In setting water delivery fees for the 2024/25 season, the CPC Board has reviewed the Company’s performance for the 2023/2024 financial year and taken into consideration several factors influencing its operations and its shareholders’ interests.
The key issues in setting prices for the coming year are: ‐
Increased Power Pricing Impact on Water Delivery Costs.
Power pricing nationally has recently softened somewhat from the previous 2 years but remains high in general terms and is forecast to remain so for the longer term. CPC’s current power supply contract ends on 31/12/24.
CPC has recently tendered and accepted a new 30‐month (ending 30/06/27) power supply agreement with AGL. In line with market movements, the new power rates are almost double our current rates which were obtained 3 years ago at a period when power pricing was at its lowest point in 10 years.
The new rates in comparison to those on offer over the previous two years and future forecast 3‐year pricing were comparatively competitive. Additionally, the AGL supply agreement terms and conditions attached to the new contract allows full export of unused solar power. This will allow CPC time to gain important information and experience on how best to maximize the power generated at the 2.2MW Jervois solar farm.
The Jervois 2.2MW solar farm is due for completion by the end of the current year and once fully operational will offset approximately 40% of the variable power costs by using solar generated renewable power behind meter during daylight periods of operation at PS1.
Asset Replacement Fund.
CPC’s infrastructure, whilst still relatively early in its full useful life, is showing the impact of constant operational activity. There remains a need to ensure CPC accumulates sufficient funds for asset replacement in the future, which is crucial to the system’s longevity and continued ability to operate efficiently and cost effectively to meet shareholder needs.
An independent report by consulting engineers IPMG has indicated CPC should currently aim to set aside $300,000 annually from retained earnings to provide a fund for future asset replacements and refurbishments.
The asset replacement fund is required to ensure CPC has sufficient funds to maintain equipment in excellent working order to ensure continuity of water delivery. During the past two years we have experienced a significant flood risk event requiring extensive works to prevent flooding at PS1 and the resultant water quality and pressure issues caused PS2 main pumps to suffer serious leaking issues requiring several rebuilds during the irrigation season.
Taking all relevant factors into consideration and continuing inflationary pressure the CPC Board has determined to raise the water delivery pricing by $15/ML from the 1st of July 2024.
Customers should note that this price increase only recovers a half year of higher power prices. The effect of a full year of increased power process may require a similar price increase in F26. The performance of the solar farm may fund some of the required increase.
The 2024/25 fees are set out in the following table together with graphs showing historical water delivery fees since 2015.
Water Delivery Fees (GST exclusive) for 2024‐2025.
| Irrigation Region | Peak Fees 2024‐25 | Peak non‐take Fees 2024‐25 | Off Peak Fees 2024‐25 | Off Peak non‐take Fees 2024‐25 |
|---|---|---|---|---|
| Langhorne Creek (ML) | $255 $15 increase | $120 No change | $180 $15 increase | $10 No change |
| Currency Creek (ML) | $285 $15 increase | $120 No change | $195 $15 increase | $10 No change |
