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Last Updated: Thursday, 23 November 2023 13:48

Water system costs

Every year Council, with the assistance of the Queensland Treasury Corporation (QTC), reviews it’s projected costs to determine the revenue requirements and water pricing to ensure we can continue to provide water and maintain services to our Region.

These costs are often referred to as ‘building blocks’ and include:

Operating costs – cost to operate and maintain the water supply network (including labour, goods and services, maintenance and administration).

Return of capital – cost to renew and replace components of water infrastructure as they reach the end of their lives (depreciation expense).

Return on capital – return on the community’s investment in water infrastructure, plus any financing costs associated with water debt.

These ‘building blocks’ form part of what is called ‘full cost recovery’ for local government water and sewerage business activities.

As the water supply requires significant infrastructure, water system costs are largely fixed, only 8% of our water supply costs vary directly with the volume of water produced (e.g. electricity, chemicals). This is because most water system costs relate to the capital investment required to maintain and upgrade water supply infrastructure.

 

Our water infrastructure assets

Council owns and operates our Region’s water supply system, providing treated drinking water to over 65,000 properties. Water is sourced from a mix of dams, weirs and bores (in addition to the Wivenhoe pipeline).

Our extensive network of infrastructure assets and their percentage contribution are detailed below:

Breakdown of Water Assets as at 30 June 2022

 Asset Percentage 
 Pipes/water mains  50%
 Bores/dams/weirs  28%
 Wivenhoe pipeline  8%
 Reservoirs  5%
 Pump stations  4%
 Treatment plants  4%
 Land/other  1%

 

toowoomba regional council breakdown of water assets

Source: Toowoomba Regional Council. Written Down Asset Values as at 30 June 2022.

Compared to other Council areas, the water infrastructure required to service our Region is more extensive including both water sourcing (bores, dams and weirs) and water delivery (water mains and pipes).

The Wivenhoe pipeline represents just 8% of water assets and forms part of the overall water supply security solution for our Region.

 

Influence of the Wivenhoe Pipeline

The Wivenhoe pipeline was constructed in 2010 at a cost of $187 million. To deliver the project, we received funding help through a Queensland Government subsidy of $112.2 million and obtained a 20-year loan from the Queensland Government to the value of $60.856 million.

What are the ongoing costs of the pipeline?

Even though the construction of the Wivenhoe pipeline is complete, there are ongoing costs associated with the project.

These costs include:

  • A SEQWater fixed charge for access to water from Wivenhoe Dam when required.
  • A SEQWater usage charge when water is pumped from Wivenhoe Dam.
  • A SEQwater drought tariff that applies when SEQwater is in drought conditions (eg: SEQwater grid dams below 60% or otherwise in a drought response status).
  • Pumping costs to deliver the water to Cressbrook Dam.
  • Maintenance of the pipeline, pumps and related infrastructure.

Who contributes to the costs of the pipeline?

Only customers of the bulk water supply scheme contribute to the ongoing costs associated with the Wivenhoe pipeline. Customers on the non-bulk water supply schemes don’t contribute to the pipelines costs as water access is through other sources.

What effect does the pipeline have on current water charges?

As part of its recent review of our water charge structure, AEC Group completed an assessment of how the Wivenhoe pipeline influences current water charges. Annual costs associated with the Wivenhoe pipeline account for around 10% of the total cost recovery requirement for the bulk water supply scheme, or $115 for an average household.

Will water charges decrease when the loan is paid off?

Even when our loan from the Queensland Government for the Wivenhoe pipeline is paid off, bulk water supply charges still need to fund maintenance and renewal of the pipeline, pumps and related infrastructure. Such works are essential to ensure ongoing water security for the Toowoomba Region.

 

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