The Independent Pricing and Regulatory Tribunal last week said it would not support suggested increases proposed for WaterNSW’s bulk water services.
In releasing an information paper related to the proposal on Wednesday, IPART said it was “not convinced at this stage that the full increases proposed by WaterNSW are sufficiently well justified”.
It says additional information, consultation and analysis are required.
WaterNSW has sought to increase its revenue by 43 per cent over the next five years, including a 38 per cent increase for Greater Sydney and 53 per cent for regional and rural NSW.
In the NSW Murray Valley, where the increase after five years was to be 184 per cent, it would have pushed 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.
IPART agreed the WaterNSW proposal would “lead to price increases above what customers have told WaterNSW they can afford”.
But it said with current pricing determination for WaterNSW’s regional and rural services expiring on June 30, there was no time for an extension to allow more time for assessment of WaterNSW’s proposed increases.
IPART chair Carmel Donnelly said the tribunal instead proposes to set shorter-term prices that could be in place for up to three years for both Greater Sydney and rural valleys.
“While these prices are in place, IPART will continue further review of WaterNSW’s proposed prices for bulk water services in Greater Sydney and regional and rural New South Wales to inform future pricing decisions,” she said.
IPART proposes shorter-term draft prices for WaterNSW’s regional and rural customers increase by 1.9 per cent plus inflation from July 1, 2025 and then by inflation only on July 1 in 2026 and 2027.
Murray Irrigation Limited, which is preparing a response to the information paper, said based on significant inflation in the past 12 months, this would equate to an increase of about five per cent to seven per cent in prices this year, compared to the originally proposed tripling over five years.
For WaterNSW Greater Sydney, where Sydney Water is the main customer, draft maximum bulk water prices would increase by 6.9 per cent plus inflation from October 1, 2025, and then by inflation on July 1 in 2026 and 2027.
The shorter-term draft prices could be in place until June 2028 but may be replaced earlier if ongoing work by WaterNSW and IPART enables new price determinations earlier.
IPART is undertaking financial analysis to ensure the draft shorter-term prices will enable WaterNSW to meet its obligations.
Any new determinations would be made only after IPART issues a draft report, seeks and considers submissions and holds a public hearing.
Southern Riverina Irrigators chef executive Sophie Baldwin said that while the potential replacement of prices was a concern, this interim announcement was a “win for common sense”.
Ms Baldwin said SRI had attended countless meetings and written submissions opposing the proposed increase which, if implemented, would have meant irrigators would be paying more than $40 in government charges for every single megalitre used on-farm. Currently that figure is about $15.
“Farming and irrigators groups right across NSW came together and vehemently opposed the increase, along with Independent Member for Murray Helen Dalton who took the issue up with Premier Chris Minns.
“It’s a short-term win and shows if we come together and keep fighting we can restore some balance.
“Next on the agenda is to get newly elected Federal Water Minister Murray Watt to visit the region and show him how important we are in terms of staple food production and economic generation for the nation.”
The information paper on WaterNSW’s pricing proposal is available on the IPART website, with community feedback open until June 3. After all feedback is considered, IPART will release its shorter-term pricing decisions in June.
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