Page 2371 - Week 06 - Friday, 27 June 2008
But it is also interesting that today we received our hard copies of the ICRC final report and price determination on water and waste water. This is an issue that should be shared with members of the Assembly. This is a piece of information that really needs to be broadcast widely. On page 75 and 76 the commission makes some comments about the demonstration water purification plant and the general process in relation to a larger water purification plant. I will take the time to read this because it is important. It states:
As discussed in the previous section, the WPP will be located at the Lower Molonglo Water Quality Control Centre. Should the ACT Government approve the construction of the WPP, it will have the capacity to produce 8 ML of purified water a day, with additional scope to increase production to 25 ML/day if required.
Construction of the WPP is forecast to cost approximately $100 million in capital expenditure in the forthcoming regulatory period and approximately $4 million in operating costs per annum. The Commission understands that ACTEW is seeking funding from the Commonwealth Government for approximately half the capital cost.
Along with submitters such as Dr Christopher Dorman, the Commission has strong reservations—
I emphasise: strong reservations—
about the prudence of construction of a WPP.
Firstly, the Commission does not believe that it has been demonstrated that a WPP is needed to solve the problem of ACTEW’s long-term water supply needs. The Murrumbidgee to Googong project and the enlarged Cotter Dam will provide a substantial increase in water security for the ACT under all likely future climate scenarios. Further, the additional supply capacity provided by the WPP is relatively minimal at only 3 GL per annum based on an 8 ML/day plant.
Secondly, the cost of water to be produced by the plant needs careful consideration. The Cotter Dam enlargement is expected to cost $145 million to build and to incur $1 million in ongoing operating costs, while supplying up to an additional 180 ML/day. The Murrumbidgee to Googong transfer has capital and operating costs of $96.5 million and $2 million respectively, while adding up to 55 ML/day to the ACT water supply. The WPP, by comparison, will cost $100 million to build and $4 million to operate each year, while adding 8 ML/day.
Modelling the costs and expected benefits in terms of water delivered from each project over a 25 year time horizon indicates that the cost per kilolitre of water delivered by the WPP may be more than twenty times more expensive than enlarging the Cotter Dam, and more than eight times more expensive than the Googong transfer option. There would therefore be a significant increase in customers’ bills as a result of proceeding with the WPP project. As the Commission has already noted, the outcome of this price decision is that ACTEW’s prices will already be substantially higher than anywhere else in Australia. In such circumstances water and sewerage customers’ willingness and