A proposed price hike that would have seen Lachlan Valley irrigators paying 150 to 270 per cent more for water over the next five years has been wound back, with IPART releasing new draft pricing restricting increases to 1.9 per cent in the first year, and CPI after that.
The Independent Pricing and Regulatory Tribunal is reviewing maximum water prices for WaterNSW’s bulk water services.
WaterNSW has sought to increase its revenue by 43 per cent over the next five years, including a 38 per cent increase for Greater Sydney and a 53 per cent increase for regional and rural NSW, a statement from IPART to media said.
Customers have given feedback that they cannot afford those increases.
Tribunal Chair Carmel Donnelly said the Tribunal proposed to set shorter-term prices that could be in place for up to three years for both Greater Sydney and Rural Valleys.
While these prices are in place, IPART will continue further review of WaterNSW’s proposed prices to inform future pricing decisions.
Shorter-term draft prices for WaterNSW’s regional and rural customers would increase by 1.9 per cent plus inflation from 1 July 2025 and then by inflation only on 1 July 2026 and 1 July 2027.
“IPART’s current review to set the maximum prices for WaterNSW has been complex,” Ms Donnelly said.
“WaterNSW has proposed a significant increase in revenue, which implies large price increases for customers.
“Some broader issues have also emerged during the review.
“WaterNSW indicates the main drivers of the proposed increases are macroeconomic factors and increased requirements which have imposed additional costs. At the same time demand for WaterNSW services is forecast to decrease.”
NSW Irrigators CEO Claire Miller described the change as a win.
“NSWIC and its members told IPART loud and clear the current water pricing model is broken and must be fixed if our farmers are not to be priced out of business and local NSW produce priced off supermarket shelves,” Ms Miller said.
“IPART has heeded that message, stating that its draft determination will enable affordability, cost-sharing, services and other issues to be worked through over the next three years to June 2028.
“This is a substantial win for our members and all rural water customers across NSW.”
The draft determination translates to farmers paying thousands of dollars less than was proposed in many valleys.
The shorter-term draft prices could be in place until June 2028 but may be replaced earlier if ongoing work by WaterNSW and IPART enables new price determinations earlier.
Any new determinations would be made only after IPART issues a draft report, seeks and considers submissions and holds a public hearing.
“Our information paper and WaterNSW’s pricing proposal are available on IPART’s website. We welcome community feedback via IPART’s website until 3 June 2025,” Ms Donnelly said.
"We are also undertaking financial analysis to ensure the draft shorter-term prices will enable WaterNSW to meet its obligations.”
Ms Miller said NSW Irrigators would be requesting more information from IPART to more accurately break down the impact in bills for the next three years, to help inform submissions.
“This IPART draft determination is welcome prospective reprieve not just for farmers, but all WaterNSW customers with water licences including local government, sport, processing and food manufacturing,” she said.
“We welcome the recognition that rural water customers should not be paying for non-commercial, public interest activities that are cost-drivers for WaterNSW.
“These include water safety, environmental and social outcome activities additional to the core business of delivering water to customers.”