Understanding water allocations
A water allocation is an authority that entitles a Sunwater customer to a percentage of the water in a scheme’s dams, weirs or barrages, depending on the water that is available. The percentage of water allocation available to a customer can be as high as 100 per cent or as low as 0 per cent, depending on the level of water storages.
There are two main types of water allocations – high priority and medium priority. The priority group indicates the reliability of the water allocation and the frequency with which water can be supplied in full.
The ‘priority’ of water allocation is important in the water sharing rules of your water supply scheme. The rules specify how the available water will be shared between each of the water allocation priority groups throughout the water year.
High priority water
High priority water allocations are the most reliable water allocation and are typically used for town water supply, industrial use — including mining and power generation — and for high-value cropping. High priority water allocation holders can usually access water more frequently and with fewer restrictions than holders with medium priority water.
During extended dry periods, high priority water allocations are the last group to be placed on restrictions. High priority water allocation holders pay higher fees and charges than those with medium priority water allocations so they can have more reliable access.
Medium priority water
Medium priority water allocations generally have lower reliability than high priority water allocations and are mainly used for agriculture. This means during drier conditions, and when storage levels are low, these water allocations are the first to be restricted. Medium priority water allocation holders pay lower fees than those with high priority water allocation holders. The fees and charges for medium priority water allocation are regulated and set by the Queensland Competition Authority.
In most schemes, the lower cost and greater nominal volumes associated with medium priority water allocations means they are better suited for agriculture. However, some agricultural enterprises may choose to buy additional (limited) volumes of high priority water to mitigate risk e.g. to sustain permanent crops, such as trees, in times of water scarcity.
Conversion of allocation
Depending on the water supply scheme, water allocation trading rules may permit conversion of medium priority to high priority and vice versa, using conversion factors subject to limits that vary across catchments.