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Electricity Supply Industry Restructuring (Savings and Transitional Provisions)
Amendment Bill 2011
FACT SHEET
Hydro Tasmania is required, under section 16 of the Electricity Supply Industry
Restructuring (Savings and Transitional Provisions) Act 1995, to make available to
the owners of riparian tenements situated on the Lake River and the Ouse River
below Waddamana, and the land bounded by the Ouse River, Derwent River, Clyde
River and Lyell Highway (primarily the land within the Lawrenny Waterworks), water
reasonably required for the irrigation of that land.
The Act also provides the owners of the relevant land with an authorisation to take
the water made available to them.
The obligation on Hydro Tasmania to make water available was first provided
through the Loan (Hydro Electric Commission) Act 1957. The Loan Act provided the
approval for the construction of the Poatina Power Station, which also involved
reconfiguring water supply systems in and around Great Lake and the closure of
Waddamana Power Station on the Ouse River.
The obligation to make water available was provided to ensure that the water supply
relied on by relevant landowners was maintained into the future, notwithstanding the
closure of the power station and the rerouting of water flows north though Poatina.
Currently the amount of "water reasonably required" is unquantified and there is
uncertainty in regard to the statutory nature of the water rights of the relevant
landowners. These rights are inconsistent with the key characteristics of water
access entitlements required under the National Water Initiative. These rights do not
specify the essential characteristics of the water product (chiefly the volume), they
are tied to the land and are not tradeable.
The Bill amends the Electricity Supply Industry Restructuring (Savings and
Transitional Provisions) Act 1995 to achieve two main outcomes:
1. the amount of water Hydro Tasmania is required to make available to relevant
landowners will be determined (volumetrically);
2. relevant landowners will be provided with a contemporary, properly specified
water access entitlement under the Water Management Act 1999 (water
licence), or Irrigation Clauses Act 1973 (Irrigation Right).
The quantification of the rights held by relevant landowners is necessary to meet
Tasmania's National Water Initiative commitments. Not only will relevant landowners
continue to have water made available to them for irrigation (albeit that the amount of
water will be volumetrically defined), they will actually own the access entitlement to
that water, and this entitlement will be fully tradeable, constituting a capital asset that
does not presently exist. This contrasts to the present situation where, whilst Hydro
Tasmania makes water available, it retains ownership of the access entitlement to
that water.
2
Defining the amount of water to be made available by Hydro Tasmania will provide
certainty to the Corporation and allow proper planning and management of its
relevant water resources to occur, and proper planning for infrastructure
development and refurbishment.
The Bill specifies that the amount of water to be made available by Hydro Tasmania
is to be determined by agreement or, where agreement cannot be reached, awarded
by arbitration (under the Commercial Arbitration Act 1986). An agreement may be
made between Hydro Tasmania and relevant landowners individually or collectively;
similarly, an arbitrated determination may be made for Hydro Tasmania and
landowners individually or collectively
Once an agreement has been reached or an arbitrated award determined, the
Minister is to confer on landowners covered by the agreement or award, by order, an
authorisation to take water under the Water Management Act 1999 (water licence), or
Irrigation Clauses Act 1973 (Irrigation Right). An order is also to fix the amount of
water to be made available and cannot be inconsistent with the relevant agreement
or award. As these orders will be statutory rules, the outcomes of agreements or
awards will be set in law.