PIONEER VALLEY WATER BOARD ANNUAL REPORT

Transcription

1 PIONEER VALLEY WATER BOARD ANNUAL REPORT 2014/2015

2 PIONEER VALLEY WATER BOARD CONTENTS Directors Review Constitution and Function 3 Location.. 3 Structure. 3 Management Structure 3 Administration 4 Staff. 4 Review of Operations 2014/ Key Achievements. 4 Operational Overview 4 Water Supply and Water Use.. 5 Infrastructure Performance... 7 Regulatory Environment. 8 Environmental Monitoring.. 9 Statistical Information.. 10 Appended Financial Statements

3 DIRECTORS REVIEW The Announced Allocation percentage for irrigation was set at 100% for the seventh consecutive year. A dry winter and spring saw Teemburra Dam drop from full supply level to around 86% of capacity prior to rainfall in December and January, recovering to the low 90 s in February and finishing at about 87% by the end of June. Total water use for the Water Year was 16,159 megalitres, which is 34% of total Nominal Allocation. This equals the second highest usage by irrigators in the last ten years, but is still less than half of the volumes applied in similarly dry years in the early 2000 s. The negative productivity outcome of this reduction in irrigation levels is concerning at a farm business and industry level, both. Discussions with irrigators point to high input costs, particularly electricity, as factoring heavily in decisions taken by farmers in with regard to their irrigation practices. In this regard, the unexpected decision by the Queensland Competition Authority in early July to keep transitional electricity prices at existing levels was a welcome one, however anticipated future increases and the impacts of foreshadowed demand based electricity tariffs from 2020 on pumping costs for the scheme s four major pumping stations remain very concerning. Following a meeting with Ergon Energy s CEO, a joint energy audit and performance improvement review of the Septimus irrigation scheme has been commissioned to investigate potential options. The study is ongoing, but preliminary indications are that the small efficiency improvements achievable within existing infrastructure constraints don t stack up under cost benefit analysis, and would not provide sufficient gains to avoid the threshold for demand based tariffs from The study also points to alternative energy generation options such as solar and diesel as cost prohibitive. The Board has joined with other stakeholders and lobbyists in the agricultural sector to continue to draw the gravity of the issue to the attention of electricity retailers and to appeal to Government. The conversion of Pioneer Valley Water Board to a dual co-operative structure stalled for the Water Year pending further amendments to legislation to facilitate the proposed arrangements. Amendment to the Water Act 2000 to provide for contractual arrangements between customers and the co-operative was adopted as the option to provide the same financial security as exists under the current statutory basis for the Board. This amendment was incorporated into a major review of the Water Act 2000 conducted during 2014 and was passed in Parliament in November The subsequent delay has been due to the need for Queensland Treasury approval for ex-gratia relief in relation to stamp duty on the transfer of assets. A significant achievement for the year was the major revamp of the Board s Asset Register for scheme infrastructure, and implementation of an Asset Maintenance Management System. The expanded register will allow for closer monitoring of individual assets within the scheme as many of them move well into their expected life periods. The maintenance management system will provide detailed maintenance costs and history for specific assets and will assist in budget preparations moving forward. The Queensland Government project investigating the potential for Local Management for eight SunWater channel irrigation schemes to move to local management arrangements (LMA) has resulted in four of those schemes, including the Eton irrigation scheme, moving on to Stage 3 of the process. This involves the establishment of special purpose vehicle companies to commence the transition to local management subject to irrigators and Government agreeing to final terms for the transfer. The Board continues to closely monitor progress, particularly for any potential to merge Eton with our scheme to maximise efficiency in both areas and to maintain affordability of irrigation water supply across the region. On behalf of the Board, we thank all members for their continuing support, particularly in payment of water charges in difficult financial times. We also acknowledge the continuing dedication of our staff in responding to the challenges they confront with operation of the irrigation water supply scheme. ANDREW CAPPELLO CHAIRMAN LAWRENCE BUGEJA DEPUTY CHAIRMAN 2

4 1.0 CONSTITUTION AND FUNCTION The Pioneer Valley Water Board is established under the Water Act The Regulation to establish the Pioneer Valley Water Supply Area and Board was gazetted on 28 June The inaugural meeting was held on 22 January Pioneer Valley Water Board holds a Distribution Operations Licence issued under the Water Act 2000 and holds Water Service Provider Registration Number SP 295 under the Water Supply (Safety & Reliability) Act The Board functions are: To distribute water supply to water allocation holders within the Pioneer River Water Supply Scheme by means of pump stations, pipelines, earth channels and through Cattle Creek, Palm Tree Creek, Pioneer River, Baker s Creek, Silver Creek and McGregor Creek. To operate infrastructure in the following areas - Palm Tree Creek, Septimus, Silver McGregor and Palmyra. To ensure that the continued operation and maintenance of the works is in accordance with the Pioneer Valley Resource Operations Plan To read water meters to measure the volume of water diverted from Board s works and watercourses as mentioned above. The Pioneer Valley Water Supply Area is described as the riparian area of Cattle Creek below Tannalo, Palm Tree Creek, Pioneer River and the four reticulation supply areas of Palmyra, Silver McGregor Creek, Septimus and Palm Tree Creek. The Area is shown on plan AP LOCATION The Principal office of the Pioneer Valley Water Board is located in Mackay, Queensland. Street address: Ground Floor, 120 Wood Street, Mackay Postal address: PO Box 275, Mackay, Queensland, 4740 Telephone: Facsimile: pvwater@pvwater.com.au Web: The Annual Report of Pioneer Valley Water Board is available from the Board s Office and on the Board s website ( 3.0 STRUCTURE 3.1 Management Structure The Pioneer Valley Water Board comprises five directors all of whom are appointed by Governor in Council. The Chairman is elected by the Directors and all Directors serve for a term of three years. Three Directors are elected by members. One Director is nominated by Mackay Sugar Limited One Director is nominated by the three elected Directors. The Directors of the Board for 2014/2015 were: Chairman Mr Andrew Cappello Elected (reappointed 8 October 2009) Deputy Chairman Mr Lawrence Bugeja Elected (reappointed 8 October 2009) Directors Mr Stephen Russell Elected (appointed 8 October 2009) Mr Clive Desbois Mackay Sugar Nominee (reappointed 8 October 2009) Mr Bill Cooper Nominated (appointed 8 October 2009) 3

5 As Pioneer Valley Water Board is in the process of dissolving and converting to an alternative structure, Ministerial approval has been granted for Directors to remain in place until that process is completed. 3.2 Administration Meetings of the Pioneer Valley Water Board 2014/2015 Ordinary Meetings 10 General Meetings 1 Special Meetings/Inspections 2 Pioneer Valley Water Board holds associate membership of Queensland Farmers Federation and membership of Irrigation Australia Limited. During 2014/15, the Board joined the National Irrigators Council. 3.3 Staff Pioneer Valley Water Board employs five staff as follows. Manager Administration Operations Mr John Palmer Mrs Judy Walsh Mr Greg Dawes Mr Richard Faulkner Mr Michael Boland (resigned 23 July 2014) Mr Edward Shadbolt (terminated 27 March 2015) Mr Albert Petersen Board Manager, John Palmer will commence long service leave from 14 September 2015 leading to retirement from his position in late An additional employee has been appointed to receive training during this period and allow for minimal disruption to operations with the manager s departure. 4.0 REVIEW OF OPERATIONS 2013/ Key Achievements Continued working with the Queensland Government for further legislation amendments to transition Pioneer Valley Water Board from a statutory basis to a co-operative structure. Provided submissions to the review of the Water Act 2000 Completed a major update of the Asset Register to provide details of individual asset items Completed development of an Asset Maintenance Management System Continued involvement with the Interim Board preparing a Business Proposal for the SunWater Eton distribution irrigation scheme to move to local management. Developed a Policy for replacement of water meters throughout the scheme. Entered into partnership with Ergon Energy to conduct an energy audit and performance improvement review for the Septimus Scheme in view of the impending steep rises in electricity costs. 4.2 Operational Overview Very similar weather conditions to those experienced in 2013/14 again saw irrigation water use at a level much lower than expected for the first half of the year. Again this is expected to have an impact on crop yield for the 2015 harvest. Wet season rainfall was also well below average but did not lead to any increase in water use. Increasing input costs for agriculture, particularly electricity continue to be cited as deterrents to irrigation water use by customers. 4

6 Water use for 2014/15 was only 34% of total allocation, a marginal increase from 29% in 2013/14. Sugar cane production in the Mackay Sugar Limited area for 2014 was around 5.5 million tonnes (up from 5.0 million tonnes in 2012/13). The sugar price for the year averaged approximately $ per IPS tonne (up from in 2013/14). Teemburra Dam commenced 2014/15 at full capacity. Dry seasonal conditions through spring and early summer saw releases from Teemburra Dam and, with minimal inflow, it dropped to 87% of capacity at 30 June The conversion of Pioneer Valley Water Board to a co-operative structure stalled for the year pending further legislation amendments to facilitate the proposed arrangements. Amendment to the Water Act 2000 to provide contractual arrangements between customers and the co-operative was adopted as the option to provide the same financial security as existed under the current statutory basis for the Board. This amendment was incorporated into a major review of the Water Act 2000 conducted during 2014 and was passed in Parliament in November The change of Government in early 2015 placed the Water Act 2000 review on hold. However the amendment pertaining to the Board conversion was proclaimed in February 2015 and allowed finalization of Distribution Arrangements that will transition to a Distribution Contract between the co-operative and customers when Pioneer Valley Water Board is dissolved. A discussion paper on the impacts of demand based electricity tariffs on pumping costs at the four major pumping stations was circulated widely. Demand based tariffs are to apply in the scheme from 2020 and would result in very steep increases in pumping costs. Following a meeting with the Ergon Energy CEO, a joint study was commissioned to conduct an energy audit and performance improvement review of the Septimus Scheme which would suffer the most impact under demand tariffs. The audit found that the existing pumping units are relatively efficient but that modern control technology could provide a small efficiency improvement. However, the improvement would not be sufficient to reduce total electricity consumption to below the threshold for the demand tariffs from The study also considered a number of options to reduce electricity consumption including converting to a solar power and diesel generator system and leaving the electricity grid. The costs of the alternative energy options are prohibitive. Large electricity consumers facing significant cost increases moving to demand tariffs from 2020 is a major issue for the agriculture sector and a number of agencies continue to lobby Government and electricity retailers for resolution. It is to be hoped that a satisfactory solution can be implemented to avoid further decrease in irrigation water use due to high electricity costs. The Queensland Competition Authority (QCA) again conducted a consultation process in the determination of regulated electricity pricing during 2014/15. The draft QCA determination proposed a 5% increase to Tariff 62. The final determination in early July 2015 that there would be no increase for 2015/16 was welcome news. In the main, scheme infrastructure performed satisfactorily over the course of the Water Year, with a small number of HDPE pipeline failures in the Palm Tree Creek and Septimus irrigation areas being a blemish worthy of notice. Failures have presented differently, with only two showing similarity in that they occurred at in-line reducers. Current in-line reducers are fabricated to present a less severe profile to flow in the pipe, and replacements are expected to have a longer life as a result. The Board has developed a policy on replacement of water meters in the scheme. This included a discussion paper circulated to customers for comments and will see old propeller meters replaced with electro-magnetic meters when the old meters fail. The costs are to be shared between customers and the Board. The other significant achievement for the year was a major revamp of the Asset Register for the scheme infrastructure and implementation of an Asset Maintenance Management System. The expanded register will allow for closer monitoring of individual assets within the scheme as many of them move well into their expected life periods. The maintenance management system will provide detailed maintenance costs and history for specific assets and will assist in budget preparations for future years. 4.3 Water Supply and Water Use Irrigation water supply into the Pioneer Valley Water Supply Area commenced on 1 July Volumes delivered to date are shown in Table

7 With Teemburra Dam at full capacity at the start of the year, and other in-stream storages all full, announced allocation was set at 100% under the Pioneer Valley Resource Operations Plan for the water year. Total water use for 2014/2015 was 16,159 megalitres which was all taken from Announced Allocation. Streamflow Allocation periods were not applicable for 2014/2015 with Announced Allocation at 100% for the full year. Table 4.1 Irrigation water delivered into the Pioneer Valley Water Supply Area 1997/98 onwards Water Year 1997/ / / / / / / / / / / / / / / / /2014 (Effective) Announced Allocation (ML) % of Nominal Allocation Start End * * * 51% * 64% * * 84% 100% % 30% 0 0 0% 0% % 63% % 100% % 100% (Net) Seasonal Assignments into Scheme / Carry Over (ML) Out of Allocation Supply (ML) Credit Allocation / Stream Flow Supply (ML) Total Volume Available Total Volume Delivered N/A % 0 0 N/A % N/A % N/A % N/A % ** N/A % ** % ** % % of Available Allocation Used ** 7746 N/A *** 34% ** N/A *** 12% 0 N/A *** 18% 0 N/A % 0 N/A % 0 N/A % 0 N/A % 0 N/A % 0 N/A % 2014/ N/A % * Reduced Allocation Availability in 97/98 and 98/99 occured during completion of scheme construction. ** Includes Industrial Reserve Allocation purchased into the scheme due to high demand or low initial Announced Allocation. The figure for 04/05 represents Industrial Reserve carried over from 03/04. *** Announced Allocation became available progressively over the year and was not necessarily available when required. The Availability / Usage percentage is therefore not a true reflection of demand. 6

8 Teemburra Dam was at 87% of capacity on 30 June 2015 and the scheme will have full allocation again available for 2015/2016. Figure 4.1 shows annual volumes delivered compared to available allocation for the period since commencement of the scheme in Figure Volumes delivered against available allocation (ML) since inception of PVWater Announced Allocation Credit Allocation / Stream Flow Out of Allocation Industrial Allocation Total Water Used Nominal Allocation 4.4 Infrastructure Performance Irrigation demand was minimal at the start of the year but very dry conditions from October saw steady demand until mid- January. Wet season rainfall was well below average with some irrigation demand from March to April However demand was below that expected considering the very dry conditions, with high input costs particularly electricity being cited as the major reason for customers not irrigating. Board infrastructure performed satisfactorily with only minimal supply interruptions for minor maintenance. Obtaining the required approvals including traffic control permits for maintenance of pipelines at Palm Tree Creek and Septimus extended the time required to complete pipe leak repairs where infrastructure is located in the main road corridor. After a number of years being inoperable, the failed Tannalo Offtake guard valve in the Palm Tree Creek scheme was finally replaced by SunWater. The pipeline can now, once again be remotely isolated quickly if a major pipe leak develops in the high pressure system. The following is an indication of the type of works undertaken in each scheme over the period. Palm Tree Creek SunWater replaced their Guard Valve at the Tannalo Offtake. Fittings on pressure reducing valves on Tannalo main upgraded following a failure leading to over pressurisation. Regular servicing of pressure reducing valve control system due to algae build up 7

9 Palmyra Repaired three (3) leaks in polyethylene pipe joints on Lateral 4 and one (1) on Lateral 3 Septimus Resealed roof of control building Rock stabilisation of two sections of bank of Bakers Creek Channel Investigated electrical interference with river water level sensor Resealed roof of control buildings and River and Re-lift Pump Stations Repaired leak at scour tee in polyethylene pipe in Lateral 5/1 Silver/McGregor Repaired leaking joint in concrete pipe on Upper Rising Main Replaced control units at Re-lift Pump Station following lightning damage Resealed roof of control building Repaired leaks in Surge Tank 1 Replaced air conditioners in control building Replaced fan in variable speed drive unit for Pump 2 Riparian Rock protection works at one farm access crossing. Excavation of pumping pools at sites stranded by continued deflation of the Mirani Weir inflatable dam. The rubber fabridams on Mirani and Dumbleton Weirs remain deflated following failure of the fabridam on Bedford Weir at Blackwater in December The low water level in Mirani Weir creates supply problems for irrigators along both Cattle Creek and the Pioneer River. SunWater has continued to meet the cost of excavation of temporary pumping holes with work under the supervision of the Board. SunWater have advised that the matter of reinstatement of the storage loss without the two fabridams will be reviewed at 5 yearly price path intervals or sooner if average water use in the scheme rises over 50% of available allocation. This approach has been accepted by the Department of Natural Resources and Mines. SunWater Network Services Plans are to include this information in regard to the fabridams and decreased total storage volume in eth Pioneer River Water Supply Scheme. 4.5 Regulatory Environment The Pioneer Valley Water Board is a Category 2 Water Authority established under Chapter 4 of the Water Act Pioneer Valley Water Board holds a Distribution Operations Licence issued under Section 107B of the Water Act 2000 Pioneer Valley Water Board holds Water Service Provider Registration Number SP 295 issued under Part 3 of Chapter 2 of the Water Supply (Safety & Reliability) Act 2008 and holds an approved Strategic Asset Management Plan (SAMP). The Board has been exempted from the requirements of Section 83 and Section 126 of the Water Supply (Safety & Reliability) Act 2008 being for System Leakage Planning and Drought Management Planning respectively. The Water Act 2000 provides power for the Minister for Natural Resources and Mines to extend the term of Water Resource Plans for up to 10 years past their scheduled review date. The Pioneer Valley Water Resource Plan was originally scheduled to expire in The Minister has now approved that the expiry of the Plan be extended to 19 December An amendment to the Pioneer Valley Resource Operations Plan was finalised during 2014/15. This is principally involved with management of underground water throughout the valley. 8

10 4.6 Environmental Monitoring Irrigation water supply by the Board was initially carried out under the Teemburra Dam and Irrigation Project Environmental Management Plan that was put in place when the scheme commenced. During 2014/15 Reef Catchments Mackay Whitsunday Inc. carried out further monitoring under a subsequent approved monitoring program. The monitoring program for the scheme focuses on three main areas quality of release water, changes to flow regime and stream bank condition. Water quality sampling under the program was carried out in October, November and December 2014 and in May and June The following are the Conclusions and Recommendations from the report on this monitoring. As in previous years, no direct negative impacts on water quality or streambank erosion from the irrigation scheme were identified during the monitoring period. Despite very low average rainfall and low flows, the water quality was maintained at the sampling sites, which is probably an indication that irrigation releases may help maintain elements of stream bank health related to consistency of flow. No fish kills were reported in the monitoring area during the year. Comparison of the Channel Stability Ranking Scheme scores between and previous years indicates that the channel stability has generally stayed the same at these three localities. Ongoing monitoring of channel stability is recommended, since the Channel Stability Ranking Scheme is intended to show changes over extended periods. The following table shows the sampling results at the three key sites for the program. Table Environmental sampling data 25 June 2015 Parameter Water Temperature ( o C) Water Quality Objectives Cattle Creek at Tannalo Results 25/06/15 Silver Creek at Dunwold- Lumburra Road Bakers Creek at Pleystowe School Road NA ph Dissolved Oxygen (%Saturation) Electrical Conductivity (μs/cm) Clarity (NTU) NA 28.8 < Total Dissolved Solids (mg/l)

11 5.0 STATISTICAL INFORMATION Table 5.1(a) PVWater statistical information AREA WATER ALLOCATIONS NOMINAL ALLOCATION ML VOLUME SUPPLIED 2014/15 ML Access Charge $/ML 2014/2015 CHARGES Usage Charge $/ML Total Charge $/ML Levy $/ML Riparian ,300 7, Palmyra 51 5,970 1, Pipeline Creek 4, Septimus 33 3,928 2, Pipeline 4,445 2, Cattle Creek 2, Distribution Losses TOTALS ,390 16, Table 5.1(b) PVWater statistical information Total area served - 22,000 hectares (approx.) Total pipeline length - 35 kilometres Total channel and watercourse length kilometres 10