As part of Pricing Submission 2024, Goulburn-Murray Water (GMW) is proposing to reduce the number of drainage pricing entities.
GMW is also proposing to make changes to tariffs for drain diversion and to phase out the Water Use Fee.
This will help us work towards a simpler, fairer and more cost-reflective drainage tariff.
Our customers have told us that the drainage tariff is overly complicated and difficult to understand.
The current tariff has 35 separate surface drainage fees, as well as individual drain divisions for each property.
This means there are a total of 119 separate surface drainage fees that may be applied to a surface drainage customer
Amalgamating services into new pricing entities
GMW is proposing to amalgamate primary and GMW community surface drain services, then organise them into new pricing entities to simplify tariffs.
The new primary and GMW community surface drainage pricing entities would be organised into East, West and Central areas, while Tyntynder will remain its own entity to be reviewed further during the next pricing regulatory period.
The amalgamations would reduce the number of GMW community surface drainage entities by six, and the number of primary surface drainage entities by three – an overall reduction from 13 to four.
This change would see the following amalgamations:
- Shepparton and Murray Valley areas will become East Surface Drainage
- Central Goulburn and Rochester areas will become Central Surface Drainage
- Loddon Valley and Torrumbarry areas will become West Surface Drainage.
Tyntynder will remain as a standalone area for drainage as water is primarily drained via pumps in this region, rather than gravity based. It will be further reviewed during the next pricing regulatory period.
The alignments of East, Central and West are based on similarities in location, customer enterprises and current local drainage circumstances and needs.
Amalgamating the areas will help simplify our drainage tariff for customers.
This change will impact all customers in the GMID that pay surface drainage fees, with the exception of Tyntynder.
There are currently six GMW community surface drainage pricing entities – the main purpose for which is to recognise the different funding arrangements for the initial construction of these drains.
GMW’s Community and Primary surface drains are designed and managed for the same level of service based on catchment area. Amalgamating the two services will simplify the drainage tariff calculations for customers and reflect the cost for the overall service.
In order to preserve appropriate cost sharing, review and adjustment to their Primary Surface Drainage drain division will be required for GMW Community Surface Drainage properties.
The adjustments will be made so that the original rationale for separate pricing entities is taken into account.
If you would like to discuss how these proposed changes will affect you, please phone GMW on 1800 013 357.
We are asking our customers for feedback on this proposal.
As a GMW customer, do you support combining primary and GMW community surface drainage, and amalgamating the areas into East, Central and West?
Simplifying drain diversion fees
We are proposing to simplify the fees we charge to take water from drains (drain diversion).
Currently the drain diversion site fee is split between low flow and high flow sites.
We are proposing a flat $55 (plus Consumer Price Indexing) Site Fee for drain diversion instead.
We are also proposing to discontinue the Agreement Volume Fee
This will be a reduction in costs for drain diversion customers and reflect the lower costs in providing this service (customers in Murray Valley, Shepparton, Central Goulburn and Rochester) and continuation of existing arrangements for customers in Loddon Valley, Torrumbarry and Tyntynder.
We are asking our customers for feedback on this proposal.
As a GMW drain diversion customer, do you support the removal of the low flow and high flow site fees in favour of a $55 Site Fee? Do you support removal of the Agreement Volume Fee?
Phase out the Water Use Fee
The current drainage tariff is calculated by a combination of an Area Fee (based on property size) and a Water Use Fee (based on the volume of water delivered to the property).
We are proposing to phase out the Water Use Fee, and recover drainage costs based on the Area Fee.
The Water Use Fee will be gradually phased out over a period of time.
Water use is no longer a clear cost driver or relevant way to calculate drainage charges. The cost drivers to maintain the drainage system is no longer related to the amount of irrigation water being used.
As on farm development and farming practices have evolved, there is much less distinction between the drain inflows from irrigated and non-irrigated land.
Farming practices have evolved and water reuse has reduced the impact on drains from farms still being irrigated during lower intensity rain events.
For properties not being irrigated, low intensity rainfall is absorbed by the soil.
Runoff from both irrigated and unirrigated properties in higher intensity events is now the overwhelming source of runoff into drains and in both cases the amount of runoff is proportional to the property area.
We want to hear from customers about how
we should implement the phase out of the Water Use Fee.
The change and price impact can take place over the next regulatory period (2024-28) or over two regulatory periods (2024-28 and 2028-32).
Doing so over two regulatory periods would lessen the impact for those who bills will increase. Those whose bills will decrease will not see this occur as quickly.
As a GMW customer, would you prefer the Water Use Fee be phased out over one regulatory period (2024-28) or over two regulatory periods (2024-28 and 2028-32)?
Changes to pricing
On average, customers will see the Water Use Fee reduce across the next regulatory period before it drops to zero and is phased out.
While this occurs customers will see an increase in drainage Area Fees across the regulatory period and the areas align to East, Central, West and Tyntynder for surface drainage by 2027/28.
Customers in Loddon Valley will see a larger drop in their Water Use Fee as they amalgamate into the West area.
Proposed pricing for 2024-28 (excluding CPI)
Note: All prices provided above are calculated excluding CPI and could be subject to change as part of the consultation and determination process for the 2024-28 Pricing Submission.