Pricing structure unfair for irrigators

How is it that forecasters got the figures so wrong?

THE price of coal might have been on an overall decline since early 2011, but electricity costs for irrigators have continued to increase.

This appears to be due to some bad forecasting which is now not only costing irrigators dearly, but threatening to undo a lot of gains made in water efficiency.

During the drought, many irrigators weren’t accessing water as much as normal, if at all, due to the lack of supply.

Many – in an effort to do the right thing from an efficiency and environmental perspective – also made the switch from flood or furrow irrigation to electricity-driven systems, such as laterals or drip where they had greater control over water application rates and accuracy, hence reducing water use.

However, few people foresaw the big increases in network charges which were put in place to cater for big predicted increases in forecast demand – demand which never eventuated.

How is it that forecasters got the figures so wrong, where electricity demand was expected to start climbing in 2011 and keep climbing, when in reality, actual demand for 2013-14 was less than the 2009-2010 financial year.

Meanwhile, irrigators are left holding the bill.

Some of the problem appears to be energy providers reducing off-peak windows, which reduces opportunities for irrigators to reduce their power usage costs.

Because they’re locked into using peak rates, this rubs salt into the wound of high delivery infrastructure costs.

Irrigators need a different classification which allows them access to cheaper energy rates to fit with the variable demands of when crops need watering.

More transparency is also needed around the high network costs and given demand has not increased, farmers should not have to foot the bill for other people’s poor planning.

With more infrastructure funding potentially to come from the Murray-Darling Basin plan, the issue around electricity network fees needs to be addressed or it will undermine the effectiveness of those changes.

Farmers have tried to do the right thing, but they are being burned at both ends.

Those who persist with water saving infrastructure are effectively carrying the cost at their own expense through higher energy bills – for society’s benefit.

FarmOnline
Andrew Norris

Andrew Norris

is the editor of The Land
A matter of opinionA selection of editorials from around the Fairfax Agricultural Media group covering the issues of the week.

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