Net trades out of Goulburn ValleyNet trades out of Goulburn Valley

Net trades out of Goulburn Valley

(1) Trade of allocation (temporary trade). At the end of each month, Victoria must inform the Authority of the net volume of trade of allocation out of the Goulburn Valley to each other trading zone. The Goulburn valley account is adjusted, as set out in sub-clause 6.1 of this protocol, by the full value of the sum of the trades.

NOTE: This clause applies irrespective of whether trade of entitlements is by exchange rate trade or by tagged trade.

(2) Trade of entitlement (Permanent trade) – Exchange rate trade. The account is adjusted for allocations to progressive net trade of entitlement out of the Goulburn as at the previous 1 July, plus increases in allocation after the date of permanent trade to entitlements traded in the current year, in accordance with the Goulburn allocation, and at the time the allocation is made. The account is adjusted for the full net value of the trade, as set out in sub-clause 6.2.a Note that if “unused” allocation is traded with a permanent trade, this is in principle a separate transaction on the temporary market.

(3) Trade of entitlement (permanent trade) – Tagged trade.

There are two possible methods for adjusting the Goulburn IVT account for tagged trades. Method 1 (presently used for exchange rate trade) would be to adjust the account based on allocations, and correct when actual use becomes known. Method 2 is to adjust the IVT account as each retail order is made on allocations arising from the traded entitlements, and make a further adjustment as soon as the individual retail usage is known. While the result of each method would in theory be the same at the end of the season, there are differences during the season.

Clause 6.2.b and 7.2 aim to implement method 2 (to be more consistent with the requirement of Appendix 2 that the adjustment be on the basis of use), while allowing for the use of estimates instead of orders where more practical.

Note that:

• In principle, under tagged trade the net trade in or out of each entitlement product and the usage of allocations from each entitlement product must be considered, and the result amalgamated into an aggregate net use.

• However it has been agreed that Goulburn irrigators will have access only to Goulburn entitlement, whether the entitlement is located on the Goulburn or tagged elsewhere. This is the only entitlement that can be guaranteed to be able to be delivered from Eildon. Thus there will be no Murray (or any other) entitlement allowed to trade into the Goulburn as back trade. This makes the accounting for permanent trade out of tagged entitlement simpler – the whole of the net trade out is relatively simple to identify.