The IVT account reflects the volume of undelivered Murray water in the Murrumbidgee, essentially water that is in the Murrumbidgee but is owed to the Murray and transferable when desired. Trade between the two zones can affect the IVT balance the following ways:
When the announcement of the IVT opening occurred on 1 November the price of water in the Murrumbidgee temporary market was $80 per ML, by the end of the week water in the region was trading between $95 per ML and $100 per ML, a 25% increase. In the below the Choke markets (Zones 7, 11 and 12) the change in price was not as dramatic, with temporary prices starting at $125 per ML and dropped to $110 per ML by the end of the week, a 8.3% price fall.
In the days and weeks leading up to the opening of the Murrumbidgee IVT it is expected that these two regions will reach price parity, or at least the price difference will be minimised.
On 1 November, 100% allocation was granted to Murrumbidgee General Security and High Security license holders and with it, an announcement that trade out of the Murrumbidgee Valley will be open on November 15. The IVT will be open due to the account balance being emptied due to spillage of the IVT water. This was the first time in a number of seasons that the full 100 GL balance will be allowed to be traded out of the Murrumbidgee Valley.
This 100 GL balance was filled almost immediately, with approximately 72.5 GL being transferred to the NSW Murray and the remaining 27.5 GL being transferred into the Victorian Murray, SA Murray and Lower Darling regions. Along with this an additional 32 GL of water was waiting in the transfer queue.
One potential reason behind this increase in the IVT balance since the announcement could be due to license holders with ‘grandfather’ tags transferring water out of the Murrumbidgee. ‘Grandfather’ tags are tagged licenses that were acquired prior to 22 October 2010 (Clause 12.23(2) of the Basin Plan) and are exempt from certain water trading rules, including rules set by the Murrumbidgee IVT.
Tagged trading complicates trading within the IVT as tagged trades deal with licence holders within valleys that nominate to extract their allocation under their entitlement in a different water source.
E.g. A licence in the Murrumbidgee may establish a tag to a pump in the Murray, such that Murray water is used but the Murrumbidgee account is debited. Water ordered under tagged licenses count towards the IVT balance, in a similar way to temporary trade between two locations. Under Clause 12.23 of the Basin Plan, water ordered under a tagged ‘water access entitlement’ is subject to the same restrictions as temporary trade and subject to the restrictions of the upper and lower IVT limits. As stated above the only exemption to this are ‘grandfather’ tags, meaning that some orders may legally be allowed to push the IVT account outside its upper and lower limits, potentially impacting Murrumbidgee water users.
Waterfind and your dedicated water account manager can assist in giving you the highest chance of success in moving your water out of the Murrumbidgee valley and into the NSW Murray market, to realise your water asset’s highest return potential. Call Waterfind on 1800 890 285.
To keep up to date with the current Murrumbidgee IVT account balance follow this link.