Below we present key information from Water NSW’s pricing proposal for customers in the Peel valley. This information is not exhaustive and should be viewed in conjunction with our Issues Paper.

Proposed costs for the Peel valley

The operating costs proposed by Water NSW are higher than we used to set prices in the 2017 Determination. The proposed customer share of operating expenditure for Peel valley has increased by 49%.

This increase is offset by decreases in:

  • proposed customer share of capital expenditure for Peel valley, which has decreased by 11%
  • proposed cost of capital, which has decreased from 3.1% to 1.7%.

Proposed customer share of revenue requirement for Peel valley over 2021 Determination

Data source: Water NSW proposal and IPART analysis

What is driving the change in costs in the Peel valley since 2017?

Data source: Water NSW proposal and IPART analysis

Proposed prices for the Peel valley

Water NSW has proposed prices that recover the revenue required for 2020-21 (indexed by 1%), using updated entitlement and usage forecasts, instead of basing them on its proposed costs from 2021-22. Water NSW’s proposed prices under-recover its proposed 2021-22 costs by around 26% for the Peel valley.

Under the Australian Competition and Consumer Commission (ACCC) rules, we are required to set prices for Water NSW that recover its full efficient costs of providing its bulk water services (net of any government contributions). Given the cost increases proposed by Water NSW, prices must increase by more than proposed by Water NSW to achieve Full Cost Recovery (FCR).

The table below sets out Water NSW’s proposed prices, as well the indicative prices that would recover Water NSW’s proposed costs over both a 1 and 4 year FCR basis.

Bulk water charges – Peel valley ($/ML, $2020-21)

Current 2020-21

Proposed 2021-22

1 year FCR 2021-22

4 year FCR 2021-22

Change current to proposed

Change current to 1 year FCR

Change current to 4 year FCR

Bulk water charges ($/ML)

High security

$44.77

$45.77

$61.75

$62.82

2.2%

37.9%

40.3%

General security

$4.33

$4.34

$5.85

$5.95

0.2%

35.1%

37.4%

Usage

$19.78

$18.20

$24.55

$24.97

-8.0%

24.1%

26.2%

Source: Water NSW proposal and IPART analysis.

Proposed bills for the Peel valley

The table below shows Water NSW’s proposed bills for 2021-22, as well as the indicative bills arising from FCR prices under its cost proposal over 1 and 4 years.

Proposed bulk water bills for Peel valley ($2020-21)

Current 2020-21

Proposed 2021-22

1 year FCR 2021-22

4 year FCR 2021-22

Change current to proposed

Change current to 1 year FCR

Change current to 4 year FCR

High Security

Small user – 100ML @ 100%

$6,455

$6,397

$8,630

$8,779

-0.9%

33.7%

36.0%

Medium user – 500ML @ 100%

$32,275

$31,985

$43,150

$43,895

-0.9%

33.7%

36.0%

Large user – 1,000ML @ 100%

$64,550

$63,970

$86,300

$87,790

-0.9%

33.7%

36.0%

General Security

Small user – 100ML @ 60%

$1,620

$1,526

$2,058

$2,093

-5.8%

27.1%

29.2%

Medium user – 500ML @ 60%

$8,099

$7,630

$10,290

$10,466

-5.8%

27.1%

29.2%

Large user – 1,000ML @ 60%

$16,198

$15,260

$20,580

$20,932

-5.8%

27.1%

29.2%

Source: Water NSW proposal and IPART analysis.

The indicative bills shown below represent indicative bills combining Water NSW’s proposed prices for its bulk water services and the Water Administration Ministerial Corporation’s (WAMC’s) proposed prices for its water management services.

High security bills for Peel valley (medium user)

Note: See our WAMC Issues Paper for further information on WAMC bills.
Data source: Water NSW proposal and IPART analysis

General security bills for Peel valley (medium user)

Note: See our WAMC Issues Paper for further information on WAMC bills.
Data source: Water NSW proposal and IPART analysis

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