Welcome Murrumbidgee Customer Advisory Group - 28 November 2019 - MPII
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Welcome
Murrumbidgee
Customer Advisory Group
28 November 2019
Regulatory Economics
Pricing Determinations
1. Rural Pricing
2. Customer Juries – Engagement
3. WAMC Determination
Jonathan Dickson
Manager Customer and Industry Relationships
1) Rural Pricing - delay
• Given the Drought implications on many of our customers we believe delaying the timing of the Rural
Determination is in the best interests of our customers
• WaterNSW is, therefore, requesting a delay to submission of the Rural Price Determination of 1 year
• We anticipate hearing more on the process of a delay in the near future
• Proposal for Customer Juries
• WaterNSW will have a review in February 2020 to determine the appropriate start of engagement around
the question:
“How can we best meet your water needs?
and, what is the fair way to pay for it”
WaterNSW
2) Customer Juries WaterNSW
Customer Juries
Informing our Pricing Determinations for IPART, by bringing a mixed
group of citizens/customers together in a managed way
5 WaterNSW
New Democracy
Informing our price submission to IPART for Rural and WAMC
Principles of engagement:
Come to consensus on
Bringing a mixed group
Give an “How can we best meet your
of customers and citizens
incentive to read water needs?;
into a room
information and, what is the fair way to
booklet pay for it”
Success looks like:
recommendations written by everyday people for our IPART submission
6 WaterNSW
How it works
• Produce a 100+ page
info booklet
• Water 101 • Jury output will inform
• Explain the water our submission to IPART
sector and the • Bring Juries of 44 people
• Sections written by
challenges, issues and together in 3 locations
customer juries
trade-offs in our role as representing our
• from consensus
System Operator customer base
achieved through the
• Hold 5 concurrent
28 week process
weekend meetings, and
7 WaterNSW • 2 joint meetings to gain
consensus
Meeting Structure • Jury Membership pack – pre-reading • Meeting 1 Jury only • Meeting 2 Jury and CAG • Meeting 3 Jury only 3 Juries meet concurrently in regional locations • Meeting 4 Jury only • Meeting 5 Jury and CAG Summary discussion • Meeting 6/7 All Juries and CAG Chairs meeting One location 8 WaterNSW
Meeting setup • Independent Facilitator • Jury (44) small groups of 5-6 (mixed up every two hours) • Faculty (WaterNSW staff) • Invited presenters • Invited stakeholders/Press • Open to others • Resource table • Board for Observer questions • Pre Recorded information from stakeholders 9 WaterNSW
3) WAMC Determination
• Water Administration Ministerial Corporation (WAMC) IPART Pricing
Determination ends on 30 June 2021 (following a one-year extension) WaterNSW WAMC
• A new determination is to be in place from 1 July 2021 Services
• The 2016 WAMC determination set charges for the (then) Department of
Industry – Water • Water monitoring
• It did not contemplate WAMC functions being subsequently transferred
to WaterNSW and NRAR
• Licensing services
• WaterNSW’s objectives for our customers in the 2021 determination are
to ensure:
• Billing and account
– New charging arrangements lead to efficient, cost reflective charges management
at lowest cost
– Transparency of costs from each organisation providing regulated
services to customers
10 WaterNSWWAMC Roles and Responsibilities [1]
IPART’s WAMC determination applies to services of 3 NSW organisations
SYSTEM OPERATOR
WaterNSW
Customer water transaction and
RULE MAKER information services: providing
efficient and timely services to COMPLIANCE REGULATOR
our customers for water licensing
and approvals, water trades,
billing and meet their water
DPIE-W resource information needs for NRAR
surface and groundwater
The NSW Department of Planning, quantity and quality The Natural Resources Access
Industry and the Environment – Regulator is responsible for
Water is responsible for the compliance with and enforcement
planning, policy development IMPLEMENT THE RULES of the regulatory framework for
water, and determining licensing
and regulatory frameworks for
and approval applications and
regional water in NSW renewals for some users
MAKE THE RULES
ENFORCE THE RULES
WAMC
Charges
11 WaterNSWCurrent state – charges framework [1]
• The Water Management Charges represent the majority of costs in
addition to Fee for Service and are based on: WAMC Charges
• Water management charges include fixed charge ($/ML of entitlement) and Cover
variable charge ($/ML of water take)
– This applies with a 70:30 ratio of revenue recovered from fixed (entitlement) • 26 different water
and usage (water take) charges for most valleys sources
– A Minimum Annual Charge (currently $214)
• Regulated rivers in
– If no meter is available fees are calculated on 100% Entitlement 11 valleys
• In addition Fee for Service applies for:
• Unregulated rivers
• Consent transactions for: in 12 valleys
– issuing and amending water access licences
– performing water allocation assignments; and • Groundwater in 3
– works approvals areas:
- Inland
• Miscellaneous Services for meter service charges, water take assessment - Coastal and
and meter accuracy and reading charges - Murrumbidgee
12 WaterNSWCurrent state – funding [2]
• IPART’s 2016 determination set regulated revenues at $229 million in total
WAMC with
over four years
WaterNSW
• The user share (customer share) of IPART’s total efficient costs was $166
• WaterNSW has been
million or 72%
performing WAMC
• The remaining share of $63 million, or 28%, was funded by the NSW services since 1 July
Government (on behalf of the broader community) 2016
• WaterNSW share responsibility for the delivery of the services in the 2016 • We were first
WAMC determination with DPIE-W and NRAR conferred WAMC
• Revenues are shared between the organisations functions including
compliance, as part
• As a State Owned Corporation (SOC) WaterNSW is limited to this revenue of the NSW
Government’s water
reform agenda
• Compliance was
13 WaterNSW subsequently
transferred to NRARCurrent State [3]
• IPART’s 2016 WAMC determination set charges based on the
following methodology
Services Charging basis
Based on a geographic
split for regulated and
Water Management Water Management Charge unregulated rivers, and an
• Annual prices which recover Inland / Coastal split for
$ML/ entitlement - fixed (70%)
the costs of water planning groundwater
and management and apply
$/ML water take - variable (30%)
to all categories of water
•
licences.
Prices include entitlement
+
and water take prices and a
minimum annual charge Minimum Annual Charge Minimum Annual Charge
(MAC) of $214
Transaction Services
• Charges for each transaction
to administer the licensing Fee for Service
regime, e.g. water trading /
creating licenses
Miscellaneous Services
• Meter service charge
• Water take assessment charge
Fee for Service
• Meter accuracy and reading
charge
14 WaterNSWCurrent state – short comings [4]
• Current charging does not provide transparency of the respective costs for services
from:
– DPIE-W
– WaterNSW; and
– NRAR
• A key challenge for the 2021 determination is IPART providing increased
transparency of the functions and costs for WAMC services
• Transparency will provide customers with visibility of the costs for each Water
Agency and the cost of reform
• The first step toward cost reflectivity is to unbundle the existing charges
15 WaterNSWFuture State – principles we propose
• We are assessing alternative charging arrangements that could apply across the
three organisations to provide transparency
• It is important that any proposed charging structure is simple and transparent for:
– Customers: moving to more cost reflective charges, needs to ensure that the
individual and combined prices of WAMC service organisations are transparent and
easily understood
– IPART – when assessing each organisation’s pricing proposal, IPART will assess
whether the combined charges are cost reflective and how they compare
(individually and in aggregate) with the current determination
• WaterNSW is assessing on how best to transition to fully cost reflective charges
• IPART has recommended new User / Government cost sharing arrangements
whereby the user share may increase for WAMC services
16 WaterNSWInvestment
• WaterNSW is forecasting around $60-65 million in capital expenditure in the 2021
determination. This is comprised predominantly of:
- Water monitoring renewals ($30 million)
- A share of the ICT and Corporate systems ($30 million) and
- Motor vehicle fleet replacements ($2 million)
• WaterNSW needs to invest in digital technology to replace aging systems and to You
make customer transactions simpler and more timely asked
we
listened
• The ICT investment is also expected to deliver operating cost savings (including
business operations and IT back office costs)
17 WaterNSW Commercial in ConfidenceSeeking your input [1]
We are working with DPIE-W and NRAR to develop charging arrangements to
increase transparency and improved cost reflectivity
• Questions for WaterNSW 2021 determination:
– Is the current charging structure fit-for-purpose or does it need to change to
increase transparency as a result of the reforms?
– Should we unbundle charges immediately or transition over time?
– Would improved cost reflectivity justify more complex charging arrangements?
– How do we ensure prices are cost reflective while minimising impacts on
customers? eg. glide-path
18 WaterNSWSeeking your input [2]
Questions for WaterNSW 2021 determination:
• How do we meet customers’ information and transactional needs against
minimising bill increases?
• Are there any other issues that CAG members would like WaterNSW to
address at the WAMC determination?
19 WaterNSWWater Reform Implementation Plan
Announcement and Update
Key Account ManagersMetering: Delay to Compliance Dates
New Timeline
Government has listened to a variety of concerns and has extended the deadlines for meters to meet
compliance.
Revised start dates for the metering compliance now apply:
• 1 December 2020 - surface water pumps 500mm and above - All regions You
asked
we
• 1 December 2021 - remaining works that require a meter - Northern Inland regions listened
• 1 December 2022 - remaining works that require a meter - Southern Inland regions
• 1 December 2023 - remaining works that require a meter - Coastal regions
Note: Existing licence and approval conditions apply until the new dates come into effect
21 WaterNSWMetering: Work in Progress Roadshow Feedback • Government will consider all feedback from the metering roadshow in due course Meter ownership • A key principle of the scheme is that only compliant meters will be transferred • In due course Government will release an initial list of compatible Telemetry devices with the Government’s Telemetry framework • Ongoing consultation is anticipated on the design of a scheme to finalise the framework • By 31 March, 2020 Government is planning to launch the new telemetry system and engage with customers 22 WaterNSW
Metering Handback: Draft approach
Anticipated Process
WaterNSW Engage Visit Plan Implement
Teams
The Principles we are following
• Our team will conduct a one on one engagement with our customers impacted to establish an
inventory of meters:
• Discuss options that suit the customer:
– Customer has the choice/Option to retain or remove or just keep the asset as is
– Agree work required to meet compliance
– Discuss telemetry and data logger options (still to be confirmed)
23 WaterNSWNext Steps – Meter handback
• Fact sheet due for release soon
• DPIE Taskforce Round table discussion held on Friday 8 November 10am at Deni RSL covering:
– Eligibility
– What Government will do
– Warranty: what does it mean
– What does ‘opt-out’ of taking the meter mean
– Appeals process
– Meter Service Charge
• We recommend you check your works approval conditions match your current installation/s
If you choose to:
– Build your own inventory of Government owned meters ready for the engagement
• Our team will be in contact based on the applicable deadline to your size of meter
24 WaterNSWRural Mental Health
Jonathan Dickson
Manager Customer and Industry RelationshipsRural Adversity Mental Health Programme (RAMHP) • WaterNSW Customer and Community trialled a programme for our front line staff • This was subsequently extended to all WaterNSW staff • RAMHP has just been awarded National Mental Health Award 2019 WaterNSW
NSW Government
Fixed Fee Rebate
Key Account Manager
You
asked
we
listenedNSW Government Fixed Fee Rebate Rebate Update • Rebates for Rural and Regional NSW • 29,400 customers have currently received the rebates • Customers of eight Irrigation Corporations have also received the rebates as well as PIDs and Shared WALs • So far this year payment provided is greater than $4 million • Total rebate to date exceeds $30 million • We continue to advocate for further rebates to assist those with no access to water WaterNSW
Fixed Fee Rebate, repeats NSW Government have confirmed the fixed fee rebate will again be applied to WaterNSW invoices for approved users Users Rebate Applied Period Regulated Licences Equally over quarterly bills from Q4 2019 Q4; 2019/20 and Q1/2/3 2020/21 Unregulated Licences Applied to the next bill (2019/20 charges) Annual bill ~Sept 20 Ground Water Licences Applied to the next bill (2019/20 charges) Annual bill ~Sept 20 High Security Excluded Government Agencies Excluded • For more information: https://www.dpi.nsw.gov.au/climate-and-emergencies/droughthub WaterNSW
Asset Maintenance &
Services Update
Brian Mayhew
Manager Asset Maintenance & ServicesMaintenance capability
Leeton
5 people
Burrinjuck Dam
6 people
Balranald
5 people
Blowering Dam
2 people
31 WaterNSWMaintenance Burrinjuck dam Completed preventative maintenance and dam surveillance programs WaterNSW
Maintenance Burrinjuck dam Repaired leak on RFGV #1 WaterNSW
Maintenance Burrinjuck dam Corrected position sensor on 30” HJV WaterNSW
Maintenance Burrinjuck dam Conducted DSEP training WaterNSW
Maintenance Burrinjuck dam Inspected bi-level offtake structure WaterNSW
Maintenance Burrinjuck dam Installed mobile signal boosters WaterNSW
Maintenance Blowering dam Completed preventative maintenance and dam surveillance programs WaterNSW
Maintenance Blowering dam Tested emergency trip function on coaster gate WaterNSW
Maintenance Blowering dam Improved guarding on standby generator WaterNSW
Maintenance Blowering dam Spirit of Australia II Challenge for World Water Speed Record WaterNSW
Maintenance Gogeldrie Gate 2 Gearbox and Brake Assembly Refurbishment WaterNSW
Maintenance Gogeldrie Gate 2 Gearbox and Brake Assembly Refurbishment WaterNSW
Maintenance Beavers Creek Completed winter maintenance program WaterNSW
Maintenance North Caira Regulator Completed winter maintenance program WaterNSW
Maintenance North Caira Regulator Completed winter maintenance program WaterNSW
Maintenance Maude Weir Completed winter maintenance program WaterNSW
Maintenance Jindeena Regulator Lowbidgee structures erosion and rock protection works WaterNSW
Maintenance Athens Regulator Lowbidgee structures erosion and rock protection works WaterNSW
Maintenance North Redbank Channel Regulators Lowbidgee structures erosion and rock protection works WaterNSW
Maintenance North Redbank Channel Regulators Lowbidgee structures erosion and rock protection works WaterNSW
Maintenance Redbank Weir Murrumbidgee Coatings Program WaterNSW
Rural Pricing Submission –
Capital Plan
Brian Mayhew
Manager Asset Maintenance & ServicesOverview
• FY22-25 IPART Submission
– Capital Program Milestones
– Draft Capital Budget
• Program Summary
• Program Variances
• Cost share comparison
• Thematic Budget SummariesFY22-FY25 IPART Pricing Submission
Capital Program Milestones
– Final Capital Program ~March 2020
– Submission is due 1 July 2020
WaterNSWMurrumbidgee
Program Summary
ESTIMATED CAPITAL EXPENDITURE FY22-25 MURRUMBIDGEE VALLEY
Dam Safety, $1.6m
Facilities, $0.1m
Fleet, $0.6m
ICT/ Enterprise Architecture,
$2.4m
Water Infrastructure - Renewal
and Replacement, $26.0m
Total: $30.8m
57 WaterNSWProgram Variances – Murrumbidgee Valley 58 WaterNSW
Cost Share Comparison –
Murrumbidgee Valley
Customer and Government Share of 2021-2025 Estimated Capex
Current Cost Share vs. New IPART Determined
$32m
$31m
$3m $2m
$30m
$29m
$28m $28m
$27m $27m
$26m
$25m
Current Cost Shares New Cost Shares
Customer Share Government Share
59 WaterNSWWater Infrastructure Renewals &
Replacement
Project Categories Budget ($M)
Gate Renewals 7
Valve Renewals 2
Plant and Equipment 3
Coatings Works 5
Civil Works 2
Electrical Compliance 3
Erosion/Earthworks 1
Other 3
Total 26
60 WaterNSWDam Safety
Dam Safety costs will be included into IPART FY22-25 pricing submission, with
80% of project costs borne by customers under the new cost shares.
Project Budget ($M)
Post tensioning monitoring –
0.25
Burrinjuck & Blowering Dam
Portfolio Risk Assessment (PRA) -
1.25
Burrinjuck & Blowering
Other 0.1
Total 1.6
61 WaterNSWLowbidgee
Program Summary
ESTIMATED CAPITAL EXPENDITURE FY22-25 LOWBIDIGEE VALLEY
Other, $5,563
Water Infrastructure -
Renewal and Replacement,
$1,000,046
63
Total: $1m
WaterNSWProgram Variances – Lowbidgee Valley 64 WaterNSW
Cost Share Comparison –
Lowbidgee Valley
Customer and Government Share of 2021-2025 Estimated Capex
Current Cost Share vs. New IPART Determined
$1m
$1m
$101,110 $51,201
$1m
$1m
$954,408
$1m
$1m
$1m
$904,498
$1m
$1m
$1m
Current Cost Shares New Cost Shares
Customer Share Government Share
65 WaterNSWWater Infrastructure Renewals &
Replacement
Project Budget ($M)
Athon to Redgum Renewals 0.1
Splitter Bank Regulator Gate
0.1
refurbishment
TOP: Athon to Redgum Regulator
Talpee Escape Regulator
0.3
Renewals
BOTTOM LEFT: Tori Bridge BOTTOM RIGHT: Existing steel work at
abutment
Tori Bridge Replacement 0.1
Other 0.5
Total 1
66 WaterNSWDams Safety
Jonathan Dickson
Manager Customer and Industry RelationshipsDams Safety – new regulations Update • Current 1978 Act • New Act 2015 • New Regulations will commence 1st November • Greater onus on Asset owner • 2 Year transition to compliance. WaterNSW
Dams Safety – new regulations WaterNSW
Thank you Please don’t forget to complete the online survey you will receive by email after the meeting Next Meetings – with ongoing drought impacts, CAG dates may alter – please keep an eye out for changes WaterNSW
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