Victoria has been working in partnership with New South Wales, South Australia and the Murray-Darling Basin Authority (MDBA) to improve how water trades are accounted between states, to better reflect the contemporary needs of the water market.

This work has led to three new methods to manage trade adjustments – the accounting adjustments that are made to states’ shares of water in storage in response to water users trading across state borders.

These improved methods will be trialled starting 1 July 2019 and will continue for three years. The changes better align trade adjustments with the location and the time of delivery of inter-state trade.

Currently, the practice is to make all trade adjustments between NSW and Victoria in Hume Reservoir. The three trials will allow trade adjustments in three new locations: in Dartmouth Reservoir, where inter-valley trade water is delivered to the River Murray, and in-stream for return flows.

The improvements are expected to increase opportunities for trade by reducing the frequency at which the NSW to Victoria trade limit rule is triggered, which would otherwise result in Victoria closing trade from NSW.

Under the trials, the Northern Victoria Resource Manager will calculate the risk of spill for the NSW to Victoria trade limit by including the risk of spill from both Hume and Dartmouth reservoirs, rather than just Hume Reservoir as has typically been the case prior to the trials.

A similar arrangement for allowing trade adjustments in Dartmouth occurred from September 2011 to June 2013. The special arrangement enabled trade between NSW and Victoria to continue during those years when Victoria may otherwise have restricted trade.

Changes under the trials are only to bulk-level processes. There are no changes to how individual trades are processed.

The trials will help deliver on Water for Victoria’s commitment to look for opportunities to refine and improve trading rules in northern Victoria.

The trials will be monitored to ensure the new processes are efficient and effective in supporting improved trade opportunities, while continuing to protect all water users and the environment.

The MDBA recently provided a media release announcing this collaborative work, and additional details on the trials can be found on the MDBA website here.