introduced in the future;
- highlight what appears to be an inconsistency in the application of pricing principles as evidenced by the Department of Primary Industry’s water proposal currently being considered by the Independent Pricing and Regulatory Tribunal (IPART); and,
- urge the ACCC to reconsider its position on postage stamp pricing.
“Tamworth Regional Council has expressed concerns for some time about how water users in the Peel Valley will pay one of the highest prices in the State for raw water under a new pricing structure being considered by the Commission,” said Tamworth Region Mayor Col Murray.
“Council has hoped the review of the water rules undertaken by the ACCC may have endorsed a more flexible approach to water pricing rather than the full cost recovery/valley based pricing approach.
“Council’s preference is for a “postage stamp price” for bulk water in NSW where the cost is the same across the State, like postage stamps.”
A report to Council said the main concern for Council is “whether or not the existing rules allow the adoption of a postage stamp price, and if not, whether the rules should be changed”.
Northern Daily Leader Extracts
Irrigators and council take water price rises to ACCC
Nov. 25, 2013, 4 a.m.
BIG IMPACT ON PEEL: State Water is set to increase water charges by up to 30 times the current rate.
ALREADY sky-high Peel water usage fees will see a dramatic rise as a result of a controversial State Water proposal – and household water costs are set to follow.
Peel irrigators and Tamworth Regional Council (TRC) representatives took their water concerns straight to the top in a meeting with the Australia Consumer Competition Commission (ACCC) on Wednesday.
Their next target is Simon Birmingham, the parliamentary secretary to Environment Minister Greg Hunt, whom they hope to meet with in early December.
Peel water users already pay 10 times as much as their Murrumbidgee counterparts, but under the State Water proposal to change the tariff structure, water users would be paying up to 30 times more.
Local users are expecting to pay nearly double their current fees, with a rise from $42.26 per megalitre to $74.34 a megalitre, while users in the Murrumbidgee get away with paying just $2.46 for each megalitre used.
State Water’s plan to increase revenue by 13 per cent will have the biggest impact on Peel water users, who pay twice as much as Namoi users and three times as much as those in the Hunter.
State Water pricing policies are set on a valley-by-valley basis, with water users sharing the cost of dam operation.
With only 200 users in the Peel, water supplied from Chaffey Dam is already the most expensive in the state.
The State Water proposal to the ACCC review includes changing the tariff structure from a 60 per cent fixed, 40 per cent variable structure to 80 per cent fixed, 20 per cent variable.
Most water users will pay more than 20 per cent more for water, but TRC, Chaffey Dam’s largest customer, will cop the biggest bill – about double their usual cost.
“Under our current conditions, if we use our average amount of water, we pay $613,000 and under the proposal, in 2016-2017 we’d pay
$1.27 million,” water enterprises director Bruce Logan said.
Last year’s change has already seen TRC’s water bill increased by 17.5 per cent from $520,456 to $613,597 – an extra $93,000.
Mr Logan said while council was able to wear that cost increase, the increased State Water rates would certainly be passed on to ratepayers.
“Council has resolved that water should have a postage-stamp price across the state,” he said.
According to Peel Valley Water Users Association president Ildu Monticone, if State Water priced water across the state equally it would cost about $7 per megalitre for each user.
“State Water is being obnoxious in its pricing,” Mr Monticone said.
“A far as the irrigators go, they’ll have to pass these increasingly stupid costs on to customers.
“Hay will be more expensive and it’ll eventually render the Peel Valley unviable as an irrigation area.”
‘The pricing structure needs to be fair’
THE state’s water pricing structure needs to be fair to ensure competition across valleys, according to Tamworth councillor James Treloar.
Mr Treloar said the northern part of the state was being enormously disadvantaged by having to pay “ridiculous” prices.
“We believe the state has an obligation to ensure an equal opportunity,” Mr Treloar said.
Mr Treloar said he has met with Water Minister Katrina Hodgkinson three times, but those meetings have amounted to nothing.
“We’ve got a double-handed policy, where we’re expected to pay more, but also let water downstream for the Murray Darling Basin Plan,” he said.
“If you compare Tamworth to Wagga Wagga, both cities have abattoirs, and one of their biggest costs is water.
“The water charges are a lot less at Wagga Wagga, so further development and expansion will go there.”
Platitudes from State Water conceal the real facts
Dec. 5, 2013, 4 a.m.
Concerned Dungowan irrigator Ildu Monticone addresses a Soapbox where he felt many of the facts were lacking.
I feel compelled to respond to the Soapbox article written by State Water communications manager Tony Webber in The Leader on Friday, November 29, because of the facts that are not communicated in his letter, such as:
- Importantly, State Water’s proposed price increases are not just an irrigators’ problem – every residential and every business ratepayer in Tamworth pays about eight times the water rates that are levied now in Albury.
In addition, State Water is proposing to double the existing water charges to Tamworth Regional Council next year, so you can expect that your water rates will at least double.
- The proposed general security regulated water charge for irrigators next year for one megalitre will be $2.46 in the Murray, $74.34 in the Peel Valley and $907.26 in the North Coast.
Is this an equitable basis for a state-owned monopoly to charge its customers? Is electricity or car registration or fuel prices, or any other commodity charged in this manner across different parts of NSW?
- The current charge for general security regulated water in the Peel Valley is $41.61/ML; in the Namoi the current charge is $19.98 (about half the Peel); and in the adjoining Hunter Valley the current charge is $14.77 (about one third of the Peel).
Is this equitable, and exactly how does it promote competition and fair trading?
- In the Peel Valley, State Water is proposing a 79 per cent increase in the water usage costs next year, and a 262 per cent increase in entitlement charges over the next three years. How can these massive increases by a state-owned monopoly be justified when the CPI is less than 5 per cent?
- State Water has a requirement for an average increase in revenue of 3 per cent per year. On State Water’s existing pricing structure, its current charges will produce a financial result that will exceed its revenue requirement by $6.2 million in the current financial year.
Therefore, on what basis can State Water justify imposing additional excessive price increases in the Peel Valley?
- State Water’s proposal to change the ratio of charges – fixed against usage – demonstrates the urgent need for State Water to come to terms with the business environment in which it operates, and the need to adjust its costs accordingly.
Would the ACCC allow any other business to charge its customers 80 per cent of their fixed costs when they have no product to sell?
- It is a stretch of the imagination to believe that “State Water must justify to the ACCC every dollar it proposes to spend as prudent expenditure that is necessary for operations”.
For example, State Water is proposing to spend $30 million on computer systems over the next three years – none of these computer systems are for the benefit of the irrigators, yet the irrigators are expected to cover the whole cost of $30 million.
There are also other issues for the regulator to consider, such as the duplication of costs resulting from having two government entities involved with bulk water delivery in NSW – namely State Water and the NSW Office of Water – and having two regulators involved in monitoring their activities – namely IPART and the ACCC.
We don’t need platitudes from Mr Webber.
What everyone in the Tamworth region needs is action by the regulator to rectify a grossly inequitable and unfair pricing system which discriminates against Tamworth and the whole Peel Valley.
MP calls on IPART to act on water prices
Dec. 6, 2013, 4 a.m.
TAMWORTH MP Kevin Anderson has called on the Independent Pricing and Regulatory Tribunal (IPART) to address “grossly unfair” water charges being forced on the region’s ratepayers and irrigators.
In the latest salvo in a battle to stop State Water implementing harsh new charges on Peel Valley users, Mr Anderson demanded IPART introduce a “cross-subsidisation scheme” for the region, which would force water users in other valleys to help pay for the Peel’s increased charges.
The State Water price hikes, based on a user-pays system, are currently being reviewed by the ACCC, which will hand down its findings on February 14 before the matter is considered by IPART.
“It is grossly unfair the Peel Valley is charged 10 times as much for water as some other valleys,” Mr Anderson said.
“I’m imploring IPART to look at cross-subsidisation where one valley helps another, similar to what happens at the Hunter and Paterson River.
“They know the storage and delivery costs can’t be met by Paterson users and they can’t get full cost recovery, so they share the costs with the Hunter.
“Exactly the same situation is happening in the Peel and IPART should recommend the same thing.”
The new charges will double Tamworth Regional Council’s (TRC) fixed water costs and see an across-the-board 7 per cent increase on water bills, while Peel irrigators feel the rise could decimate the local irrigation industry.
TRC ratepayers already pay among the highest rate in the state for water.
Meanwhile, Tamworth councillor James Treloar and a contingent from Peel Valley Water Users held a crisis meeting with federal parliamentary secretary for water Simon Birmingham in Canberra on Wednesday to discuss the issue.
Cr Treloar described the meeting, which was also attended by New England MP Barnaby Joyce, as “promising”.
“We expressed a range of concerns, including the fact (the charges) would impact on the region’s potential to attract new businesses,” Cr Treloar said.
“He (Mr Birmingham) was very understanding and seemed well-briefed.”
Tricks of the trade: Humphries, Anderson under fire for water trading ‘lies’
July 16, 2014, 4 a.m.
NO HELP: Peel Valley Water Users Association president Ildu Monticone says a new trading scheme will do nothing to address the sky-high water prices paid by irrigators.
A TAMWORTH irrigator has dismissed as “outright lies” claims by two local state MPs that a new trading scheme will drive down sky-high water prices in the Peel Valley.
Laurie Pengelly is furious that NSW Water Minister Kevin Humphries and Tamworth MP Kevin Anderson are trumpeting the one-year trial as a victory for the region.
Under the existing pricing structure, by 2016-17 Peel Valley irrigators will pay 2300 per cent more for each megalitre of water than their counterparts in the Murray Valley.
The gross inequity, described as price gouging by many in the local industry, has prompted persistent calls for a standard water price across each of the basin’s valleys.
Such a “postage stamp” pricing approach would see the cost of water for Peel Valley customers drop from $55.13 a megalitre to just $7.37, according to State Water.
But hopes that Mr Humphries and Mr Anderson would advocate for the change appeared to be dashed last week when they instead announced a new water trading scheme.
In a press release titled “Driving down water prices in the Peel Valley”, the MPs said Peel irrigators would be permitted to trade with their Namoi Valley neighbours.
Mr Humphries described the scheme as a “very good result for irrigators … and the people of Tamworth” as it increased ways for Peel water users to “generate income”.
Mr Anderson said the scheme, together with the upgrade of Chaffey Dam, demonstrated the government’s commitment to “provide cheap and reliable water to residents”.
However, Mr Pengelly said the proposal would do nothing to drive down prices and, at its absolute best, might merely go some way to mitigating future price rises.
“Driving down water prices in the Peel Valley is outright lies – you can quote me on that,” Mr Pengelly, a former president of the Peel Valley Water Users Association, told The Leader.
“We can’t trade because there is no allocation for the general-security users in the Peel … so the big trial that’s going to reduce our prices is a non-event.”
Mr Pengelly said a closer look at the terms of the scheme on the NSW Office of Water website revealed the greatest beneficiary from the scheme, with all its additional fees and charges, would be State Water, not long-suffering local irrigators.
The Leader put a series of questions to both Mr Humphries and Mr Anderson yesterday and received a response from a spokesman for the water minister.
The spokesman said Peel irrigators with no water to start the season with would still benefit in the trial’s first year, but did not elaborate how.
To the question of whether the scheme was designed simply to allow State Water to recoup a higher portion of its costs, the spokesman answered “no”.
Asked exactly how the scheme would drive down prices, the spokesman said: “… given the potential for the Chaffey Dam augmentation to increase the volume of trading between the Peel and the Namoi, operational costs will be shared amongst a greater allocation volume, meaning that usage costs per megalitre in the Peel will fall.”
Mr Pengelly and an equally angry sitting Peel Valley Water Users Association president Ildu Monticone will put their concerns to Mr Humphries at a meeting in Sydney this afternoon.
Minister defends water trial
July 18, 2014, 4 a.m.
NSW Water Minister Kevin Humphries has slammed local irrigators for their “rabid protestations” over the issue of water pricing in the Peel Valley.
The Barwon MP has launched a vigorous defence of a new water trading trial between the Peel and Namoi valleys that he says will drive down prices.
The one-year trial – with an option to be extended for a further two years – allows Peel Valley farmers to trade their general security allocations to users in the Namoi Valley.
The Peel Valley Water Users Association (PVWUA) expressed scepticism over the scheme’s claimed benefits, with Tamworth irrigator Laurie Pengelly describing it as “outright lies”.
Mr Humphries took umbrage at the criticism and said the market-based solution would “enable a decrease in prices over time” and give irrigators an alternative source of income.
“The only conceivable way the trial will fail to deliver lower prices is if it is actively resisted by licence holders in the Peel,” he said.
“Should the Peel Valley Water Users Association wish to perpetuate the problem and not be part of a solution, they will ultimately have themselves to blame.”
According to the Australian Competition and Consumer Commission’s final price determination last month, by 2016-17 Peel Valley irrigators will pay about 23 times more for each megalitre of delivered water than their counterparts in the Murray Valley.
Mr Pengelly and PVWUA president Ildu Monticone travelled to Sydney for a pre-arranged meeting with Mr Humphries on Wednesday to discuss the policy, but the minister was a no-show.
Instead, they emerged from a tense hour-long meeting with two staffers claiming to be none the wiser from the experience.
“After the meeting, we are no better informed on the effect of temporary trading on the water usage prices in the Peel Valley than we were prior to the meeting,” Mr Monticone said.
“If it is true that temporary trading will actually reduce the water charges in the Peel Valley, then no-one has provided the evidence to demonstrate the real impact on prices to us. We have now requested that the ACCC provide us with the relevant calculations … because we have been unable to obtain any figures from the minister’s office.”
However, Mr Pengelly said the trip to Sydney was not a complete bust as it was made abundantly clear uniform water prices – so-called “postage stamp” pricing – would never happen under a Coalition government.
“In a sense it was a complete waste of time, except that we now know exactly where we stand – they are not going to make any attempt to have postage stamp pricing,” he said.
“And they are not going to make any attempt to put a bill before parliament to give reasonable pricing for the Peel and the North Coast and South Coast valleys.”
Is a fair water price for the Peel Valley too much to ask
April 9, 2015, 4 a.m.
Tamworth’s Mark Rodda writes in hope of equity for the Peel Valley when it comes to the price of water.
I refer to the story titled “West cheated out of voice” (NDL, Saturday, April 4) regarding the lack of a minister from Western NSW at the cabinet table.
Sadly, and indeed regrettably, Kevin Humphries demonstrated unequivocally that to have an actual MP sitting at the cabinet table representing our region was pointless.
As we are all well aware, in the Peel Valley we suffer significantly higher raw water charges than any other catchment in the great state of NSW because of State Water’s desire for full cost recovery of the facilities provided by the government – you’d think State Water was already privatised.
There was absolutely no desire by the former minister for Western NSW and minister for Water to rectify this gross inequity.
It was incredible really, an MP professing to be for regional NSW but was happy to retain a system that openly discriminated against people in the Peel Valley.
To some onlookers it appeared that businesses and farms within the Barwon electorate were valued more highly than businesses and farms in the Tamworth electorate.
If unchanged, the current water pricing policy is set to raise the price of raw water dramatically in 2016/17 and will impact on every water user in the Peel Valley, including ratepayers of Tamworth city.
With Kevin Humphries’s replacement, I am hopeful this issue will now be addressed with an equitable and commonsense approach, with the government adopting a policy that doesn’t discriminate against the people living in the Peel Valley or businesses hoping to eke out an existence under trying economic and climatic conditions.
In other words – water pricing equity across NSW.
I don’t think that is too much to ask for.
New minister to visit – Council hopes for solution on water pricing
April 13, 2015, 4 a.m.
TAMWORTH Regional Council is hopeful the state’s new water minister can help solve the Peel Valley’s ongoing problem of crippling water prices.
Niall Blair, who has replaced Barwon MP Kevin Humphries in the role, will travel to Tamworth in the coming weeks to meet with council representatives.
Water users in the Peel Valley, including residents, irrigators and businesses, pay about 20 times more for a megalitre of raw water than their counterparts in the state’s south.
The discrepancy not only places a significant burden on existing water-intensive industries, but discourages others from establishing operations in the valley.
Before the March election, council ranked obtaining a commitment from whichever party won power to finding a solution as one of its top 10 priorities.
Tamworth deputy mayor Russell Webb said Mr Blair was aware of the issue and had volunteered to come to Tamworth to meet with key stakeholders.
“At the moment, we have a situation where our water is so much dearer than the other valleys that it is just fundamentally unfair,” he said.
“We do have businesses here, such as abattoirs, that are high water users and they are very aware they could pay a lot less for water if they were in another valley.”
Councillor Webb said every possible solution would be put on the table in a bid to devise a pricing system that provided locals with a “fair and reasonable” outcome.
However, he said council’s fervent wish for price parity right across the state’s valleys was probably unlikely.
“I believe the best outcome is for postage stamp pricing, where we all pay the same, but I’m a realist and accept that is probably not going to happen,” he said.
“We need to reconsider what has been done in the past and look to the future, with new alternatives and maybe a combination of solutions might actually form an acceptable outcome.”
Peel Valley – ACCC grants 11.5 per cent water hike
June 15, 2015, 4 a.m.
THE Peel Valley’s already astronomical water prices are set to rise again next financial year after the country’s peak competition regulator signed off on a fresh round of hikes.
The Australian Competition and Consumer Commission (ACCC) has this month approved further increases of about 11.5 per cent on the region’s long-suffering local water users.
The decision to allow Water NSW to levy the higher prices came despite objections from Tamworth Regional Council and the Peel Valley Water Users Association.
It means high security licence holders, including Tamworth Regional Council, will pay $31.65 a megalitre for the water it uses to supply the city.
In contrast, the Peel’s neighbours in the Namoi will pay just $16.81 a megalitre, while users in the Murray and Murrumbidgee will be hit with charges of just $4.79 and $3.63 respectively.
Tamworth councillor Phil Betts described the discrepancy between the valleys as “ludicrous” and said the state government must act immediately to bring about change.
He said new Water Minister Niall Blair, who replaced Barwon MP Kevin Humphries in the portfolio after the March election, needed to meet with local stakeholders in Tamworth soon.
“It’s extremely disappointing,” he said. “It’s not only disappointing, it’s going to be to the detriment of this area if we can’t get some equity in water pricing.
“For the irrigators to produce the same bale of hay down the lower end of the Peel they are paying twice the amount their neighbours are paying for the water, which is totally inequitable.”
The ACCC has imposed a 10 per cent cap, excluding CPI, on the increases Water NSW can levy each year on the Peel Valley in order to prevent “perverse pricing outcomes”.
“The ACCC acknowledges that high security entitlement charges and usage charges for Peel Valley customers are significantly higher than for customers in other valleys,” its most recent report stated.
“However, the charge differential reflects the higher costs of providing infrastructure services in the Peel Valley when compared with other valleys (and) the gradual movement towards full cost recovery in the Peel Valley.”
Tamworth MP Kevin Anderson said a date had been set for Mr Blair to visit the city but it had been cancelled due to “unforeseen circumstances”.
“We’re currently working on another date and we’ll have one fairly soon I would hope,” he said.
“Niall has certainly already displayed a great understanding of water issues across the state and I’m very keen to get him wrapped around this one and see what we can come up with.
“There is a way forward and I firmly believe that we need to sit down with Namoi Water and Peel Valley water users and look at the water sharing plan.”
Tamworth Regional Council has long argued for the introduction of so-called “postage stamp pricing” for water across all the state’s valleys.
However successive governments, possibly concerned at the backlash from constituents raising prices in the cheaper valleys, have shown little interest in the proposal.
Water impost – Minister looking at pricing
Aug. 9, 2015, 9 p.m.
NSW Water Minister Niall Blair says his government is “actively looking” at ways to “alleviate” the impost of sky-high water prices on residents in the Peel Valley.
Mr Blair, who replaced Barwon MP Kevin Humphries in the water portfolio after the March election, said the Baird government understood the angst locally.
High security licence holders in the Peel Valley, including Tamworth Regional Council, will pay $31.65 a megalitre for their water this financial year.
However, under the current pricing structure, water that has flowed through the Peel and into the Namoi Valley is charged at just $16.81 a megalitre.
“The government recognises the price disparity for customers in the Peel Valley in comparison to other valleys and is actively looking at options to alleviate the situation,” Mr Blair said.
“I have met with Kevin Anderson and members of Tamworth Regional Council to discuss this issue and determine potential ways forward.”
Mr Blair, a Nationals MP who sits in the parliament’s upper house, would not disclose what those “ways forward” might be.
However, veteran Tamworth councillors James Treloar said charging a consistent price across the state was the fairest solution to an “absolutely ridiculous” situation.
“The water that falls in the hills at Nundle can ultimately end up in Adelaide,” he said. “This is a classic example of why there should be a ‘post- age-stamp’ pricing system.”
Councillor Treloar said that at a bare minimum the state government must amend the water sharing plan and merge the Peel and Namoi valleys.
This is a proposal that Tamworth MP Kevin Anderson resurrected during the election campaign, although in the past it has meet with resistance from irrigators.
“The only reason we are not in the Namoi Valley to begin with is that we had some absolute idiots trying to avoid having a water sharing plan,” Cr Treloar said.
“At the very least we should be in the Namoi Valley, but the Peel, Namoi, Gwydir and Border rivers should all be lumped together and charged the same.”
Water pricing ‘grossly unfair’
Aug. 25, 2015, 10 p.m.
PEEL Valley irrigators have let the competition watchdog know in no uncertain terms the bulk water pricing structure is grossly unfair, calling it an “abomination” and “defective”.
Australian Competition and Consumer Commission (ACCC) held a public forum in Tamworth on Monday to hear from bulk water users – the largest being irrigators and Tamworth Regional Council – as part of the review of water charge rules.
Peel Valley Water Users Association president Ildu Monticone said the excessive complexity of the water pricing structure across the state was unfair and inequitable.
Regulated river prices for the Peel Valley in 2015-16 are almost $62 a megalitre, yet only $32/ML for Namoi users, $18/ML for Gwydir users and about $8/ML for those in the Murrumbidgee.
He said Peel water users paid 100 per cent of their water charges but only received 5 per cent of the water that fell on the catchment, with 45 per cent going downstream into the Namoi catchment, and 50 per cent used by the environment.
Two state government-owned entities also both levy charges for bulk water in NSW – the “double charging” system labelled as “absurd” by the association, in its submission to the forum. Eight forums were held across the state in the past few weeks, with the last held in Dubbo yesterday.
Mr Monticone said the association had long been complaining water prices in the Peel were far too high.
“The reason they’re too high is that water is charged on a valley-by-valley basis. In the Murray there are lots of megalitres and lots of users, and the costs are shared between lots of people, so the price per megalitre is very low. In the Peel, the situation is the opposite – there are very few users, and very few megalitres used, so the cost per megalitre is very high,” Mr Monticone said.
“We think that’s grossly unfair. The valley-based pricing system scheme doesn’t work.
“We’re just hoping that the ACCC may take a more serious look at the problem now.”
Also in attendance at the forum were Agriculture Minister and member for New England Barnaby Joyce, Tamworth mayor Col Murray (speaking on behalf of Namoi Councils) and member for Tamworth Kevin Anderson.
Cr Murray said Monday’s meeting was “the most encouraging one” he’d been to in six years.
“I thought the commissioner was very receptive to all the ideas that came up,” he said.
“In the past … I’ve left meetings in doubt if we’d actually been heard. But (on Monday) I left the meeting with the view that we’d absolutely been heard.”
He said the water regulation and management laws were too complex and difficult to explain.
“The whole northern part of the Basin has been discriminated against by an unfair pricing regime. It’s just such an unbelievable situation we find ourselves in,” Cr Murray said.
From The Land Newspaper
Protest for fairer Peel pricing
Sept. 1, 2015, 4 a.m.
PEEL Valley water users have taken the next step in their fight to get rid of “grossly unfair” water charges at an Australian Competition and Consumer Commission (ACCC) public forum last week.
Irrigators, council representatives and federal and state members Barnaby Joyce and Kevin Anderson met to discuss the water pricing structure, which sets water usage costs at $52.27 per megalitre, compared to $1.53 being paid by irrigators downstream in the Murrumbidgee.
The Tamworth meeting was one of two public forums held this week as part of the ACCC Review of Water Charge Rules. The second meeting was held at Dubbo on Tuesday.
Peel Valley Water Users’ Association member Ildu Monticone, “Medica Park”, Dungowan, addressed ACCC commissioner Sarah Court on behalf of the irrigators group, saying the current situation made the northern irrigators less competitive with other valleys.
“Peel prices are going up every year from what’s already a high base,” Mr Monticone said.
“The main issue we have is with the valley-based pricing structure, where each valley has to cover the costs of dam maintenance.
“We use 17,000ML in the Peel Valley compared to two million in the Murray, but because there’s only a small number of users we end up paying much more,” Mr Monticone said.
“We pay 100 per cent of the water usage charges, but between irrigators and the council together, we only use 5pc of the water – 95pc of water from the Peel River actually goes downstream.
“We think if we only get access to a small amount of water we should only be paying for 5pc.”
Association president Tom Woolaston, “Stratharlie”, Somerton, said it was the most promising water meeting he’d been to in many years of fighting for a fairer system.
He’s been one of the lucky irrigators in the past year.
While other irrigators had zero water allocation, good unregulated river flows allowed Mr Woolaston to grow at least a portion of his crop.
“We grow lucerne for hay and we’re also watering canola, durum wheat, and oats for hay,” he said.
“We usually irrigate about 200 hectares a year but we’ve grown about half that.”
Mr Woolaston is entitled to 12pc of his water allocation in the new allocations from the beginning of July, a big improvement from the 2014-15 financial year, but he still wants a “postage-stamp style” (i.e. the same) price for water across the state.
“Irrigators on the Cockburn River pay a small amount, but as soon as the same water hits the Peel River it goes up to more than $50 a megalitre and when it gets to the Namoi it gets cheaper again, all the way along to South Australia,” he said.
“A lot of the water that originates up here in the Peel is used for the environment, which means everybody should be paying for it, not just the irrigators.”
Tamworth MP Kevin Anderson used the meeting to propose a joint venture between the Peel and Namoi valleys to help achieve a more equitable system.
“We are being charged about $50/ML in the Peel Valley, yet next door in the Namoi Valley the price drops to approximately $19/ML,” Mr Anderson said.
“Ultimately there needs to be something done across the valleys in the Murray-Darling Basin.
“The current system of single issue, valley-by-valley pricing, is unfair.”
Mr Anderson also urged the NSW government to urgently prepare a new Peel Valley Water Sharing Plan, saying the current plan from 2010 was outdated and didn’t meet the current needs or future demands of regional water users.
The ACCC will provide its advice and draft rules to federal Environment Minister Greg Hunt by the end of December 2015.
Peel Valley users protest against proposed Department of Primary Industries Water plan
Nov. 16, 2015, 10 p.m.
LOCAL producers have described a contentious proposed pricing system for water as a “tax on farmers” at a heated meeting in Tamworth yesterday.
The Independent Pricing and Regulatory Tribunal (IPART) held the public meeting to get feedback on a Department of Primary Industries (DPI) Water plan to alter the way water-usage costs are calculated in NSW.
The proposal pushes for a full cost- recovery system, a move that would see water delivery charges more than double for Peel Valley users.
Farmer Shirley Patemore said the proposal unfairly singled out farmers.
“It’s a tax on farmers – we are getting charged on water we don’t use,” Ms Patemore said.
“We don’t use water (from the Peel River) all the time, we only use it when we are in drought.
“A small percentage of people are paying out the nose for the benefit of the wider community.”
Gunnedah shire farmer Tom Woolaston told the IPART panel the proposal put farmers’ water costs “up to quite unreasonable prices”.
“We really can’t afford them,” Mr Woolaston said.
“Why are we expected to pay for 100 per cent of the water in Peel, when we only use 5 per cent?”
Dungowan irrigator Ildu Monticone echoed Mr Woolaston’s concerns and said 95 per cent of the water from the Peel River flowed into the Namoi River.
“However, we pay 100 per cent of the charges, for 5 per cent of the benefit,” Mr Monticone said.
Tamworth MP Kevin Anderson said at the moment each valley paid their own price and that wouldn’t change under the proposal.
Peel Valley residents paid “ridiculous prices for bulk water”.
“We pay a very high amount for water, whereas valleys as you go down the Murray-Darling Basin pay a very small amount,” Mr Anderson said.
“In some cases we are paying 10 times the amount of other valleys.”
He’s calling for postage-stamp pricing, which means everyone in the Murray-Darling Basin would pay the same price.
“If everyone paid the same price, we would go down and (other valleys) would come up – you can see why they don’t want postage-stamp pricing,” Mr Anderson said.
Mr Anderson wants IPART to put some recommendations to DPI Water that “ease the cost of water in the Peel Valley”.
“It’s crippling our farmers, it’s crippling our ratepayers and we really do need something to change.”
Tamworth Regional Council’s water director, Bruce Logan, said the council had supported post-stamp pricing across the state for a long time.
“I think we are getting closer to council’s vision – the proposal has a blanket charge on water meters and all ground water in the inland part of the state would pay the same prices for entitlement and usage,” Mr Logan said.
“Given those two measures, it seems to suggest that post-stamp pricing is possible.
“We accept that means there will be a level of cross-subsidy from other valleys.”
IPART will consider the feedback it receives from yesterday’s meeting, along with feedback it gets from public forums in Griffith and Sydney later this month.
A draft report will be released in March next year.
The final report will be published in June, with the new prices to apply in the following month from July 1.
Tamworth irrigators to meet over water price
Dec. 29, 2015, 8 p.m.
PEEL Valley irrigators will continue their push for a change to the valley-by-valley pricing structure for water usage charges at a meeting in January.
Irrigators were among those stakeholders voicing their concerns at a recent meeting with Water and Primary Industries Minister Niall Blair in Tamworth.
Peel Valley Water Users’ Association member Ildu Monticone, of Medica Park, Dungowan, said the minister had called a meeting of stakeholders, including Peel irrigators, Tamworth Regional Council and Namoi Water, in January, which is to be chaired by NSW Land and Water Commissioner Jock Laurie.
Mr Monticone said Mr Blair would attend a second meeting at Tamworth in February.
Local irrigators, who have been pushing for more equitable spread of water prices for more than 12 years, said the excessive water costs were making them less competitive with producers in other valleys.
Peel Valley water users paid $52.27 a megalitre in water usage charges for the 2015-16 financial year, compared to just $6.40/ML in the Murray and $4.28/ML in the Murrumbidgee.
Namoi Valley irrigators paid $19.80/ML, less than half the costs of their neighbours in the Peel.
Peel water users pay fixed charges on 31,000ML, despite having access to only 6100ML under the Peel Valley Water Sharing Plan, and they’re expecting another major increase.
“We know that our prices are going to go up another 50 per cent from where they are now, because the Peel Valley is only at 66per cent recovery for the operational costs of Chaffey Dam, but Water NSW wants it to go 100per cent cost recovery during the next few years,” Mr Monticone said.
Exorbitant water costs in spotlight
Feb. 26, 2016, 9 p.m.
PEEL Valley residents have the highest water charges in the state and a high-level meeting yesterday between local irrigators and government departments sought to nut out a solution to the ongoing issue.
Farmers met with representatives from the Office of Water, Department of Primary Industries, Tamworth Regional Council and local politicians to see what could be done to reduce the cost of water in the Peel Valley, which stands at more than $58 a megalitre.
In the next valley along, Namoi Valley, the price is $21.69 per megalitre.
Tamworth MP Kevin Anderson said a number of options were put forward at the meeting, such as postage stamp pricing, government subsidies, price caps, a water sharing plan review and even a merger option between the Peel and Namoi valleys.
“I think the solution will be a combination of a number of things,” Mr Anderson said.
“This is a deeply complex issue. If there was an easy solution it would have been found by now.
Mr Anderson said there was “genuine intent” to fix the “spaghetti mess” problem.
“All of this stuff has been talked about before, now there is a real commitment to dig in and rule options in or out by having the research done,” he said.
“The goal is to lower the price. How we get there we don’t know yet, but there are options that we will continue to work on.”
Peel Valley Water Users Association president Ildu Monticone said the high water cost doesn’t just effect the Peel Valley’s irrigation industry.
“Tamworth Regional Council also pays the excessive water usage charges and passes them on to ratepayers in the region,” Mr Monticone said.
The government departments will explore the options put forward and report their findings at another meeting in about eight weeks.
TRC fighting ‘inconsistency’ in water prices
March 23, 2016, 10 p.m.
TAMWORTH Regional Council is continuing to fight the high price of raw water in the Peel Valley and will question the Independent Pricing and Regulatory Tribunal (IPART) about the “apparent inconsistency’’ of its approach to water pricing.
At a council meeting on Tuesday, councillors voted to make a formal submission to IPART about its draft determination on prices DPI Water proposes to levy for raw water for the next four years from July.
The submission will question why IPART supports one single charge for groundwater for inland areas of NSW, but does not take the same approach to Water NSW charges for raw water from dams.
The submission will also raise the concern that increased water prices will “threaten the viability of the existing irrigated farming industry”.
Council’s water director Bruce Logan said TRC wants IPART to consider the ability of irrigators and other consumers in the Peel Valley to pay any increased prices, given the already extraordinarily high Water NSW charges for the Peel Valley.
“Council is concerned further price rises in the Peel regulated system will further threaten the viability of irrigators in the valley,” Mr Logan said.
Mr Logan said it was difficult to understand the “apparent inconsistency” of set charges for entitlement and usage for groundwater throughout inland NSW, given the same approach was not considered for Water NSW.
“Council has long campaigned for postage stamp pricing for bulk raw water in NSW, however both IPART and the Australian Competition and Consumer Commission have rejected this suggestion and favoured valley-based pricing for various reasons,” he said.
“Council is now actively wondering whether these reasons are in fact genuine, when IPART seems to be supporting a postage stamp price for groundwater charges.”
TRRRA Facebook extracts:
Water Charges from Chaffey Dam
28th September 2015
The enlargement of Chaffey Dam was recorded as being ‘hailed as being critical for a viable Peel Valley irrigation industry and the long term security of Tamworth’s water supply by Tamworth’s Deputy Mayor Russell Webb’ (see Vital Step Forward in Chaffey Dam expansion) but how likely is it to be a forward step for Peel Valley Irrigators?
As recently as July 2014 The Australian Competition and Consumer Commission decided to increase Peel Valley water use charges by 10 per cent for each of the next three financial years, from the current $45.56 a megalitre to $55.13 a megalitre in 2016-17. How fair is the current water pricing?
Check out this submission
Peel Valley Water Users Association Inc.pdf
At that time 2004-2006 inclusive the Peel Valley Water Users Assoc had zero entitlement notwithstanding Chaffey Dam was quite full. And now there’s water sharing. Peel Valley irrigators have had for some years to battle against a regulatory system which does little to benefit them.
Attached is a letter dated 10 November 2010 from Peel Valley Water Users Assoc to the then Minister for Water setting out cogent reasons for being unable to offer any financial support to the Chaffey Dam augmentation. And who could argue with those reasons?
IPART Submission from Peel Valley Water Users Association
9th November 2015
The table attached as an image forms part of the Peel Valley Water Users Assoc submission to IPART showing the regulated river water prices which have been proposed by DPI Water in the Murray Darling Basin – $10.20 ML for the Peel as opposed to say the next highest charge $4.72 ML for the Namoi.
How fair is that? What’s the justification? As PVWUA say in its submission it’s ‘unfair’ and ‘inequitable’ PVWUA says the Aust Govt recognises the whole of the Murray Darling Basin as one complete water course for environmental purposes and it’s illogical for the State Govt to treat it as a lot of different basins for water charging purposes and in addition to propose such unfair pricing on one valley within the basin. Can you see the sense in that? In addition 95% of the water in the Peel flows into the Namoi while water users in the Peel have to pay 100% of the costs for just 5% of the benefits – a gross injustice which is a direct result of the ‘valley based pricing’ philosophy.
Following the completion of the Chaffey Dam augmentation the Peel Water Sharing Plan allows the environment to access 5,000 ML annually or near 82% of the entitlement available to irrigators which is an injustice in itself but, coupled with that injustice, that water is only treated as ‘environmental’ while it’s in the Peel, once it flows into the Namoi it’s freely available for access to Namoi irrigators.
We hope our local member supports our irrigators in this battle and we ask that you please get behind our irrigators and ‘like’ and ‘share’ to show your support!
|Table 1 – Prices proposed by DPI Water in the Murray-Darling Basin 2020/2021 ($ per ML) for regulated river water.|
|River/Valley||High and General Security Entitlement Charge||Usage (Water Take) Charge||Total Charge Proposed by DPI Water for regulated River Water.|
IPART Public Hearing
16th November 2015
This post is an ‘observation post’ to tell you what the writer saw and heard today at the IPART public hearing on its review of DPI’s proposed water prices for the years 2016/2017 and forward. I’ve previously posted the link to the DPI submissions. It’s a hefty document of 388 pages with many nice, coloured graphs all computer modelled. Today the emphasis was on the Northern Basin regulated rivers and its unregulated streams.
IPART chaired the hearing from the main table facing the audience. The obligatory power point presentation was done by a gentleman who remained silent. Three representatives of DPI were there. Water Users Association representatives sat at the main table.
There were a couple of people who attended who live on the Barrington River which as you all know is on the other side of the Divide.
As people who work in the irrigation industry know, there is a world of difference between computer modelling and its depiction in colour on an A4 sheet and the ultimate result of that graph, its impact on irrigation users. The former has an element of neutrality, of non- impact which is lacking in the latter. The power point presentation was all computer modelled.
The DPI say it has a $62.5M revenue requirement and is looking for a $49.4 M user share. That share the DPI says is allocated to water users based on an impactor pays principle. We were assured that the DPI is becoming more efficient so the revenue it would require would fall. The DPI indicated it has consultants and auditors and it was aiming for prudency and efficiency. It asked the audience did it agree with the DPI steps into these areas. The audience response was it could not tell until it had the details. Precise details were not available. Apparently those details are available as an annex to the IPART determination, but, as was commented by the Namoi Users I think, by that time it’s too late to comment.
There were complaints from the audience that services were promised to be delivered and had not been delivered although paid for. For example, there is no monitoring of the Peel water sharing plan. The two part tariff was not promoted. As to IPART, the question was asked who polices IPART.
As to prices and charges, the DPI indicated it intended to switch from entitlement to water take as a cost driver.
Getting back to details, the lack of available details extended into the precise details of cost recovery which as we all now know is the principle behind the DPI’s pricing strategy. The Barrington River users said their annual bill was $1,900 and they see no services for that at all. If their river gets low there is cooperation between its users, the DPI is not involved at all. Notwithstanding this lack of service, they said ‘Since IPART has become involved our costs are going over the hill. “
One of the water users associations, in relation to the cost recovery method, asked why is there a component in the pricing for a cost return on state owned assets. The DPI explained that the State likes to impose a weighted average cost of capital to get a return on it. The association asked what capital is being returned, are there details of capital expenditure. Details are not available but the audience was assured that Chaffey Dam is not in the regulated asset base. I think (I hope) this means that the Peel Valley users don’t have to pay for Chaffey’s augmentation.
It was evident from the questions from the floor that the greatest pain is being felt by beleaguered water users in the Peel Valley.
Some-one from the Peel Valley said ‘Our entitlement charge is actually 5 times higher than shown because we can only pump one fifth of our entitlement, taking only one fifth puts our prices up and we can’t afford to carry on like this. Why are we expected to pay 100% of water in the Peel when we only get to use 5% of our entitlement. The prices the DPI are quoting for the Peel are not the figures that will be paid in the Peel, we have to pay fees on the full entitlement and so we pay $18.50 effective entitlement charge. Effective entitlement is much higher and is in addition limited by the water sharing plan.’ The DPI chair said ‘We hear it.’ The Peel Valley user said ‘We feel it.’ There were sympathetic laughs from the audience. In effect that user from the Peel said ‘We pay 100% for 5%, is that fair and equitable.’
That user also commented that the Cth Water Act indicates it aims to avoid results which are ‘a perverse outcome’ and how could IPART say that what DPI were seeking and what had been sought in other years was not a perverse outcome. And ‘What’s IPART’s definition of a ‘perverse outcome.’ IPART was not prepared to answer other than to say the outcome of the costing procedure should be reflective and take into account the impact on the user as well as the provider.
Someone from the Peel asked ‘If we all handed in our irrigation licences, where would you get your money from then?’ Someone else mentioned ‘this is not cost recovery, this is cost generation.’
There was a comment from the audience that water users suffer during drought but the DPI still gets its $50M. There was a comment that water users from the Peel pay their taxes to the Federal Government, it’s unfair to put these taxes on food production.
Apologies for any errors or omissions. My admiration goes to the beleaguered Peel Valley Water Users and to the clearly distressed user from (I think he said the Bogan River) who had been issued an account for $1,700 for two successive years when there was no water in the river at all.
As I said earlier, there’ll be a transcript and I’ll be posting a link when it arrives. Please like and share this post in support of our local water users.