02 Jul 2024 Rain kept water availability high across the Murray Darling Basin Wet conditions across the Murray Darling Basin in 2022 23 kept water availability high, while[...]

Wet conditions across the Murray-Darling Basin in 2022-23 kept water availability high, while regulated water charges varied substantially, reflecting the different tariff structures and approaches to cost recovery taken by each Basin State, the ACCC's annual water monitoring report shows.

The ACCC monitors regulated water charges levied by monopoly infrastructure providers in the Murray-Darling Basin as well as the 'transformation' arrangements that allow irrigators to convert an irrigation right into a standalone water access entitlement.

The Report noted irrigators transformed small volumes of irrigation rights in 2022-23. Across the Basin, the water delivery rights traded or terminated was also a very small proportion of the rights on issue reported to the ACCC.

"It is important stakeholders are kept informed of changes in regulated water charges and market arrangements in the Basin," ACCC Deputy Chair Mick Keogh said.

Another key focus for the ACCC is monitoring compliance with the water rules by the infrastructure operators that provide water delivery services in the Basin. In most cases, these infrastructure operators have an effective monopoly because they operate in geographically exclusive areas.

"The ACCC monitors infrastructure operators' compliance with the Water Act to ensure their activities do not unnecessarily restrict transformation of irrigation rights, the trading of the resulting water access entitlements, or impose unreasonable costs on water users."

The ACCC received three complaints and nine enquiries about water-related matters in 2022-23.

"This continued decline in water complaints to the ACCC since 2018-19 shows most infrastructure operators have a good understanding of the water rules and work within them," Mr Keogh said.

Part of the ACCC analysis includes preparation of 'hypothetical bills' that estimate the irrigators' annual charges for different water entitlement and the delivery scenarios from on-river (bulk) operators and irrigation infrastructure operators.

"Transparency assists water users to understand the charges they are paying, the water markets to work efficiently and the policy makers to assess the impact of reforms to the regulatory framework," Mr Keogh said.

The report is structured by state and highlights that regulated water charges differ substantially between different Basin states, and that state government policies have a significant impact on 'on-river' typical bills.

Queensland

Hypothetical on-river bills for Sunwater's irrigation customers for 2022-23 were between 0.2% to7% higher than in 2021-22.

As in 2021-22, the Queensland Government applied a 15% discount to the recommended charges in 2022-23. The Queensland Government also continued to provide horticulturalists with an additional 35% discount in 2022-23.

"The Queensland Government discounts and rebates for irrigators substantially reduced the charges paid to Sunwater by irrigators, especially horticulturalists," Mr Keogh said.

New South Wales

Hypothetical on-river bills in New South Wales rose by an average of 11-12%.

After a substantial rise of an average of 59% for hypothetical on-river bills for general security water access entitlements in 2021-22, there were more moderate rises in 2022-23.

In Victoria, charges levied by Goulburn-Murray Water and Lower Murray Water have risen by less than inflation since 2019-20, meaning they have fallen in real terms.

"Water storage levels were high in Victoria in 2022-23 and substantial rainfall kept demand for irrigation water down," Mr Keogh said.

South Australia

Similarly, in South Australia, typical bills for private diverters and Central Irrigation Trust and Renmark Irrigation Trust customers fell in real terms.

The charges that SA Water levies on its transportation customers are higher than any other regulated water charges monitored by the ACCC, reflecting the higher cost of service.

Trading water: transformations and terminations

Across the Basin, the water delivery rights transformed or terminated was a very small proportion of the rights on issue reported to the ACCC in 2022-23.

Exceptional flooding was experienced during the 2022-23 water year due to above average rainfall across much of the Basin. Rainfall was the highest on record for the three months of August to October for large parts of the Basin in New South Wales, Victoria and Queensland.

The volume of water flowing into the River Murray system in November and December 2022 was the largest recorded in 127 years.

The volume of water delivered by irrigation infrastructure operators decreased by 10% from 2021-22.

"The wet conditions contributed to decreases in volumes of water delivered," Mr Keogh said.

In 2023, the Australian Government ran a tender to purchase 44.3 gigalitres per year, to be allocated to environmental uses. This could increase transformation and termination volumes in 2023-24 and if further buybacks are undertaken in future years.

Background:

The Water Act 2007 (the Water Act) provides the frameworks and institutions to ensure that the water resources of the Murray Darling Basin are managed in the national interest.

The ACCC has several roles under the Water Act that include monitoring regulated water charges (including termination fees), transformations, and compliance with the Water Market Rules and Water Charge Rules (the Rules) under sections 94 and 99 of the Water Act. To provide greater context the ACCC also monitors the water allocation trades processed by off-river infrastructure operators, and total transformation processing times.

An infrastructure operator is an entity that owns or operates infrastructure for the storage, delivery or drainage of water for the purposes of providing a service to someone who does not own or operate the infrastructure. Some infrastructure operators store and deliver water on-river. These operators include WaterNSW, Sunwater and the Department of Regional Development, Manufacturing and Water (DRDMW) in Queensland, and Goulburn-Murray Water (GMW) in Victoria. They are referred to as either bulk water operators or on-river operators.

An off-river infrastructure operator provides services such as the storage, delivery and/or drainage of water diverted from a natural watercourse through a network consisting of off-river channels to another operator.

An on-river infrastructure operator harvests and stores water through infrastructure such as dams, lakes, weirs and reservoirs located primarily on a natural watercourse, and delivers water, primarily through natural watercourses.

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