A draft of the Queensland Competition Authority’s (QCA) rural irrigation price review is being released for stakeholder feedback today.
The draft report, which has been provided to both the Treasurer and the Minister for Natural Resources, Mines and Energy, has been published following a collaborative and open process, with the QCA receiving more than 100 submissions and holding 15 workshops across the state.
The QCA now invites stakeholders to provide additional feedback as part of its ongoing consultation, ahead of the anticipated release of the final report in February 2020.
The review, the first of its kind since 2013, covers irrigation prices for water supply schemes operated by Sunwater and Seqwater from 1 July 2020 to 30 June 2024, and makes a range of recommendations to the Queensland Government.
QCA Chair Professor Flavio Menezes said the draft report proposed “cost-reflective” adjustments to existing tariffs, which meant that while some water supply schemes faced potential small price changes, others faced increases.
He said that at the government’s instruction, the QCA had proposed two sets of prices for schemes with planned dam safety upgrades: one which included apportioning a share of dam safety upgrade expenditure to irrigators, and one that did not.
“The QCA’s draft recommendations, if adopted, would result in price increases for some schemes,” Professor Menezes said.
“It’s important to remember that a pricing review has not been done for seven years, and this is the first time the government has instructed us to consider apportioning the costs of dam safety upgrades.”
Professor Menezes said while the government’s water pricing policy outlined the transition path for fixed prices, the QCA had considered bill impacts for irrigation customers when recommending the volumetric price (charged on each megalitre of water used) for each tariff group. Where the cost reflective volumetric price for a tariff group was higher than the current price, the QCA had moderated the impacts for some tariff groups by proposing increases in line with inflation, based on stakeholder feedback.
Professor Menezes acknowledged that water pricing was a contentious issue, reiterating that the QCA’s recommendations remained subject to change and pricing decisions ultimately rested with the state government.
“The review’s proposed recommendations are limited by the terms of the government’s referral and the QCA’s obligation under law to consider a range of issues such as efficient resource allocation, equity and regional development,” he said.
“It is likely that some stakeholders will have differing views on the appropriate emphasis to be given to these issues, so I encourage them to participate in the next round of consultation.
“Ultimately, the decision on pricing for irrigators will be made by the government after the QCA submits its final recommendations on January 31 next year.”
Professor Menezes said Sunwater had submitted updated cost forecasts in June 2019, and made supplementary submissions on a minimum access charge and an electricity cost pass-through mechanism, and that the QCA was eager to ensure that all stakeholders had been given the opportunity to consider and comment on these matters.
“We encourage all stakeholders to participate in this final consultation process to ensure the best outcome for both irrigators and the state,” he said.
The QCA will undertake a final round of regional workshops this month. Please visit the QCA website for more information.
For more information and to make a submission, visit the QCA website. The closing date for submissions is 4 November.
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