Murray Irrigation, Murrumbidgee Irrigation and Coleambally Irrigation were all involved in the discussions on the review currently being undertaken by IPART into water price increases proposed by WaterNSW and the Water Administration Ministerial Corporation (WAMC).
“The conversation was positive, with Mr Nicholls indicating that IPART is still working through the enormous amount of material received in more than 200 submissions, as well as information provided by the relevant statutory bodies,” the company said.
“While IPART acknowledges the significance of the price rise that is being proposed, both in terms of percentages and actual dollars, it has not yet formed a preliminary view on the merits of the proposition.
“Murray Irrigation will continue to keep shareholders and customers updated with any new information regarding this matter as it comes to hand.”
A 184 per cent increase has been proposed by WaterNSW for the NSW Murray Valley.
If approved, it would push the licence cost for a farmer with 500 megalitres from less than $6000 a year, to nearly $17,000, at a cost of more than $23 million across the NSW Murray.
The increases are intended to cover the cost of running Water NSW.
In its submission to IPART, Murray Irrigation said it was “very concerned about the significant increase of proposed water charges and emerging volume of government regulation that appears to be the underlying drivers (or excuses) for these price increases”.
“These are not services sought by our customers, and future fee increases should not be any greater than CPI of current prices,” the submission continues.
“Any difference above this should be funded by government, with financial incentive schemes in place to reign in exorbitant expenditure from fee charging agencies.
“We encourage IPART to adopt an interim one year determination (of current fees plus CPI) to enable more time to better understand the cost drivers of fee charging agencies, the activities our organisation undertakes that duplicate some of these services and to develop the most cost-efficient charges before being imposed on our customers.
“IPART faces an immense task in balancing the competing objectives of affordability, sustainability, and fairness in WaterNSW’s pricing proposal – this balancing should have been undertaken by WaterNSW over many years.”
MIL said WaterNSW has proposed “exorbitant price increases”, but left it up to the regulator to determine the fairest and best level of increases.
“While WaterNSW and WAMC have together proposed a near tripling of Murray Valley prices, their own customer feedback has indicated that such increases are neither desired nor supported,” the company’ submission states.
“Furthermore, the independent Deloitte review (despite our perceptions of its shortcomings) concluded that rural customers could not afford these proposed increases.
“Rather than addressing these findings and acting on the learnings of years of engagement with its customers, WaterNSW has instead deferred its responsibility for determining the appropriate trade-offs to IPART, leaving the Tribunal with a short time to address these critical issues.”
The company says implementing a one-year interim determination for rural valley prices, with prices held at CPI, would compel WaterNSW to “focus on delivering real customer value and ensure that its next submission appropriately reflects the priorities and financial realities of rural communities”.
“This would ensure IPART is able to undertake a detailed review of rural valley prices as a standalone activity (rather than at the same time as several other major reviews) and reinforce the importance of meaningful customer engagement and accountability in future WaterNSW and WAMC regulatory processes,” MIL said.
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