Setting fees and charges
Water planning and management services in New South Wales are provided by the Department of Primary Industries - Water (DPI Water). These services include planning and management of the State's water resources and the licensing of water extraction for regulated rivers, unregulated rivers and groundwater sources. The services are essential to protect the health of the state's freshwater resources and ecosystems and to ensure water can be made available to water users and the environment on a timely and sustainable basis.
The Independent Pricing and Regulatory Tribunal of NSW (IPART) is responsible for setting the maximum charges DPI Water can levy for its water management services. The charges recover a share of the costs incurred by the Department in providing these services.
In September 2015, DPI Water lodged a submission to IPART to set charges for water management services from 1 July 2016 to 30 June 2020. Following an extended inquiry process, IPART set the new charges ton 7 June 2016. This process involved consultation with water users and the public on the DPI Water's proposal for cost recovery in conjunction with detailed analysis and review of the DPI Water's water management costs, cost allocation methodology and tariff modelling.
- View the current pricing determination for DPI of Water: Determination - Review of Prices for the Water Administration Ministerial Corporation - From 1 July 2016
- Further information can be found on the IPART website
Charges for water management services apply to water access licences issued under the Water Management Act 2000 and water licences under the Water Act 1912. The charges are paid by irrigators, mines and other industry, bulk water suppliers and the local councils and water utilities that supply drinking water to cities and towns, and environmental water holders. IPART sets three categories of fees and charges, as discussed below.
Water management charges recover the cost of the DPI Water's planning and management activities, predominantly undertaken to manage the impacts of water extraction. Separate charges apply to each water source and river valley or groundwater region, reflecting the different cost structures for the water management activities undertaken in these systems. Details of these charges can be found at Fees and charges.
Consent transaction fees requested by licence holders on their licences and approvals, as well as applications for new licences and approvals, recover the cost of processing these transactions. They apply on a statewide basis because the cost of processing transactions is the same across all valleys. Details of these fees can be found at Application fees.
Metering and water take assessment charges recover the cost of reading and servicing meters or other ways of measuring water take by licence holders, and also apply on a state-wide basis. Details of these charges can be found at Metering/water take assessment charges.
WaterNSW also charges for water storage and delivery services provided on regulated river systems.
- Visit the WaterNSW website for information on these charges.
The IPART Act 1992 requires IPART to set maximum charges for the Water Administration Ministerial Corporation's monopoly water management services. DPI Water delivers these services on behalf of the Corporation. The Act also requires the Minister for Land and Water to seek the Treasurer's approval to waive or reduce charges below the maximum charges.
The Water Management Act 2000 (WMA) makes provision for the Minister to impose fees and charges, noting that they cannot exceed a relevant IPART determination. Water charge rules in the Commonwealth Water Act 2007 give the Australian Competition and Consumer Commission (ACCC) responsibility for reporting on, monitoring and publishing information on charges – but not setting charges – for water planning and management services in the Murray-Darling Basin, including the DPI Water's water management services in NSW that fall within the Basin (all inland valleys). These arrangements help ensure that processes for setting and implementing charges are adequately disclosed, are transparent and adhere to the requirements of relevant legislation. The information provided on this page and associated linked pages supports the publishing requirements. Further references to information on the publishing requirements can be found in Appendix F of IPART's report.
IPART has adopted a 'building block' approach in allocating costs and setting the DPI Water's charges. The steps involved in this process include:
- setting efficient operating and capital costs for the DPI Water's service delivery
- determining the share of these costs that should be paid by water users, applying the 'impactor pays' principle (i.e, those who cause the costs pay for the activities to address their impacts) to each water management activity concerned (see table below). Unique cost shares are applied to the costs of each activity to derive the costs attributable to government and users. This continues the approach adopted in the 2011 determination.
- allocating costs attributed to users to each valley and water source – regulated rivers, unregulated rivers and groundwater – using unique cost drivers developed by the DPI Water
- setting the two-part tariff and the split between fixed (access) and usage charges, based on the DPI Water recovering 70 per cent of revenue from the access charge and 30 per cent of revenue from the usage charge. Under the determination, all users with a meter move to a two-part tariff
- determining forecasts for entitlement and usage volumes, and setting access and usage charges based on these volumes in conjunction with the costs attributed to users
- establishing the efficient, incremental cost of specific activities such as meter services and licensing transactions, and setting separate charges for these activities on a state wide basis
- assessing impacts of the charges on users, and making relevant adjustments. IPART concluded, after an analysis of sample water bills and consideration of the contribution that the DPI Water's costs make to farm business costs and the ability of users to trade entitlements to mitigate higher charges, that the impact of the increased charges on users would be generally small
- establishing an ongoing reporting framework for the DPI Water to respond to systems and performance matters raised by IPART, to ensure robust 'ring-fencing' of DPI Water expenditure, including transparency and accountability of both expenditure and outcomes.
|Activity code||Activity description||User share of costs|
|W01||Surface water monitoring|
|W01-01||Surface water quantity monitoring||70%|
|W01-02||Surface water data management & reporting||50%|
|W01-03||Surface water quality monitoring||50%|
|W01-04||Surface water algal monitoring||50%|
|W01-05||Surface water ecological condition monitoring||50%|
|W02-01||Groundwater quantity monitoring||100%|
|W02-02||Groundwater quality monitoring||100%|
|W02-03||Groundwater data management & reporting||100%|
|W03||Water take monitoring|
|W03-01||Water take data collection||Fee for service|
|W03-02||Metering data management & reporting||100%|
|W04||Water modelling and impact assessment|
|W04-01||Surface water modelling||50%|
|W04-03||Water resource accounting||100%|
|W05||Water management implementation|
|W05-01||Systems operation and water availability management||100%|
|W05-02||Blue-green algae management||50%|
|W05-03||Environmental water management||0%|
|W05-04||Water plan performance monitoring and evaluation||50%|
|W06||Water management planning|
|W06-01||Water plan development (coastal)||70%|
|W06-02||Water plan development (inland)||70%|
|W06-03||Floodplain management plan development||0%|
|W06-04||Drainage management plan development||0%|
|W06-05||Regional planning and management strategies||70%|
|W06-06||Development of water planning and regulatory framework||75%|
|W06-07||Cross-border and national commitments||50%|
|W07||Water management works|
|W07-01||Water management works||50%|
|W08||Water regulation management|
|W08-01||Regulation systems management||100%|
|W08-02||Consents management and licence conversion||100%|
|W08-99||Water consents overheads||100%|
|W09||Water consents transactions|
|W09-01||Water consents transactions||100%|
|W10||Business and customer service administration|
|W10-02||Business governance and support||70%|