ACCC identifies breach of Water Charge (Termination Fees) Rules 2009

10 December 2013

The Australian Competition and Consumer Commission (ACCC) reminds water infrastructure operators of the need to take due care in fulfilling their obligations under the Commonwealth water rules (water rules). 

The ACCC’s detection of a breach of the Water Charge (Termination Fees) Rules 2009 (WCTFR) by Pomona Private Irrigation Trust (Pomona Water) is one recent example of a failure by a small operator to meet its obligations under the water rules. Pomona Water is a member owned private irrigation trust located 15 kilometres north of Wentworth in NSW. With 39 members, it is one of the smallest private irrigation trusts in NSW. 

Pomona Water overcharged two customers in 2012 by incorrectly calculating the applicable termination fee.

Under the WCTFR, the maximum termination fee that operators can charge must not exceed 10 times the total network access charge applicable in respect of the financial year in which written notice of termination is given.  The ACCC considers that this approach facilitates a well-functioning water market by balancing the interests of irrigators who are exiting an irrigation district and irrigators that wish to remain.    

Pomona Water has since given refunds to the two customers and amended its termination fee practices.

“The ACCC is committed to ensuring all water suppliers, their customers and advisors understand the operation of the water rules,” ACCC Chairman Rod Sims said.  

“As a result of our liaison with industry, it appears that most operators take their obligations under the water rules seriously and have a positive attitude towards achieving an effective compliance culture.”

“The water rules have been effective for over four years and it is important that operators do not become complacent about compliance and continue to review their business practices to ensure that they do not inadvertently contravene the water rules.”

The ACCC has a variety of enforcement options available under the Water Act, including enforceable undertakings and infringement notices. The ACCC will consider the full range of options when determining the appropriate enforcement response.   

In considering its response to Pomona Water’s breach of the water rules, the ACCC noted that no further enforcement action was taken as a result of mitigating factors in this matter, including Pomona Water’s co-operation in the investigation, promptness in rectifying its actions (by issuing refunds) and its size and resource limitations. In the past, the ACCC has taken stronger enforcement action against operators after taking into account the surrounding circumstances of the case.

Guidance material on the water rules, including technical guides and issue-specific guidelines, are also available.

The ACCC is due to release its fourth annual Water Monitoring Report in 2014. See copies of previous year’s reports.

Comments on any of these publications or inquiries about the water rules can be directed to the ACCC by email to water@accc.gov.au or by calling the ACCC’s Infocentre on 1300 302 502.

Release number: 
286/13
ACCC Infocentre: 

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Media enquiries: 
Media team - 1300 138 917

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