Irrigation Price Path – Frequently Asked Questions

Renewals costs are those related to works undertaken to replace or maintain assets outside their normal schedule for maintenance. Irrigation prices include a contribution towards these works.  

Sunwater currently recovers renewals costs through a customer annuity contribution. The annuity model is based on forecasting future renewals costs over 30 years, then applying a constant yearly payment to customers’ prices. Therefore, customer prices reflect a contribution towards work that has been completed but also up to 30 years of work that is yet to be completed.

The proposed change is to introduce a regulated asset base, or RAB, approach. Under a RAB customers would only pay for renewed assets that are contributing to their services today. Rather than paying for something that may, or may not, happen in the next 30 years, the cost of renewing (or upgrading) an asset would be repaid over the life of the asset, similar to paying down a mortgage.  Pending customer feedback, the proposal may form part of our Irrigation Price Path submission to the QCA.

Under the current annuity-based approach forecasting future renewals over 30 years is a complicated process and the confidence level of those forecasts gradually diminishes beyond the five-year mark.  

For example, while Sunwater may have forecasted to replace an asset in 30 years, closer to that time we may find that it is in better than expected condition, and the replacement can be deferred by five years or more.   

Detailed information can be found in the Renewals Recovery factsheet on the Sunwater website at https://www.sunwater.com.au/projects/price-path/factsheets/, under Factsheets Stage 2. 

The customer invoice calculator enables customers to calculate what the draft proposed irrigation prices from 1 July 2025 to 30 June 2029 will mean for them. It allows customers to see what their annual water invoice would be in the event the draft irrigation prices become the final gazetted prices.

A customer simply goes to Sunwater’s irrigation customer invoice calculator page, selects their water supply scheme name from a dropdown box and enters their water allocation volume and usage data. This will produce two sets of draft prices – their draft forecast prices under an annuity approach and under a regulated asset base approach.

As part of Sunwater’s irrigation pricing proposal, we are proposing a change to the way we recover renewals costs through irrigation prices. The invoice calculator will produce one amount based on the current method of annuity payments, as well as another amount with the proposed change to a RAB methodology applied. More information about renewals recovery can be found under factsheets  (Stage 2) on Sunwater’s Irrigation Price Path project website.

We are proposing changes that will enable us to publish Service and Performance Plans (S&PPs) in a more timely manner, leading to more timely and meaningful customer engagement. We are proposing that the S&PPs examine Sunwater’s performance in the most recently completed financial year against QCA cost targets and service targets. We will also consult with our customers on forecast costs and project priorities for the upcoming financial year.  More information about S&PPs can be found under factsheets (Stage 2) on Sunwater’s Irrigation Price Path project website.

The pass-through mechanism would only apply to up to seven water supply schemes where electricity costs are material due to significant pumping assets. A permanent symmetrical mechanism would ensure customers only pay for actual electricity costs and that Sunwater is reimbursed for its actual electricity costs. Pending customer feedback (on a scheme-by-scheme basis), the proposal may form part of our Irrigation Price Path submission to the QCA. More information about the electricity cost pass-through proposal can be found under factsheets (Stage 2) on Sunwater’s Irrigation Price Path project website.

Eton, Bundaberg distribution, Burdekin Haughton distribution, Lower Mary River distribution and some tariff groups in Barker Barambah, Mareeba-Dimbulah distribution and Upper Condamine, are eligible to opt in.

Sunwater wants to understand whether customers support the proposals before we decide whether or not to include them in our submission to the Queensland Competition Authority.

There are two proposals relevant to all water supply schemes. These are:

1. moving from an annuity to a regulated asset base approach for recovering renewals costs
2. refreshing annual service and performance plans.

A third proposal, relevant to seven water supply schemes where electricity costs are material due to significant pumping assets, includes:

3. introducing a permanent electricity cost pass-through mechanism.

More information about these proposals can be found under factsheets (Stage 2) on Sunwater’s Irrigation Price Path project website.

GoVote is an independent online platform where customers can provide direct, anonymous feedback on Sunwater’s proposals.

The GoVote website will be available to visit from 14-18 August 2023. Customers can also provide other feedback to Sunwater about the price path process by emailing pricepath@sunwater.com.au

The QCA will review Sunwater’s pricing proposal in line with its requirements under the Queensland Competition Authority Act 1997 and any conditions set out in the Referral Notice, before making recommendation to the Queensland Government.

Sunwater releases updated fees and charges schedules for each water supply scheme annually. The schedules detail our charges, including those subject to any applicable Rural Irrigation Water Pricing Direction.

In the majority of schemes, there are two types of ongoing service charges for irrigation water: fixed (Part A and C) and volumetric tariffs (Part B and D).

Fixed and volumetric charges for irrigation customers in regulated schemes are set by the Queensland Government based on recommendations from the QCA.

As part of our Irrigation Price Path Engagement Plan, we will:

• keep customers informed via dedicated customer forums and existing irrigation advisory committees
• seek feedback from customers on our pricing proposal
• ensure all project materials are available online.

Details about upcoming engagement opportunities can be found on the project’s Consultation page here.