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

Draft decision on costs for the Border valley

Under our draft decisions, Water NSW’s costs are higher than those used to set prices for the 2017 Determination. The customer share of:

  • operating expenditure for Border valley has increased by 12.3% but is 16.1% lower than proposed by Water NSW
  • capital expenditure for Border valley has increased by 120% and is 26.8% higher than proposed by Water NSW
  • Border Rivers Commission (BRC) costs for Border valley have decreased by 5.5% and are 40% lower than proposed by Water NSW.

Offsetting these increases, the cost of capital has decreased from 3.1% to 1.3%.

Draft decision on customer share of revenue requirement for Border valley over 2021 Determination

Notes: Data has been rounded to the nearest percentage - total may not sum to 100% due to rounding. UOM is the pay-back of "unders and overs mechanism" balance from the 2014-17 regulatory period.
Data source: IPART analysis.

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

Data source: IPART analysis.

Draft decision on prices for the Border 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 draft decision on Water NSW’s prices, as well as prices that would recover Water NSW’s proposed costs on a 4 year full cost recovery (FCR) basis.

Draft decision on bulk water charges – Border valley ($/ML, $2021-22)

Current 2020-21 ($2020-21) 4 year FCR Proposed Draft Report Change current to proposed Change current to Draft Report Draft Report to proposed
Bulk water charges excluding BRC costs ($/ML)
High security $5.74 $7.47 $6.42 30.1% 11.8% -14.1%
General security $2.13 $2.74 $2.35 28.6% 10.3% -14.2%
Usage $5.86 $7.56 $6.48 29.0% 10.6% -14.3%
Bulk water BRC charges ($/ML)
High security entitlement $4.97 $8.60 $4.90 73.0% -1.4% -43.0%
General security entitlement $1.85 $3.15 $1.79 70.3% -3.2% -43.2%
Usage $0.84 $1.45 $0.82 72.6% -2.4% -43.4%
Bulk water charges including BRC costs ($/ML)
High security entitlement $10.71 $16.07 $11.32 50.0% 5.7% -29.6%
General security entitlement $3.98 $5.89 $4.14 48.0% 4.0% -29.7%
Usage $6.70 $9.01 $7.30 34.5% 9.0% -19.0%

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 draft decisions for the Border valley

The table below shows indicative bills for 2021-22 under our draft 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 BRC costs for Border valley ($2021-22)

Estimated entitlements (ML) Estimated usage (% of entitlement) Current 2020-21 ($2020-21) 4 year FCR Proposed Draft Report Change current to proposed Change current to Draft Report Draft Report to proposed
High Security
Small user 10 90% $167 $242 $179 44.4% 6.9% -26.0%
Medium user 75 90% $1,256 $1,813 $1,342 44.4% 6.9% -26.0%
Large user 300 90% $5,022 $7,254 $5,367 44.4% 6.9% -26.0%
General Security
Small user 15 50% $110 $156 $117 41.8% 6.3% -25.1%
Medium user 100 50% $733 $1,040 $779 41.8% 6.3% -25.1%
Large user 2,000 50% $14,660 $20,790 $15,580 41.8% 6.3% -25.1%

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 Border valley (medium user)

Note: We used actual entitlement numbers and allocations data in defining “small", "medium" and "large" users. We note this differs to the approach we used for our Issues Paper valley-specific information. See our WAMC Draft Report for further information on WAMC bills.
Data source: Water NSW proposal and IPART analysis.

General security bills for Border valley (medium user)

Note: We used actual entitlement numbers and allocations data in defining “small", "medium" and "large" users. We note this differs to the approach we used for our Issues Paper valley-specific information. See our WAMC Draft Report 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