A group of North East water users who lost their legal challenge against water fees say their concerns around the clarity and determination of pricing remain unresolved and they are continuing to call for "fairer fees" for the state's 2000 plus small unregulated domestic diversion customers.

Porepunkah landholder Cameron Reid and fellow group members had appealed to the Victorian Civil and Administrative Tribunal (VCAT) to review water pricing set by the Essential Services Commission (ESC) for Goulburn-Murray Rural Water Corporation (GMW) from 2024 to 2028.

Their case argued there were "errors of fact" in the fees as they were based on assumptions of: annual inspections of each service point which didn't occur; deeming water usage as opposed to measuring by use of water meters; and the number of service points rather than the volume of water used drives the costs which relate to the fee, which was not correct.

The tribunal said it was not satisfied that any of the errors of fact relied upon by the applicants were established, but noted it "has reached no views regarding the fairness or otherwise of the determination under review".

Mr Reid told the Alpine Observer/Myrtleford Times last week that while VCAT had affirmed the pricing determination, the tribunal’s written reasons identify a number of important issues with how those prices were developed.

"The material before the tribunal showed that GMW had not clearly demonstrated that its charges reflect efficient costs, and that elements of the pricing model rely on assumptions that are not always supported by observable activity or verifiable data," he said.

"The decision also highlights limitations in GMW’s cost data and allocation methods, with some costs underpinning customer charges unable to be fully verified.

"The tribunal noted evidence raising uncertainty about the actual level of site inspections and monitoring activity, which form part of the justification for key fees."

Mr Reid said while the ESC reduced GMW’s proposed service point fee, it ultimately approved a pricing structure "where underlying issues with data, assumptions and cost allocation remain unresolved".

"VCAT made clear that it is not permitted to consider whether pricing outcomes are fair or equitable, and instead is limited to a narrow legal test," he said.

"As a result, the decision should not be interpreted as an endorsement of the fairness of current charges.

“This process has brought to light real concerns about how these charges are constructed.

"While the legal threshold for overturning the decision is very high, the underlying issues around transparency, evidence and fairness remain."

Mr Reid said the group is calling on both GMW and the ESC for the next pricing review process (2028 - 2032) to deliver clearer justification of costs, improved transparency, and a closer alignment between charges and actual services provided to small unregulated domestic diversion customers.

"Despite significant time, resources and consultation processes over many years, small unregulated diversion licence holders continue to raise the same fundamental concern...we're being charged for services that are either minimal or not delivered at all," he said.

"For many of these unregulated diversion licence holders, who primarily draw water for basic household use and receive no upstream water management services, the cost of simply holding a licence has become disproportionately high relative to any observable service.

"GMW has invested heavily in reviews, consultants and engagement processes, and licence holders have participated in good faith.

"However, the outcome has not changed.

"The current fee structures remain largely based on assumptions established more than a decade ago, at a time when small domestic diversion users had little meaningful input.

"The community is looking for a pricing framework that is transparent, evidence-based, and aligned with the level of service actually provided.

"For unregulated users, that must include recognition that no upstream water management is undertaken by GMW.

"After more than a decade, there is a strong expectation that this next review will finally deliver that outcome."

ESC, GMW respond to VCAT decision

In a statement provided to the Myrtleford Times/Alpine Observer, the Essential Services Commission said its decisions on water prices "follow a robust and transparent process, supported by detailed evidence and input from stakeholders".

"We also recognise the importance of clearly explaining how we arrive at those decisions," the statement read.

"We note the tribunal's comments and will have regard to them in future pricing decisions.

"We will also continue to consider feedback from stakeholders."

The ESC said as part of its 2024 decision on Goulburn Murray Water’s prices, it required GMW to improve its data collection and cost allocation for service point fees and diversion tariffs to support its next pricing submission for the 2028 review.

In response, GMW established a working group with customers to improve its data.

GMW general manager of water delivery services, Warren Blyth, told the Myrtleford Times/Alpine Observer that the organisation is "improving data collection and transparency for its diversions customers, including those on unregulated waterways, as part of a current review of the costs of providing services to these customers".

Mr Blyth said the Diversions Cost Review is "broadening the collection and accuracy of GMW’s data and testing the assumptions made in calculating all of its diversions tariffs".

“GMW has also established a Customer Reference Group to assist GMW in testing the assumptions underlying calculations of its diversions tariffs with a commitment to adjust prices and tariffs, as required.”

GMW expects the work of the Diversions Cost Review and Customer Reference Group to be completed in June this year.

GMW said its tariffs, approved by the ESC, reflect its costs of managing water resources, including an amount that reflects its costs of protecting customers’ access rights

and the environment.

GMW said the tariffs subject to the VCAT case decreased in 2025-26 to their lowest amount since 2021.

It said it will "always ensure that water use is managed sustainably, efficiently, safely and consistently with legal rights".