The Value of Water to the Queensland Government: A Note from Tony

IN all the controversy over management of dams in South East Queensland, it is worth considering the value of the resource to the nominal owners, the Queensland Government, who sell that water to consumers.

With the aid of the Wivenhoe dam capacity diagrams, it is possible to determine that during the recent major drought, Wivenhoe went from 100 percent down to its low point of 15 percent.  That took eight and a half years, and there were no restrictions, and water was always plentiful for every use, be that residential, commercial or industrial use.

The cost of that water at the time was also cheap, in fact, the cost was almost negligible. However, as that low point of 15 percent approached, firstly the Beattie Government, and then the following Bligh Government, started to ramp up the prices and impose progressively more draconian restrictions upon the consumption of that water.

At the same time, the Government also introduced measures and legislation to ‘secure our future water’ with the construction of a ‘water grid’, all this at enormous expense. The Water Minister at the time said that drought was the new norm we would all have to get used to, and that large dams like this would never be full again, adding that we all needed to pull together on this, and that all this expense was imperative if we were to have enough water. 

The cost to consumers for water usage was also ramped up, and here I’m not talking just minor inflationary upward pressures, but with the introduction of considerable increases for the cost of water.

There is a current forward plan for water costings which will be progressively staged in over the next (now) 6 years and at the end of that time water will cost consumers $2.75 per Kilolitre (KL).

Extrapolating that out from what it costs now until then, those costs will average around $2.25 a KL.  The current holdings of all dams in the South East corner water grid amount to 2.3 million Megalitres (ML), half of that alone stored behind a 100 percent full Wivenhoe.  That makes the current worth of that resource to the Queensland Government $5.2 Billion, in today’s dollars. 

It only stands to reason that the best practice for the Government is to have those dams as close to 100 percent as is possible to protect that huge income for the Government.  Anything above that 100 percent is flood mitigation capacity, and must be discharged into the rivers as soon as is practicable after the rain event that fills those flood mitigation compartments of some of those dams. However, any discharges will only take that specific dam level back to the 100 percent, and here you seriously wonder if this is not a Government directive, not to discharge to a point lower than that 100 percent.

With clever management of that water resource and the construction of a vast network of pipelines connecting major dams, then water can be moved from dam to dam to keep those major dams at, or close to 100 percent, which is the water supply total, and the water that is then sold to consumers, that Government resource, in effect, a ‘Tax on God’.

To reduce those major dam levels to a level where they can better mitigate large rain events that might cause flooding then becomes a case of flushing a valuable resource (for the Government) into the river and out into the ocean.

If (as shown by that chart in my previous post) the water in Wivenhoe took eight and a half years to get from 100 percent down to the low point of 15 percent with no restrictions whatsoever, then in the current mindset of the highest level of restrictions on water usage, that 100 percent now will take a lot longer to decay to that low level, even were we to enter another period of prolonged drought, and might even stretch out well beyond 10 years, if there is little, or even no rainfall whatsoever.

That’s not to say that lowering the level of Wivenhoe well down below 100 percent would have helped in this flood, because so much water went through the 5 gates at Wivenhoe, but the intent of the Government is plain to see here.  Keep those levels at or as close as possible to that 100 percent, because it is a source of large amounts of revenue for the Government.

Those water costs are the base price calculated at a rate of 140 litres per person per day.  Any water usage over and above that amount extrapolated out over the year becomes excess water usage and there is a (considerable) extra cost for excess water consumption, no matter who the consumer is, at the residential, commercial and industrial level.

Of that total water resource for the South East corner, half of it is contained behind the wall of Wivenhoe, so that monster dam contains water worth $2.6 Billion for the Government.
Now perhaps you can see why they maintain the level at 100 percent. 

PS  It seems that at SEQ Water Home Page, they have changed the way they explain the amount of water being released from Wivenhoe to now read as follows:
We are currently releasing 90 cubic metres per second through one gate and also using the hydro to release a total of around 100 cubic metres per second downstream for water supply purposes and dropping levels back to Full Supply Level.
 Wivenhoe Dam is currently 101.2%. Twin Bridges is inundated.
Depending on inflows, this flow will continue during this week.
Local Councils have been consulted in relation to the release strategy.

****************

For Tony’s earlier contributions scroll down here: http://jennifermarohasy.com/blog/author/tony/