Glossary

Irrigation Price Review

Sunwater is developing a customer engagement plan for the Irrigation Price Review (IPR4), which will help inform irrigation prices from 1 July 2029 to 30 June 2033. The proposal is expected to be submitted to the Queensland Competition Authority (QCA) in late 2027.

Annuity contribution	A revenue allowance to recover infrastructure renewals expenditure across a 30-year period (in net present value terms) as a constant annual amount. Requires a 30-year forecast of expenditure.
Asset renewal	The rehabilitation, refurbishment, overhaul or replacement of an existing asset, or a significant component of an asset. Undertaken to restore service potential, capability and performance and extend the useful life of the asset.
Capital expenditure (capex)	All expenses incurred by a business in acquiring or maintaining fixed assets such as land, buildings and equipment.
Community Service Obligation (CSO)	A government requirement to provide public services to all citizens regardless of business cost. CSOs commonly apply to utilities, healthcare and postal services.
Consumer Price Index (CPI)	A measure of inflation. Various calculations of CPI are used during a pricing review, generally for the purpose of ensuring a business is compensated for uncontrollable economy-wide changes to the cost of inputs over time.
Corrective maintenance	Maintenance activities following the identification of a fault, defect, damage or performance shortfall. Undertaken to restore an asset to its required operating condition, functionality or performance.
CSO payment	A Queensland Government payment. When customer prices are set below what is needed to recover costs, the CSO payment covers the gap.
Electricity	The electricity required to operate and support water supply infrastructure, enabling the storage, movement, monitoring and delivery of water to our customers.
Fixed charges (Part A/Part C)	A price per megalitre for the amount of water access entitlements held. Intended to recover the fixed costs for operating, maintaining, administering and renewing the bulk water supply scheme (Part A charges) or distribution system (Part C charges).
Infrastructure renewal costs	Costs associated with extending the life of long-term assets. These may include preventative maintenance and/or the building of new assets.
Inspector-General Emergency Management (IGEM)	An emergency management regulatory role. IGEM leads continuous improvement in emergency management. IGEM is responsible for reviews and audits of emergency management activities in Queensland Government departments and utilities.
Insurance	A program of policies that cover loss or damage to Sunwater assets and third party claims e.g. for financial loss, property damage or personal injury.
Operations	Labour, materials, plant, equipment and facilities associated with operating assets that store, transport and deliver water services to our customers.
Operating expenditure (opex)	All expenses related to operational activities such as general maintenance, electricity, insurance and staff costs.
Preventative maintenance	Planned maintenance activities to preserve asset condition, reliability, functionality and performance. Undertaken to prevent or reduce the likelihood and impact of faults, failures or excessive deterioration.
Queensland Competition Authority (QCA)	The economic regulator in Queensland tasked with ensuring monopoly businesses do not abuse their market power. QCA does this through price setting or monitoring roles across industries like water, rail, energy and ports, ensuring prices are competitive and access is fair.
QCA guidance	The formal guidance issued by QCA to set the parameters and expectations for a price submission.
Referral Notice	The authority issued to QCA by the Queensland Treasurer under sections 23 and 24 of the Queensland Competition Authority Act 1997 to investigate irrigation pricing practices.
Regulatory period/price path period	The period of time over which QCA makes a revenue and pricing recommendation for a regulated business. The irrigation price review period sets prices for four years.
Revenue allowance	The amount of revenue needed to recover the cost of a specific service element.
Service and performance plan (S&PP)	Plans detail a range of actual and forecast costs and activities. S&PPs are prepared annually for each irrigation service contract area.
Support services	Services and functions required to operate a modern, safe, compliant and regulated business. These are managed regionally or centrally and support all water supply schemes, but cannot be directly linked to a specific asset or service. These are split into centralised, corporate and local support services.
Tariffs	Prices assigned to water services provided by a public utility.
Target prices	Regulated prices set to achieve the lower-bound revenue recovery. Sunwater will propose target prices for each tariff group in its price submission.
Variable charges (Part B/Part D)	A price per megalitre of annual usage, intended to recover the variable costs associated with the delivery (usage) of water from a bulk water supply scheme (Part B charges) or distribution system (Part D charges).
Weighted average cost of capital (WACC)	A method of determining the rate of return a business should earn on its investments. WACC is the method that regulators typically use to determine what a reasonable rate of return is. The rate of return is a critical input into the annuity contribution.
Water access entitlements (WAE)	A set volume of water that a customer holds the rights to. This is a share of the total amount of water in a system. WAEs can have different priorities that can be priced differently. Customers pay more for high priority entitlements because they are available more often. Medium priority entitlements are the first to be placed on restrictions in drier periods.