Water NSW has proposed price hikes of up to 240 per cent for rural bulk water users from July 2021, largely in order to cover the costs of metering reforms.
The proposed prices are currently being reviewed by The Independent Pricing and Regulatory Tribunal (IPART) who will determine whether the costs are justified. IPART's draft report is due in March and their final price determination will be set in June.
Water NSW first submitted price proposals in June 2020 but in November they provided IPART with updated costs, proposed prices and bill impacts of implementing the NSW Government's non-urban metering reforms.
IPART has stated this is mainly due to its (Water NSW's) costs of collecting and managing information from private and government-owned meters, and servicing government-owned meters.
The significant increases are an evident cause of concern for irrigators with NSW Irrigators Council chief executive officer Claire Miller calling the prices "exorbitant."
"We can't get straight answers on what is driving this massive hike, whether Water NSW has grossly exceeded its planned expenditure, or is facing budget cuts as the Government looks for savings to pay for its Covid response," Ms Miller said.
"Whatever the reason, it is not acceptable to hit up water users to make up the difference, especially when farmers are still in the red after years of drought."
The Water NSW proposal would also see Murray and Murrumbidgee water users paying a much larger share of Murray Darling Basin Authority costs, Murray Irrigation calculating their customers' MDBA fees would rise by 62pc.
The MDBA fees would significantly contribute to a price increase of 28pc in overall government charges for the average Murray Irrigation customer.
Murray Regional Strategy Group (MRSG) stated the NSW Government needed to improve metering in the Northern Basin, but was expecting southern farmers to pay for its implementation.
"Water NSW, a NSW government bureaucracy, has no justification for charging massive fees to irrigators in our region, simply because it has not done its job properly in the north," MRSG chairman Geoff Moar said.
"This is blatantly unfair."
However, Ms Miller said the pricing proposal seeks to recover metering reform costs specific to each valley.
"There is no cross-subsidisation from one valley to another or south to north," she said.
"For example, farmers with State-owned meters in the Murray valley are facing a 175pc price hike to cover the cost of upgrading those meters to be compliant with the new metering standard, despite assurances that the Government would pay for the upgrades."
Water NSW responded to the concerns by stating costs have been influenced by factors such as drought, including the delivery of emergency infrastructure to some valleys, along with ongoing investment in dam safety upgrades, and implementing significant long-term water sector reforms.
"Several external factors are also putting significant upward pressure on customer charges, including lower historical water volumes and changes to the NSW Government cost shares arising from the IPART 2019 Cost Share Review," they stated.
"Our forecast operating costs are however still broadly consistent with the longer-term historical trend of operating expenditures for the rural valleys, with only moderate growth over that period."
Water NSW stated the pass-through MDBA costs were determined by the NSW government.
The Department of Planning, Industry and Environment was contacted for comment.
