“THE 75 year Snowy Water Licence (issued in 2002) provides flexibility to Snowy Hydro to store and release the Scheme’s water resource for electricity production and derivative trading and sub-optimises the use of the water for irrigation, communities and the environment.
“It also falls short of providing optimum regulation of the combined Snowy Scheme, Murray and Murrumbidgee River storages.
“It needs to be extensively revised and fully integrated with the yet to be developed Murray – Darling Basin Plan so as to optimise the regulation of the combined Snowy and Murray – Darling systems.”
These are the conclusion of Max Talbot, former Executive Officer at Snowy Hydro, and Operations Engineer Snowy Mountains Council.
Mr Talbot recently updated a document ‘Snowy Hydro – The Business’ penned in 2008 and has generously given permission for me to publish this document as a four part series. Following is Part 3 – concerning Water Management.
Snowy Hydro’s rights and obligations, with respect to the Snowy Scheme’s water resource, are contained in a 75 year water licence issued to it on corporatisation in June 2002. The Licence is administered by the NSW Water Administration Ministerial Corporation.
Licence conditions include:
– The licence provides Snowy Hydro with rights over the collection, storage, diversion and release of the Scheme’s water.
– Licence term is 75 years, commencing June 2002.
– Required annual releases for irrigation (1 May to 30 April – the Water Year)
1062 gigalitres to the Murray River
1026 gigalitres to the Murrumbidgee River
a total release of 2088 gigalitres to be progressively reduced as environmental
releases are made as a result of irrigation savings.
– Required annual releases may be reduced in accordance with a relaxation clause (as a result of dry inflow conditions) and/or a flexibility clause (with agreement between the Ministerial Corporation and Snowy Hydro).
– Environmental release to the Snowy River
21% of average annual flows – 212 gigalitres by 2012
28% of average annual flows – 282 gigalitres – timing indeterminate – this additional 7% attracts a compensation payment to Snowy Hydro for lost income.
282 gigalitres represents around 530 GWH (gigawatt hours) in lost electricity generation.
– Snowy Montane Rivers Increased Flows – additional flows that must be allowed to pass through some regulating structures, increasing proportionally with Snowy River environmental flows, capped at 150 GWH of foregone electricity generation.
– Water stored in excess of required annual releases (known as ‘above target’ water some 300-400 gigalitres annually depending on inflows) can be stored and released at Snowy Hydro’s discretion.
– Snowy Hydro has the following water rights:
a. the right to collect, store and divert all the water from rivers and streams
within the Snowy Catchment,
b. the right to use the water to generate electricity and manage the water,
c. the right to release the water at times and in quantities as it sees fit provided
it complies with the Annual Water Operating (AOP)
– In preparing the AOP Snowy Hydro must consult with the Water Consultation and Liaison Committee (comprised of a nominee from each of the Commonwealth, NSW, Victorian governments, MDBC, NSW Department of Natural Resources and Snowy Hydro Ltd.) and consider advice in good faith. The AOP must include the maximum probable release from the Scheme, detailed on a quarterly basis.
– Snowy Hydro must submit the AOP to the Ministerial Corporation who must approve the plan and can only request an amendment if the plan is inconsistent with the Licence provisions.
– The Ministerial Corporation cannot require Snowy Hydro to amend the plan to require the release of above target water; as release of above target water is solely at Snowy’s discretion.
– There is no requirement in the water licence that compels Snowy Hydro to meet any specific pattern of releases within a water year. Snowy Hydro only has to do all things reasonably necessary to meet releases outlined in the plan.
– Apart from requesting amendments to the Plan and providing quarterly historical advice on inflows and releases Snowy Hydro has no obligation to keep either the Ministerial Corporation or MBDC informed of its intentions with respect to future release volumes nor the timing of releases.
– A Snowy Hydro Consultative Committee has been established to provide liaison between irrigator groups and the company – the Committee to be chaired by a NSW Irrigators Council representative. Whilst this provides irrigators with access to the Company it must be recognised that irrigators do not manage the water resource, State water agencies and MBDC have that responsibility.
– Whilst there are provisions in the licence to vary the licensees obligations, there are no specific penalties for failure to meet the licence conditions and the revocation provision is such that it can easily be avoided by the licensee.
– Whilst the licence is for 75 years it is subject to reviews, the first being after 5 years relating to Snowy River flows followed by a more general review on every tenth anniversary, however, there are no details on how such reviews are to be conducted.
The water licence is weighted towards the use of the Scheme’s water for electricity production and trading, it does not optimize the use of a scarce natural resource and it does not adequately regulate Snowy Hydro:
– because it is couched in terms such as ‘do all thing reasonably necessary’, ‘consider in good faith’ and to provide advice as to ‘likely range of releases’,
– because of Snowy Hydro’s total control over the storage and release of ‘above target’ water,
– because there is no requirement for Snowy Hydro to meet a specific pattern of water releases within a water year. For example, it has the right to release water into irrigation storages that are already full or spilling; for electricity production and trading.
– because of the limited extent that other parties can influence the content of the AOP,
– because of lack of any obligation on Snowy Hydro to provide up to date information on Scheme operations to water agencies responsible for regulation of down stream water storages.