Lower bulk water charges for NSW irrigators

5 March 2014

The ACCC today released its Draft Decision on pricing for bulk water supplied by State Water Corporation in the New South Wales Murray-Darling Basin in the 2014-17 period.

The Draft Decision results in lower water bills for most of State Water’s customers. Relative to previous years, price increases are modest overall. In most valleys, bills for general security entitlement holders are falling. The tables attached compare bills payable under the ACCC’s Draft Decision with current bills.

One of State Water’s proposals was to increase fixed charges to an 80/20 fixed/variable ratio as a way of managing its revenue volatility. This would result in 80 per cent of a customer’s water bill being fixed regardless of the level of water usage. The ACCC has rejected this proposal and has retained the current 40/60 fixed/variable charges ratio.

“At the moment, 60 per cent of State Water’s revenue comes from usage charges. When rainfall is low and water usage falls, State Water’s revenue also falls. The ACCC recognises the challenges faced by State Water in dealing with this revenue volatility,” ACCC Chairman Rod Sims said.

“At the same time, the ACCC considers that irrigators are poorly placed to pay high fixed charges when their incomes have been impacted by drought. This is one of the reasons the ACCC rejected higher fixed charges. However, the ACCC has introduced a new approach to determining charges that allows State Water to recover its revenue over time while smoothing price fluctuations for irrigators,” Mr Sims said.

The ACCC invites interested parties to provide written submissions on the Draft Decision at

StateWater.Submissions@accc.gov.au

by close of business 17 April 2014. The ACCC will make its final decision in June 2014.

See: State Water's Regulated Charges 2014-17 review.

EDIT: A previous version of this media release was issued with an incorrect email address for submission. The ACCC apologies for error.

Bill analysis for High Security Entitlement Holders based on prices excluding MDBA and BRC costs

Valley

2013-14 current bill

2014-15 ACCC Draft Decision bill

Per cent change

Border

$6,727

$6,517

-3%

Gwydir

$13,608

$12,864

-5%

Namoi

$17,877

$18,841

5%

Peel

$33,249

$36,570

10%

Lachlan

$13,622

$14,072

3%

Macquarie

$12,625

$13,768

9%

Murray

$2,134

$2,115

-1%

Murrumbidgee

$2,952

$3,046

3%

Bill analysis for General Security Entitlement Holders based on prices excluding MDBA and BRC costs

Valley

2013-14 current bill

2014-15 ACCC Draft Decision bill

Per cent change

Border

$2,345

$2,500

7%

Gwydir

$4,862

$4,374

-10%

Namoi

$10,224

$9,959

-3%

Peel

$15,493

$17,040

10%

Lachlan

$6,734

$6,236

-7%

Macquarie

$5,651

$5,491

-3%

Murray

$1,540

$1,374

-11%

Murrumbidgee

$1,860

$1,775

-5%

Lowbidgee

-

$1,524

-

*Note:  The analysis assumes a 500 ML water entitlement for customers and a 20 year average allocation for each valley. Calculations do not include the pass-through of Murray-Darling Basin Authority and Border Rivers Commission costs in 2013-14 and 2014-15.

Release number: 
MR 039/14
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media Team - 1300 138 917, media@accc.gov.au

Tags

Audience
Topics