Net trades out of Murrumbidgee ValleyNet trades out of Murrumbidgee Valley

Net trades out of Murrumbidgee Valley

(9) Trade of allocation (temporary trade). At the end of each month, NSW informs RMW of the net volume of trade of allocation out of the Murrumbidgee Valley to each other trading zone. The Murrumbidgee valley account is adjusted, as set out in sub-clause 6.1, by the full net 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.

(10) Trade of entitlement (permanent trade) – Exchange rate trade. The account would be adjusted for progressive net trade of entitlement out of the Murrumbidgee 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 Murrumbidgee allocation, and at the time the allocation is made. Alternatively the adjustments could be made as water is ordered and delivered. Either way, the account is adjusted for the full net value of the trade, as set out in clause 6.2.a. (Note that the adjustment would be at the reliability of Murrumbidgee high security; i.e. if the sale was of Murrumbidgee general security entitlement, it is converted to Murrumbidgee high security before leaving the valley, and the allocations and adjustments to the valley account calculated accordingly). Note: this paragraph is somewhat redundant, as no ER permanent trades have taken place, and under present intentions none will take place in the future.

(11) Trade of entitlement (permanent trade) – Tagged trade. As described in clause 9.3 there are two possible ways of adjusting the valley account – the “increase when allocated – adjust for under-use” method and the “increase when ordered – adjust for actual use” method. Method 2 has been chosen.

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, initially at least, Murrumbidgee irrigators will have access only to Murrumbidgee entitlement, whether located on the Murrumbidgee or elsewhere. Thus there will be no Murray (or any other) entitlement allowed to trade into the Murrumbidgee as back trade. This makes the accounting for permanent trade out of tagged entitlement simpler – the whole of the net trade out at the end of any year is relatively simple to identify.

• Unlike the Goulburn, there is no legacy of permanent trade our using exchange rates, because NSW has never allowed permanent inter-valley trade.

(12) As per Table 1, other accounts may need to be adjusted by the same volume, depending on the location of purchasers.