Goulburn-Murray Water has experienced a book loss of $95 million owing to depreciation and the cost of writing off the initial cost of assets.
The rural water authority’s annual report recorded the loss on a revenue of $185 million for the 2023-24 year.
G-MW said the net result was impacted by $90.3 million depreciation and amortisation expense, which is not fully recovered in the regulatory pricing and revenue setting framework.
Since 2006, the economic regulation of G-MW means that G-MW cannot put money aside for future capital works and can only recover the cost of works once they start being used. G-MW’s regulatory asset base is about $450 million compared to a statutory asset base of $5.2 billion
G-MW business and finance general manager Michael Gomez said the accounting standard used in G-MW’s annual report includes statutory depreciation of the assets G-MW inherited when the corporation was formed in 1994.
“The state government gave G-MW control of the assets when the corporation was formed but did not pass on the debts associated with these assets, meaning their statutory depreciation does not impact the revenue G-MW needs to generate to recover the costs of the services we provide to customers,” Mr Gomez said.
“As a non-profit corporation, we only generate the revenue required to cover these operating costs.
“The consistency of our prices since we provided customers with a 10 per cent decrease to their average bills in 2020 shows we are operating in a sustainable manner.”
The authority noted the total G-MW revenue of $185.1 million was higher than the prior year as a result of additional government grants including flood recovery funding of $6.9 million.
Expenditure is $35.4 million higher than the prior year, mainly due to an increase in assets decommissioned as the Water Savings Project reaches completion.
The authority reported that average prices, since 2019, had increased by less than inflation.
A new price strategy came into effect on July 1, with overall average prices expected to increase by less than one per cent over the next four years, excluding inflation.
G-MW handled more than 100,000 water orders and delivered more than 1.4 million megalitres of water during the 2023-24 season.
The authority finalised five prosecutions for breaches of the Water Act in the year.
Staff numbers increased from 439 in 2022-23 year to 448 full-time equivalent in 2023-24.
During the year the authority fielded 61 complaints, down from 67 the previous year.
The 13 directors who served during the year were paid a total of $928,000, which was slightly down on the previous year.