WHAT do think about drinking more desal water in years to come?
If you listen to the hand-picked group of people who were assembled in the Leongatha Memorial Hall meeting room last Saturday morning, you’d have no problem with the idea.
In fact, the group voted 48 per cent in favour of Option D, buying an additional 2.5 gigalitre bulk entitlement of desal water, from Melbourne Water annually, to be made available from 2024.
But those people were each paid $100 by South Gippsland Water just to turn up and participate in the Community Planning Session.
No wonder the tables in Meeting Room One were full!
Would the money they received have made a difference to how they voted?
Other options included buying no additional water from the desal plant, buying a further 1GL or going the whole hog and buying an entitlement of 4GL – at an up-front cost of $1.6 million plus $2.8m each year if we use it.
All options have implications, according to South Gippsland Water Managing Director Philippe du Plessis who conducted last Saturday’s consultation session.
“We have already bought 1 gigalitre (of desalination water) and put up $400,000 to secure it,” Mr du Plessis said.
“We currently sell about 5GL of water a year and through growth we’ll need 20 per cent more, or 1GL extra, in 10 years’ time but it’s a matter of what else we want to do to secure our water supply into the future.
“Some might say ‘that will see me out, I’d rather not pay more’, but it’s also a matter of what we do for future generations.
“When the desalination plant came up, we were given the option of buying 5GL by 2024. We’ve already taken up the option of 1GL but if we decided to get, say, 2GL more it will cost us an additional $400,000 per gigalitre to secure ($800,000). There’s also a fixed cost of $400,000 per GL each year, whether we use it or not, and another $300,000 per gigalitre if we take it.
“In the scheme of things, paying $300,000 per GL is peanuts.”
It’s a virtual reservoir, he says.
But buying desal water isn’t the only option, according to Mr du Plessis. Building another dam, buying a ground water licence, increasing capacity, encouraging water users to use their own tanks and other ideas would be canvassed but the desal water option stacks up well on price and efficiency, he says.
The impact of climate change will also play its part.
“Whatever we decide to do, and that’s why we are taking this discussion to the community, we have to decide by June 30, 2024 and it also affects our planning from now on.
“If we don’t decide to secure more desal water, we’ll be OK for the next 10 years but after that we’d have to buy off a variable market and it will be much more expensive.
“But once we decide, we’ll be locked into that cost structure.”
Fortunately, according to Mr du Plessis, buying water from the desal plant roughly equates to the cost of capturing and treating your own water for use, like we do now with the Lance Creek Reservoir.
The decision to take more desal water directly effects customers connected to the Lance Creek system; Inverloch, Cape Paterson and Wonthaggi water users, together with those in the northern towns of Korumburra, Loch, Poowong and Nyora recently connected to the Lance Creek system, who will receive the cocktail of desal and naturally harvested water.
Leongatha water customers might also get to taste desal water if, as planned, their Ruby Creek system is connected by pipe to Melbourne Water via Korumburra and the Lance Creek system.
But it will also impact the authority’s other customers, for good or bad, by locking us all into a cost structure and by making SGW more reliant on the processes of Melbourne Water and the vagaries of the Victorian Desalination Plant.
New office and water rates?
South Gippsland Water has some other pressing issues in the pipeline including preparing its next submission to the Essential Services Commission by this November, outlining future works, required service levels and the income from rates and grants needed to do the work.
The authority already has approval for a 9%-10% increase in rates, but whether this will be enough depends on decisions to be made between now and then.
Mr du Plessis said a decision about where to locate the authority’s headquarters, stay in Foster or go somewhere else, was on the backburner for now, but hopefully decided by the end of the year.
He agreed it could cost $7.5m to $8m to relocate but also $6m to stay at Foster with trailing inefficiencies bringing such a decision into question.
For more information on the price review and planning process, visit http://www.sgwater.com.au/Pricing_Review