Below we present key information on our decisions for Water NSW’s rural bulk water services for customers in the Murrumbidgee valley. This information is not exhaustive and should be viewed in conjunction with our Final Report and Determination. 

Prices for Murrumbidgee valley will increase from 1 October 2021 

Under our decisions, Water NSW’s prices will increase as its efficient costs are higher than those used to set prices for the 2017 Determination. The key drivers of these increased costs include that the customer share of: 

  • operating expenditure for Murrumbidgee valley has increased by 30.9% (but by 6.3% less than proposed by Water NSW), mainly due to increased expenditure on asset management planning, long term transformational strategy, flood operations and dam safety compliance. 
  • capital expenditure for Murrumbidgee valley has decreased by 14.4% (and by 14.6% less than proposed by Water NSW), mainly due to increased expenditure on dam safety compliance, internal corporate projects and environmental planning & protection. 
  • Murray Darling Basin Authority (MDBA) costs for Murrumbidgee valley have increased by 1.2% but are 36.2% lower than proposed by Water NSW. 

Forecast usage volumes are also 11.8% lower than those used for the 2017 Determination, which puts upward pressure on prices.

Offsetting these factors are a lower cost of capital, which has decreased from 3.1% to 1.8%.

Decision on customer share of revenue requirement for Murrumbidgee valley over 2021 Determination

Note: UOM is the payback of "unders and overs mechanism" balance from the 2014-17 regulatory period.

Data source: IPART analysis.    

What drives the change in costs for Murrumbidgee valley since the 2017 determination period?

Data source: IPART analysis.

Decision on prices for the Murrumbidgee valley

Under the 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). 

The table below sets out our decision on Water NSW’s prices, as well as prices that would recover Water NSW’s proposed costs on a full cost recovery (FCR) basis over the 2021 determination period.

Decision on bulk water charges – Murrumbidgee valley ($/ML, $2021-22)

  2020-21 ($2020-21) FCR proposed IPART decision Change 2020-21 to proposed Change 2020-21 to decision Difference between proposed and decision
Bulk water charges excluding MDBA costs ($/ML)
High security $3.18 $4.16 $4.17 30.8% 31.1% 0.2%
General security $1.19 $1.43 $1.43 20.2% 20.2% 0.0%
Usage $3.57 $4.77 $4.97 33.6% 39.2% 4.2%
Bulk water MDBA charges ($/ML)
High security entitlement $1.73 $2.74 $1.86 58.4% 7.5% -32.1%
General security entitlement $0.65 $0.94 $0.64 44.6% -1.5% -31.9%
Usage $0.33 $0.52 $0.37 57.6% 12.1% -28.8%
Bulk water charges including MDBA costs ($/ML)
High security entitlement $4.91 $6.90 $6.03 40.5% 22.8% -12.6%
General security entitlement $1.84 $2.37 $2.07 28.8% 12.5% -12.7%
Usage $3.90 $5.29 $5.34 35.6% 36.9% 0.9%

Note: Water NSW’s proposed prices are based on prices that recover Water NSW’s proposed costs over a 4-year period on a full cost recovery basis.

Source: Water NSW proposal and IPART analysis.

Indicative bills under our decisions for the Murrumbidgee valley

The table below shows indicative bills under our decisions, as well as indicative bills that would arise from Water NSW’s proposed prices (based on full cost recovery over 4-years).

Indicative annual bulk water bills including MDBA costs for Murrumbidgee valley ($2021-22)

  Estimated entitlements (ML) Estimated usage (% of entitlement) 2020-21 ($2020-21) FCR proposed IPART decision Change 2020-21 to proposed Change 2020-21 to decision Difference between proposed and decision
High Security
Small user 5 90% $42 $58 $54 38.5% 28.7% -7.1%
Medium user 100 90% $842 $1,166 $1,084 38.5% 28.7% -7.1%
Large user 2,000 90% $16,840 $23,322 $21,672 38.5% 28.7% -7.1%
General Security
Small user 10 40% $34 $45 $42 31.9% 23.7% -6.2%
Medium user 150 40% $510 $673 $631 31.9% 23.7% -6.2%
Large user 2,000 40% $6,800 $8,972 $8,412 31.9% 23.7% -6.2%

Source: Water NSW proposal and IPART analysis.

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

High security bills for Murrumbidgee valley (medium user)

Note: We used actual entitlement numbers and allocations data in defining “small", "medium" and "large" users. See our WAMC Final Report (hyperlink) for further information on WAMC bills.

Data source: Water NSW proposal and IPART analysis.

General security bills for Murrumbidgee valley (medium user)

Note: We used actual entitlement numbers and allocations data in defining “small", "medium" and "large" users. See our WAMC Final Report (hyperlink) for further information on WAMC bills.

Data source: Water NSW proposal and IPART analysis.

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Water NSW’s proposed costs, prices and indicative bills as presented in our Issues Paper released in September 2020 

Our Draft Report on Water NSW’s rural bulk water prices released in March 2021