Below we present key information on our draft decisions for Water NSW’s rural bulk water services for customers in the South Coast 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 South Coast 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 South Coast valley has increased by 23% but is 16.1% lower than proposed by Water NSW
  • capital expenditure for South Coast valley has decreased by 18.8% but is 15.2% higher than proposed by Water NSW.

The cost of capital has also decreased from 4.7% to 2.8%.

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

Note: 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 South Coast valley since the 2017 determination period?

Data source: IPART analysis.

Draft decision on prices for the South Coast valley

Whilst we aim to set prices that fully recover the customer share of efficient costs, in setting the 2017 Determination it was recognised that Full Cost Recovery (FCR) was likely to be unattainable in the South Coast valley over the 2017 Determination and going forward. For the 2021 Determination period, we have decided to keep prices constant in real terms for the South Coast valley. This will recover about 33% of the customer share of efficient costs. The table below sets out our draft decision on Water NSW’s prices, as well as Water NSW’s proposed prices.

Draft decision on bulk water charges – South Coast 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
High security $33.19 $34.02 $34.03 2.5% 2.5% 0.0%
General security $17.41 $17.85 $17.85 2.5% 2.5% 0.0%
Usage $18.60 $19.07 $19.07 2.5% 2.5% 0.0%

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 South Coast 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.

Indicative annual bulk water bills for South Coast 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 5 100% $259 $265 $266 2.5% 2.5% 0.0%
Medium user 10 100% $518 $531 $531 2.5% 2.5% 0.0%
Large user 30 100% $1,554 $1,593 $1,593 2.5% 2.5% 0.0%
General Security
Small user 15 25% $331 $339 $339 2.5% 2.5% 0.0%
Medium user 90 25% $1,985 $2,036 $2,036 2.5% 2.5% 0.0%
Large user 500 25% $11,030 $11,309 $11,309 2.5% 2.5% 0.0%

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 South Coast 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 South Coast 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