Issues paper - IPART is reviewing prices for WAMC and WaterNSW - 1 November 2024

IPART sets the maximum prices that WAMC can charge its customers for to provide water planning, management and regulation services. These apply to around 40,000 water access licence holders in regional and rural NSW.

We also set the maximum prices that WaterNSW can charge for rural bulk water services such as the storage and delivery of water. This applies to around 13,000 licence holders who also pay WAMC charges. 

The prices we set in these reviews will apply from 1 July 2025 for 5 years.

How will we review the prices

Customers should pay only what water businesses require to efficiently deliver the services their customers need. Our aim is to hold water businesses accountable in a way that delivers good short, medium, and long-term customer outcomes. 

We have a robust and comprehensive framework to assist us in considering these matters. Our framework focuses on customers, costs, and credibility – which we refer to as the ‘3Cs’. It is underpinned by 12 guiding principles which both IPART and water businesses use to develop and assess pricing proposals. Our Handbook provides further information on our 3Cs framework.

What has WAMC proposed?

• WAMC has proposed bills increase by between 2.5% and 28% a year. 
• It proposed to cap increases in water management charges at either 2.5% (for customers on the minimum annual charge) or 15% for all other customers. It also proposed that the Murray–Darling Basin Authority (MDBA) and the Dumaresq–Barwon Border Rivers Commission (BRC) charges would increase to reflect full cost recovery. 
• It has proposed changes to non-urban metering charges, new and increased charges for consent transactions, new prices for floodplain harvesting, and changes to prices for Murray–Darling Basin Authority and the Dumaresq-Barwon Border Rivers Commission water management services.
• WAMC has proposed the NSW Government pay a larger subsidy than it currently is to avoid price shocks. This is to maintain the proposed 2.5% and 15% caps on price increases and allow WAMC the revenue it proposes it needs to deliver its services. 
• WAMC stated it consulted with its stakeholders over several stages in developing its proposal. 
• It proposed a 98% increase in operating expenditure compared to that allowed in our previous pricing determination. WAMC stated that costs are primarily operational costs and that the drivers of this are an increased level of water management activities including the replacement of statutory water plans, digital improvements, addressing precious under-recovery and increasing the NSW Government’s share of costs (separate to any subsidy).
• It has also proposed a 125% increase in capital expenditure.
• WAMC has proposed a minor change to cost sharing arrangements, to slightly increase the NSW Government’s share of costs. 

What has WaterNSW proposed for its rural water customers?

• WaterNSW has proposed bills increase by between 0% and 37% a year. Bill impacts would vary across rural valleys. Our Information Paper sets out all prices and bill impacts for each valley.
• It proposed that IPART implement a ‘revenue cap’ so prices would adjust each year depending on forecast demand to allow it to meet its annual revenue allowance. It also proposed to increase the fixed portion of some prices. It indicated there is customer support for both of these changes. 
• WaterNSW developed 6 outcomes to guide its service delivery – relating to affordability, secure and reliable water, transparency, sustainable water and land management, customer and community access to data and information and customer experiences. It proposes to develop a scorecard to measure its progress.
• WaterNSW has proposed a 43% increase in operating expenditure, stating this is driven by a change in operating model, compliance with existing and new obligations, and inflation.
• It has proposed 21% more capital expenditure than in the current determination period. Key projects include Fishways Program ($100.8 million), Cold Water Pollution Program ($46.8 million), Oberon to Duckmaloi Pipeline Renewals ($29.2 million) and digital technology ($54.4 million).