The Independent Pricing and Regulatory Tribunal (IPART) today announced caps on annual price rises for bulk water supplied by the Department of Land and Water Conservation.
The Tribunal has capped price increases at 15 per cent a year (plus CPI) for bulk water from regulated rivers � while charges for water from unregulated rivers and groundwater will rise by no more than 20 per cent each year (plus CPI).
IPART says that because the current level of cost recovery varies between rivers, many users � particularly on regulated rivers � will face real price increases of 8.5 per cent or less.
The Department of Land and Water Conservation (DLWC) had proposed a 20 per cent cap on real increases across the board.
The new price structure operates from October 1, 2001 until June 30, 2004 and allows DLWC to extend its two-part tariff � fixed charges, plus a variable charge based on usage � to unregulated rivers.
The Tribunal says its decision will strike a balance between improving DLWC�s cost recovery in line with the national water reform agenda and the needs of water users � mainly farmers.
�The Tribunal has to carefully balance the imperative of full cost recovery, which is vital for environmental and economic policy reasons, with the impact of price rises on users - in particular farmers,� says IPART Chairman, Dr Tom Parry.
�The proposed price increases will result in full cost recovery on the majority of regulated rivers by the end of the three year determination period, with annual price rises significantly lower than the 15 per cent maximum.�
�Prices are much lower for users of water from unregulated rivers and groundwater � so the Tribunal felt steeper increases would be appropriate in those areas.�
The Tribunal, assisted by two independent consulting firms, carried out extensive analysis of the cost base of the DLWC to ensure only efficient costs are passed on to water users.
There also was extensive consultation with stakeholders, including meetings chaired by IPART in Armidale and Griffith.
�The Tribunal was pleased with the level of stakeholder response to the Draft Report and has clarified some sections of the Report after considering the issues raised in submissions,� says Dr Parry.
The full Report is available on the Tribunal�s website at www.ipart.nsw.gov.au