A row between the Mount Isa Water Board and Glencore over power prices could come to a head next month.
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Mount Isa Water Board released a statement on Friday saying it had been seeking to negotiate a new power supply agreement since Glencore gave notice two years ago to terminate a long standing contract.
MIWB said it disputed a decision by Glencore to significantly increase electricity charges from 1 January 2016 but agreement on a new power supply contract has not yet been reached.
MIWB CEO Stephen Farrelly said they had obligations under the Water Supply (Safety and Reliability) Act and have put contingency plans in place to ensure there is no disruption to drinking water supply.
“The community can be assured that a drinking water supply disruption is out of the question. MIWB will keep the water flowing,” Mr Farrelly said.
“We have negotiated with Glencore in good faith to try and agree reasonable power supply terms that both parties can accept and which will avoid significant increases in water charges.”
Glencore supplies power to MIWB and the charges are passed on by MIWB to Mount Isa City Council as part of the cost of bulk water, making up a proportion of water rates for local households and businesses.
MIWB said it only passes on the actual costs of the power it uses to deliver water and does not generate profits from doing so.
“Our charges to customers reflect only the costs to provide safe and reliable bulk water supply, and we are committed to minimising price increases,” Mr Farrelly said.
“We have an agreement in principle that Glencore will do the same with respect to power pricing
““We have been working closely with Council for more than a year to manage any community impacts of an increase in power costs. We remain hopeful of a positive outcome from our ongoing discussions.”
The MIWB supplies bulk water to industrial customers and Mount Isa City Council. The Board has four directors including four nominees of the Department of Energy and Water Supply and one from Mount Isa City Council.
According to the Townsville Bulletin, Glencore told the water board it will cut power on March 25 however Glencore have denied this in a statement to the North West Star.
“Along with Mount Isa City Council, Mount Isa Mines is a major customer of the Mount Isa Water Board and it is in everyone’s interest to ensure a secure and economical supply of water,” a Mount Isa Mines spokesperson said.
“Mount Isa Mines will continue to provide power to the Mount Isa Water Board while commercial negotiations are ongoing. It is not appropriate for us to provide further comment at this stage.”