(2) The Authority must adjust each annual diversion target by following any protocol made by the Authority under paragraph 6(1)(a) of the Schedule, to implement the Stages set out below.
Stage 1
Adjust annual diversion targets, as far as possible by allocating to the cap required in a designated river valley of destination, so much of the volume of cap no longer required in the designated river valley of origin as is required in the designated river valley of destination. A separate calculation must be made for the interaction between each designated river valley and every other designated river valley, based on information collated from the Transfer Register.
Stage 2
Pool any cap surpluses and deficits calculated under Stage 1 in relation to each designated river valley, in order to reduce any shortfalls in each designated river valley.
Where lower reliability entitlements have been converted to higher reliability entitlements within a designated river valley, the net effect of that conversion on the cap attributable to that valley must be included in the pool. However:
(a) a shortfall within a designated river valley caused by such conversions cannot be reduced by attributing a surplus existing in another designated river valley; and
(b) the volume pooled with respect to a designated river valley cannot exceed the sum of the deficits arising in other designated river valleys, as a result of transfers between that designated river valley and other designated river valleys.
Stage 3
(a) Calculate any cap surplus resulting from Stage 2 for each designated river valley.
(b) Then allocate any of that cap surplus that is attributable to interstate transfers into or from that designated river valley to the environment, by
(c) reducing the annual diversion target for that designated river valley by the portion of the surplus referred to in paragraph (b).
The allocation referred to in paragraph (b) must only apply in the year in which it is made and will not create an entitlement to draw a comparable volume of water from any storage in the Basin. Progressively reducing annual diversion targets will, however, eventually allow more water to flow downstream.
Stage 4
Calculate the adjustment to each annual diversion target for each designated river valley by determining the sum of the total adjustments made under Stages 1, 2 and 3.
SCHEDULE E—CAP ON DIVERSIONS
1. Purposes
The purposes of this Schedule are:
(a) to establish long‑term caps on the volume of surface water used for consumptive purposes in river valleys within the Murray‑Darling Basin (including, without limitation, water from waterways and distributed surface waters) in order to protect and enhance the riverine environment; and
(b) to set out action to be taken by the Ministerial Council, the Authority and State Contracting Governments to quantify and comply with annual diversion targets; and
(c) to prescribe arrangements for monitoring and reporting upon action taken by State Contracting Governments to comply with annual diversion targets.
2. Definitions
(1) In this Schedule, except where inconsistent with the context:
“baseline conditions” means:
(a) in the case of New South Wales and Victoria, means the level of water resource development for rivers within the Murray‑Darling Basin as at 30 June 1994 determined by reference to:
(i) the infrastructure supplying water; and
(ii) the rules for allocating water and for operating water management systems applying; and
(iii) the operating efficiency of water management systems; and
(iv) existing entitlements to take and use water and the extent to which those entitlements were used; and
(v) the trend in the level of demand for water within and from the Murray‑Darling Basin
at that date; and
(b) in the case of Queensland, means the conditions set out for each river valley in the Resource Operation Plan first adopted by the Government of Queensland in that river valley and published in the Queensland Government Gazette.
“Cap Register” means the Register referred to in sub‑clauses 13(7) and 13(8).
“designated river valley” means a river valley or water supply system referred to in, or designated under, sub‑clause 3(1).
“diversions”, with respect to a river valley, means the volume of surface water used for consumptive purposes determined in accordance with the formula entered in the Diversion Formula Register for that river valley.
“Diversion Formula Register” means the Register referred to in paragraph 4(1)(b).
“former Schedule” means Schedule F of the former Agreement.
“historical data” means data relevant to the period from 1 July 1983 to 30 June 1994, or such other period as the Authority may from time to time determine.
“river valley” means a river valley within the Murray‑Darling Basin referred to in sub‑clause 3(2).
“water year” in relation to a river valley or a water supply system means the relevant 12 month period applicable to the allocation of water entitlements and measurement of diversions in that river valley or water supply system.
(2) In this Schedule:
(a) a reference to the “Government of a State” includes a reference to the Government of the Australian Capital Territory;
(b) a reference to a “State Contracting Government” includes a reference to the Government of the Australian Capital Territory;
(c) a reference to “State” includes the Australian Capital Territory.
3. River Valleys and Designated River Valleys
(1) Subject to sub‑clause 3(3), the river valleys or water supply systems listed in Appendix 1 are “designated river valleys” for the purposes of this Schedule.
(2) Subject to sub‑clause 3(3), the river valleys listed in Appendix 2 are “river valleys” for the purposes of this Schedule.
(3) The Ministerial Council may, from time to time:
(a) amend the description of:
(i) any designated river valley described in Appendix 1; or
(ii) any river valley in Appendix 2;
(b) designate, for the purposes of this Schedule, any river valley or water supply system not referred to in Appendix 1; or
(c) add any river valley to those set out in Appendix 2.
4. Diversion Formula Register
(1) The Authority must:
(a) determine a formula for calculating diversions within each river valley for the purposes of this Schedule; and
(b) maintain a Diversion Formula Register which records each formula determined under paragraph (a) and the river valley to which the formula relates.
(2) The Authority or States, as may be appropriate, must use the formula entered in the Diversion Formula Register with respect to a river valley for the purpose of:
(a) developing or approving any analytical model under clause 11;
(b) making any calculation under clause 12;
(c) preparing any report required under clause 13; and
(d) maintaining the Cap Register.
(3) The Authority may from time to time amend:
(a) any formula determined under paragraph 4(1)(a); and
(b) any entry in the Diversion Formula Register.
5. Long‑term diversion cap for New South Wales
(1) The Government of New South Wales must ensure that diversions within each designated river valley in New South Wales do not exceed diversions under baseline conditions in that designated river valley, as determined by reference to the model developed under sub‑clause 11(4).
(2) In calculating baseline conditions for the Border Rivers, allowance must be made for such annual volume as the Ministerial Council may, from time to time, determine in view of the special circumstances applying to Pindari Dam.
6. Long‑term diversion cap for Victoria
(1) The Government of Victoria must ensure that diversions within each designated river valley in Victoria (including the upper River Murray) do not exceed diversions under baseline conditions in that designated river valley, as determined by reference to the model developed under sub‑clause 11(4).
(2) In calculating baseline conditions for either or both of the Goulburn/Broken/Loddon water supply system and the Murray Valley water supply system, allowance must be made for an additional 22 GL per year, or such other annual volume as the Ministerial Council may, from time to time, determine in view of the special circumstances applying to Lake Mokoan.
7. Long‑term diversion cap for South Australia
(1) The Government of South Australia must ensure that diversions from the River Murray within South Australia:
(a) for water supply purposes delivered to Metropolitan Adelaide and associated country areas through the Swan Reach‑Stockwell, Mannum‑Adelaide and Murray Bridge‑Onkaparinga pipeline systems do not exceed a total diversion of 650 GL over any period of 5 years;
(b) for Lower Murray Swamps irrigation do not exceed 94.2 GL per year;
(c) for water supply purposes for Country Towns do not exceed 50 GL per year; and
(d) for all other purposes do not exceed a long‑term average annual diversion of 449.9 GL.
(2) The Government of South Australia must ensure that:
(a) no part of any entitlement created in South Australia with respect to the diversion referred to in paragraph 7(1)(a) is either used, or transferred for use, for any purpose other than use in Metropolitan Adelaide and associated country areas; and
(b) at least 22.2 GL of the diversion referred to in paragraph 7(1)(b) is reserved for environmental purposes and is not transferred,
unless the Ministerial Council determines otherwise.
(3) If the Government of South Australia supplies any of the diversions referred to in paragraph 7(1)(d) through the Swan Reach‑Stockwell, Mannum‑Adelaide and Murray Bridge‑Onkaparinga pipeline systems in any year, it must:
(a) record the volume of water so delivered for that purpose in that year; and
(b) account for that volume against the long‑term average annual diversion referred to in paragraph 7(1)(d), when monitoring and reporting to the Authority under clause 13.
8. Long‑term diversion cap for Queensland
The Government of Queensland must ensure that diversions from each designated river valley in Queensland do not exceed diversions under baseline conditions in that designated river valley, as determined by reference to the model determined under sub‑clause 11(4).
9. Long‑term diversion cap for the Australian Capital Territory
(1) The Government of the Australian Capital Territory must ensure that diversions from the designated river valley in the Australian Capital Territory do not exceed 40 GL per annum (being 42 GL minus 2GL saving allocated to the Living Murray), varied as required by sub‑clause (2).
(2) The long‑term diversion cap referred to in sub‑clause (1) is to be annually adjusted:
(a) for the prevailing climate during the water year by reference to the model developed under sub‑clause 11(4); and
(b) to account for growth in population, in accordance with the following formula:
0.75
multiplied by:
2006/07 per capita consumption of the population of Canberra and Queanbeyan
multiplied by:
the difference between the population of Canberra and Queanbeyan in 2006/07 and the population of Canberra and Queanbeyan for each year in consideration.
(3) The Government of the Australian Capital Territory must ensure that no water or water entitlement that is used for urban purposes will be transferred for use outside the Australian Capital Territory unless that water or water entitlement has been transferred for use within the Australian Capital Territory from another State.
(4) If demand for water for industrial uses or uses by the Commonwealth grows beyond the level of demand in 2006/07, that growth in demand will be met by transferring water or water entitlements from another State.
(5) The Authority must, for the purposes of maintaining the Cap Register referred to in sub‑clauses 13(7) and 13(8), take into account 107 GL of cumulative Cap credit existing at the end of 2006/07.
10. Power of Authority to alter long‑term diversion caps
(1) Subject to sub‑clause 10(2) the Ministerial Council may, on the recommendation of the Committee, make protocols determining how the Authority may alter any long‑term diversion cap referred to in this Schedule.
(2) The Authority, from time to time:
(a) must alter a long‑term diversion cap to reflect the result of transferring water entitlements or allocations within a State or between States, in accordance with any protocols established under Schedule D; and
(b) may only alter a long‑term diversion cap to account for environmental water under Cap in accordance with a protocol made under sub‑clause 10(1).
11. Developing Analytical Models
(1) The Authority must develop analytical models for determining the annual diversion targets for the upper River Murray.
(2) Subject to sub‑clause 11(1), the Governments of New South Wales, Victoria, Queensland and the Australian Capital Territory must each develop analytical models for determining the annual diversion target for each designated river valley within the territory of that State.
(3) The Government of South Australia must develop analytical models for determining the annual diversion target for diversions referred to in paragraphs 7(1)(a) and (d).
(4) An analytical model developed under this clause:
(a) must simulate the long‑term diversion cap in the relevant designated river valley; and
(b) must be tested against relevant historical data to determine the accuracy of the model in estimating the annual diversion; and
(c) must be approved by the Authority before it is used to determine an annual diversion target under this Schedule; and
(d) may, from time to time, be modified in such ways as the Authority may approve; and
(e) must be used to determine the average annual diversion under the conditions of the relevant long‑term diversion cap determined under this Schedule for either:
(i) the period between the start of the 1891 water year and the end of the 1997 water year; or
(ii) such other period as may be approved by the Authority.
(5) The Authority may only approve an analytical model or a modification to an analytical model if the Authority considers that the model, when approved or modified, will fairly determine the relevant annual diversion target given the climatic conditions experienced in any year.
12. Calculation of annual diversion targets
(1) Within two months after the end of the relevant water year and using the analytical models developed and approved under clause 11:
(a) the Authority must calculate the annual diversion targets for New South Wales and Victoria for that year for the upper River Murray; and
(b) subject to paragraph (a), the Governments of New South Wales, Victoria, South Australia, Queensland and the Australian Capital Territory must, for each designated river valley within the territory of that State, calculate the annual diversion target for that year.
(2) The Authority must promptly inform the Governments of New South Wales and Victoria of the results of every calculation made under paragraph 12(1)(a) with respect to the upper River Murray.
(3) The Government of New South Wales, Victoria, South Australia, Queensland and the Australian Capital Territory, respectively, must each promptly inform the Authority of the results of every calculation made by it under paragraph 12(1)(b).
13. Monitoring and Reporting
(1) Each State Contracting Government must, for each water year and in relation to each river valley specified in Appendix 2 within its territory, monitor and report to the Authority upon:
(a) diversions made within and to; and
(b) water entitlements, announced allocations of water and declarations which permit the use of unregulated flows of water within; and
(c) trading of water entitlements within, to or from,
the territory of that State in that water year.
(2) Each State Contracting Government must, for each water year and in relation to each designated river valley within its territory, monitor and report to the Authority upon:
(a) the compliance by that State with each relevant annual diversion target calculated under this Schedule for that water year; and
(b) such actions which the State proposes to take to ensure that it does not exceed the annual diversion targets calculated under this Schedule for every ensuing water year.
(3) For the purpose of sub‑clauses 13(1) and (2) the expression “river valley within its territory” in relation to Victoria, includes that portion of the upper River Murray forming the border between Victoria and New South Wales.
(4) A report under sub‑clause 13(1) or (2) must be given to the Authority within four months after the end of each relevant water year or by such other time as the Authority may determine.
(5) On the basis of the calculations referred to in sub‑clause 12(1) and reports given to it under sub‑clauses 13(1) and (2) the Authority:
(a) must, in relation to each State Contracting Government, produce a water audit monitoring report which includes information about that Government’s compliance with the annual diversion target calculated for each designated river valley in the territory of that State and for the whole of the State in the relevant water year; and
(b) may publish any such report, or a summary thereof, in such manner as it may determine.
(6) A water audit monitoring report under sub‑clause 13(4) must be produced by 31 December following the conclusion of each relevant water year, or by such other time as the Authority may determine.
(7) The Register maintained under sub‑clause 13(7) of the former Schedule is continued in existence in the form in which it was held, and containing the information it contained, immediately prior to commencement of this Schedule until altered by the Authority in accordance with sub‑clause (8).
(8) The Authority must maintain the Cap Register referred to in sub‑clause 13(7) so that it records: