The ACCC has accepted a court-enforceable undertaking from Murray-Darling Basin irrigation infrastructure operator, Cadell Construction Joint Water Supply Scheme Inc (Cadell), after it admitted to breaching the Water Charge Rules.
Cadell provides water delivery services in Southern NSW to about 35 customers. The Water Charge Rules apply to infrastructure operators in the Murray-Darling Basin, including Cadell, and provide price transparency for infrastructure access and related water delivery services.
In November 2023, Cadell gave notice to its customers that it was more than doubling its fixed charges for access to its infrastructure. It also sought to backdate the increase to 1 July 2023 by adopting a schedule of charges with retrospective application. Cadell then issued invoices to its customers based on the increased rates.
Following an investigation by the ACCC, Cadell admitted that it had breached the Water Charge Rules by levying charges it was not entitled to levy on its customers.
"Under the Water Charge Rules, operators must properly notify their customers of changes to charging arrangements. Operators cannot adopt a new schedule of charges that purports to come into effect retrospectively," ACCC Commissioner Mick Keogh said.
"This ensures that customers are aware ahead of time of the charges they may be liable to pay, as well as giving them the opportunity to consider their future liability to pay termination fees to the infrastructure operator."
"By levying charges that were listed on a schedule of charges that was not in effect at the relevant time, Cadell has breached its obligations as a provider of rural water delivery services in the Murray-Darling Basin," Mr Keogh said.
"This action should serve as a reminder to other water businesses, large and small, to be aware of and comply with their obligations under the Water Charge Rules that apply to them, or face ACCC action."
Cadell has cooperated with the ACCC investigation, admitting that it breached the Water Charge Rules and providing a court enforceable undertaking to address the ACCC's concerns in relation to its conduct. Cadell has undertaken not to engage in similar conduct in future.
A copy of the undertaking is available on the ACCC website.
Background
Cadell is a small, incorporated association based in Moama, NSW which owns and operates infrastructure for the delivery of water for the primary purpose of irrigation. Cadell is an irrigation infrastructure operator, which is a form of infrastructure operator under section 7 of the Water Act.
An infrastructure operator is an entity that owns or operates infrastructure for the storage, delivery or drainage of water for the purposes of providing a service to someone who does not own or operate the infrastructure. An irrigation infrastructure operator is an infrastructure operator that owns or operates water service infrastructure for delivering water for the primary purpose of irrigation.
Cadell levies fixed access charges and variable water delivery charges on its customers, as well as passing on to its customers the bulk water charges and water planning and management charges levied by WaterNSW.
The Water Charge Rules are made under section 92 of the Water Act and apply to infrastructure operators in the Murray-Darling Basin. The Water Charge Rules impose obligations on infrastructure operators which increase pricing transparency in the Murray-Darling Basin. They prohibit infrastructure operators from levying an infrastructure or planning and management charge unless the charge is specified in a schedule of charges which is in effect.
Under the Water Act, the ACCC is responsible for monitoring regulated water charges. It must also monitor and enforce compliance with the Water Charge Rules, and Water Market Rules. These rules are designed to free up water markets by reducing barriers to trade faced by irrigators and promoting pricing transparency and the economically efficient use of water resources and infrastructure assets.
The ACCC has issued guidance to help infrastructure operators in the Murray-Darling Basin understand their obligations under the Water Charge Rules.
