Below we present key information on our draft decisions for Water NSW’s rural bulk water services for customers in the Hunter 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 Hunter 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 Hunter valley has increased by 50.7% but is 10.4% lower than proposed by Water NSW
- capital expenditure for Hunter valley has increased by 57.9% and is 24.6% higher than proposed by Water NSW.
Offsetting these increases, the cost of capital has decreased from 4.7% to 2.8%.
Draft decision on customer share of revenue requirement for Hunter 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 Hunter valley since the 2017 determination period?
Data source: IPART analysis.
Draft decision on prices for the Hunter valley
We have 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 – Hunter 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 | $14.15 | $20.41 | $19.02 | 44.2% | 34.4% | -6.8% |
| General security | $10.98 | $15.85 | $14.78 | 44.4% | 34.6% | -6.8% |
| Usage | $13.60 | $19.94 | $18.58 | 46.6% | 36.6% | -6.8% |
Indicative bills under our draft decisions for the Hunter 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 for Hunter 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% | $139 | $202 | $188 | 45.4% | 35.5% | -6.8% |
| Medium user | 30 | 100% | $833 | $1,211 | $1,128 | 45.4% | 35.5% | -6.8% |
| Large user | 200 | 100% | $5,550 | $8,070 | $7,520 | 45.4% | 35.5% | -6.8% |
| General Security | ||||||||
| Small user | 20 | 50% | $356 | $516 | $481 | 45.2% | 35.4% | -6.8% |
| Medium user | 80 | 50% | $1,422 | $2,066 | $1,926 | 45.2% | 35.4% | -6.8% |
| Large user | 300 | 50% | $5,334 | $7,746 | $7,221 | 45.2% | 35.4% | -6.8% |
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 Hunter 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 Hunter 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.