Below we present key information on our decisions for Water NSW’s rural bulk water services for customers in the Namoi valley. This information is not exhaustive and should be viewed in conjunction with our Final Report and Determination.
Prices for Namoi 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 Namoi valley has increased by 31% (but by 11% 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 Namoi valley has increased by 58.5% (but by 19.6% less than proposed by Water NSW), mainly due to increased expenditure on environmental planning & protection, dam safety compliance and asset management planning.
Forecast usage volumes are also 16.1% 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 Namoi 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 Namoi valley since the 2017 determination period?
Data source: IPART analysis.
Decision on prices for the Namoi 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 – Namoi 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 | |
| High security | $18.40 | $29.76 | $28.93 | 61.7% | 57.2% | -2.8% |
| General security | $8.58 | $10.38 | $10.10 | 21.0% | 17.7% | -2.7% |
| Usage | $21.52 | $29.23 | $30.88 | 35.8% | 43.5% | 5.6% |
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 Namoi 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 for Namoi 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 | 15 | 60% | $470 | $709 | $712 | 51.1% | 51.6% | 0.3% |
| Medium user | 30 | 60% | $939 | $1,419 | $1,424 | 51.1% | 51.6% | 0.3% |
| Large user | 100 | 60% | $3,131 | $4,730 | $4,746 | 51.1% | 51.6% | 0.3% |
| General Security | ||||||||
| Small user | 20 | 50% | $387 | $500 | $511 | 29.2% | 32.1% | 2.2% |
| Medium user | 500 | 50% | $9,670 | $12,498 | $12,770 | 29.2% | 32.1% | 2.2% |
| Large user | 2,000 | 50% | $38,680 | $49,990 | $51,080 | 29.2% | 32.1% | 2.2% |
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 Namoi 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 Namoi 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.
Our Draft Report on Water NSW’s rural bulk water prices released in March 2021