The changes, set to take effect from July 1, aim to simplify pricing while addressing long-standing concerns about fairness across the company’s customer base.
Under the new structure, fixed fees linked to delivery entitlements (DEs) will be removed, while variable water delivery fees will increase based on actual usage.
Outlet fees will also be recalibrated to align with cost recovery.
According to MIL, the revised model is expected to reduce or maintain average costs for around 80 per cent of customers.
The new structure will also be subject to annual indexation in line with the CPI.
The decision follows a comprehensive review process that included independent financial modelling, long-term budget analysis across multiple scenarios, and extensive customer consultation.
While the Board acknowledged the changes introduce a higher level of financial risk - particularly due to increased reliance on variable revenue - it determined that these risks are manageable and outweighed by the need to address inequities in the current system.
“While we acknowledge there is increased risk to the company, the board considered the need to address the inequity in the current fee structure as materially important to the future of the business,” the company stated in a board update.
“The board considered extensive independent expert advice and thorough multi-year budgeting based on a variety of scenarios before making its decision, including a review of risks raised internally and through the customer engagement process.
“The board is confident the company will be able to manage all the risks raised, including the expected income variability resulting from this change on behalf of customers, by using ‘off setting’ revenue from the commercial sale of water.
“The revenue generated as variable fee revenue is normally counter-cyclical to the revenue generated by water sales. Managed carefully, these two revenue streams will operate to smooth the revenue variability being taken on by the company for customers.
“This has been tested, based on modelling past water volumes and water prices.”
As part of the transition, Murray Irrigation will implement temporary moratoria on the termination and transfer of DEs through to mid-2027 to “give customers comfort and to allow the board to carefully consider the management of DEs moving forward”.
Customer feedback played a central role in shaping the board’s decision.
An engagement program conducted between March 23 and April 17 included direct mail communications, online resources, a fee calculator, nine in-person meetings, three webinars, hundreds of customer calls and an online survey.
Survey results showed 55 per cent of respondents supported the proposal, with 16 per cent neutral and 29 per cent opposed.
Additionally, 64 per cent of participants believed the changes would improve fairness, while most indicated the new structure would not significantly alter their water use.
MIL management will now review and update policies ready for the July 1 start date, with further information to be shared with customers and shareholders as it progresses.
The first invoices reflecting the changes will be issued in October 2026.
The board has committed to formally reviewing the new fee structure in May 2028 while continuing ongoing monitoring.
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