EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 83

 

Issued by authority of the Minister for Climate Change, Energy Efficiency and Water

 

Water Act 2007

 

Water Amendment Regulations 2010 (No. 1)

 

The Water Amendment Regulations 2010 (No. 1) (the Regulations) amend provisions of the Water Regulations 2008 (the Principal Regulations) dealing with the water market and charge rules under the Water Act 2007 (the Act).

 

Subsection 256(1) of the Act provides for the Governor-General to make the Regulations prescribing matters required or permitted to be prescribed by, or necessary or convenient to be prescribed for carrying out or giving effect to, the Act.

 

Section 92 of the Act provides for the Minister for Climate Change, Energy Efficiency and Water to make water charge rules (rules) that apply within the Murray-Darling Basin.

 

The rules must relate to regulated water charges. Regulated water charges are listed in subsection 91(1) and include:

(a) fees and charges payable to an irrigation infrastructure operator for access, changing access, terminating access to that operator’s irrigation network or surrendering to the operator a right to the delivery of water through the operator’s irrigation network;

(b) bulk water charges; and

(c) water planning and management charges.

 

A bulk water charge is defined in subsection 4(1) of the Act as a charge payable for the storage of water for, and the delivery of water to infrastructure operators, other operators of reticulated water systems or other persons prescribed by the Regulations.

 

The water charge rules do not apply to water charges in respect of urban water supply activities beyond the point at which the water has been removed from a water resource, as set out in subsection 91(3).

 

Subsection 91(1)(d) provides for fees and charges to be prescribed as regulated water charges if they relate to access to water service infrastructure, services provided in relation to access to water service infrastructure, services provided through the operation of water service infrastructure or the taking of water from a water resource.

 

While the list of regulated water charges includes the vast majority of charges levied by infrastructure operators for rural water services, there are certain water charges that are not specified. These include charges for the provision of bulk water services to customers other than infrastructure operators and other operators of reticulated water systems. These also include charges associated with access (or changing or terminating access) to water service infrastructure that is not an irrigation network (i.e. infrastructure that is not used for the purposes of delivering water for the primary purpose of being used for irrigation), for example fees for drainage services. The Regulations fill these gaps in the coverage of the rules.

 

The principal provisions of the Regulations:

 

- prescribe as persons for the purposes of the definition of ‘bulk water charge’ in subsection 4(1) of the act persons who divert water directly from a watercourse for the person’s use, including for agricultural or industrial purposes, irrigation, or stock and domestic use if the water is made available through a bulk water service; and

 

- prescribe as regulated water charges certain charges payable to infrastructure operators, that do not relate to an irrigation network or an urban water supply network, or are not bulk water charges.

 

The Regulations enhance the coverage of the water charge rules to benefit water users and infrastructure operators. The Regulations ensure that water users will benefit from regulatory protection over a wider range of water charges and will simplify regulatory arrangements for infrastructure operators. This will ensure a more consistent approach to the regulation of water charges across the Basin and will facilitate the efficient functioning of the water market by reducing pricing distortions.

 

Consultation

 

The Regulations have been finalised after a consultation process by the Department of the Environment, Water, Heritage and the Arts with relevant stakeholders including Basin State Governments, industry organisations and infrastructure operators.

 

The Regulations are made under Part 4 of the Act, which is a ‘referred provision’ as defined by section 18B of the Act. The Regulations are ‘referred regulations’ for the purposes of the Intergovernmental Agreement on Murray-Darling Basin Reform – Referral (the Referral IGA). Under clause 3.5 of the Referral IGA, the Commonwealth is required to obtain the approval of the referring Basin States before making referred regulations. The Regulations have been approved by Basin States.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003. The Regulations commence on the day after they are registered.

 

Details of the Regulations are set out in the Attachment.

 

ATTACHMENT

 

 

The details of the Water Amendment Regulations 2010 (No. 1) are as follows:

 

Regulation 1 provides for the Regulations to be referred to as the Water Amendment Regulations 2010 (No. 1).

 

Regulation 2 provides that the Regulations commence on the day after they are registered.

 

Regulation 3 provides that Schedule 1 amends the Water Regulations 2008.

Schedule 1

 

Schedule 1, Item 1 inserts a definition of ‘bulk water service’ in regulation 1.03(1) of the Principal Regulations. ‘Bulk water service’ is defined as a service that is provided for the storage of water that is primarily stored on-river and/or a service that is provided for the delivery of water that is primarily delivered on-river.

 

Schedule 1, Item 2 inserts a new regulation 1.05A in the Principal Regulations. Regulation 1.05A prescribes for the purposes of the definition of ‘bulk water charge’ in subsection 4(1) of the Act a person who diverts water directly from a watercourse for the person’s use including for agricultural or industrial purposes, irrigation or stock and domestic water use where the water is made available through a bulk water service.

 

Schedule 1, Item 3 inserts Division 4.1A entitled ‘Regulated water charges’ into the Principal Regulations. Division 4.1A consists of regulation 4.01A which prescribes certain types of fees or charges payable to an infrastructure operator as regulated water charges for the purposes of subsection 91(1)(d) of the Act. The regulation covers fees or charges to the extent that they do not relate to an irrigation network or an urban water supply network or are not bulk water charges. ‘Urban water supply network’ is defined by the regulation to mean ‘water service infrastructure that is operated primarily for delivering water for an urban water supply activity beyond the point at which the water has been removed from a Basin water resource’.

 

The types of fees and charges covered by the regulation include fees and charges payable to a bulk water supplier for changing access to or terminating a bulk water service. ‘Bulk water supplier’ is defined by the regulation to mean ‘a person who imposes a bulk water charge for a bulk water service’.