Statement of Expectations for Snowy Hydro
Aligning the Statement of Expectations with Murray Darling Basin reforms and community expectations
Have you ever heard of a ‘Statement of Expectations’? It is a document which may only be a few pages long, but is critically important for how Australian Government Ministers outline their expectations of statutory authorities and Government Business Enterprises.
Through issuing a Statement of Expectations, Ministers can provide greater clarity about government policies and objectives relevant to a statutory authority, including the policies and priorities it is expected to observe in conducting its operations.
The Statement of Expectations recognises the independence of the statutory agency.
In the case of the Upper Murrumbidgee River, and other rivers impacted by the operations of Snowy Hydro Limited, the Statement of Expectations allows the two Commonwealth shareholder Ministers in Snowy Hydro Limited – the Ministers for Finance and Energy – to set their expectations for operations.
The most recent Statement of Expectations was drafted in 2021 and, given that it was drafted with a focus on Energy and Finance, aligns with objectives of those portfolios. It does not however include any considerations for downstream water uses, such as town water supply, environmental, social or cultural needs.
With a new Statement of Expectations being drafted in 2024, there is a need to bring other considerations into the operations of Snowy regarding downstream users. Our concern is that this opportunity may be missed if the community is not brought along with the process.
This page below has been created for you to learn more about the importance of the Statement of Expectations. It also provides some draft text proposed to be included in the next version. We encourage you to read through and if you feel strongly, take action to ensure the next iteration of the Statement of Expectations has community input.
Updating the Statement of Expectations
Snowy Hydro Limited is an unlisted public company limited by shares and incorporated under the Corporations Act. It is a Commonwealth Company for the purposes of the Public Governance, Performance and Accountability (PGPA) Act 2013, and is wholly owned by the Australian Government represented by two Shareholder Ministers: the Minister for Finance and the Minister for Energy.
The Shareholder Ministers outline their expectations to the Snowy Hydro Limited Board via a document called the ‘Statement of Expectations’. The most recent Statement of Expectations was issued in 2021 with a focus on operating profitably within the National Electricity Market, delivering financial returns consistent with commercial operations, and progresses pumped hydro in the Snowy Mountains through Snowy 2.0.
The current Statement of Expectations does not include any considerations for the environment, downstream water users, Cultural or social values, making it inconsistent with broader Murray-Darling Basin Plan water reforms to manage rivers for quadruple bottom line outcomes.
During negotiations on the Water Amendment (Restoring Our Rivers) Act 2023, the Snowy Hydro Limited Shareholder Ministers agreed to update the Statement of Expectations.
In November 2023, a survey of over 1000 people with an interest in the Upper Murrumbidgee River and Montane rivers expressed that, in addition to power generation and revenue, the Statement of Expectations should address the following matters: Water Quality, Transparency of Operations, Environmental Sustainability, Critical Human Water Needs, Community Engagement, Cultural Outcomes, Regional development, Recreational Use and Agricultural Use.
There is now a need for a clear pathway to ensure that the results of the community survey are considered in the development of the updated Statement of Expectations, which is currently being drafted in 2024.
To enable this, shareholder Ministers are now being asked to issue a government policy order under Clause 22 of the PGPA Act, via the Statement of Expectations, requiring Snowy Hydro Limited to manage the release of water for environmental, social and Cultural needs alongside renewable energy production; aligning with the Murray Darling Basin Reforms.
The text below has been drafted to align with the objectives of the Murray Darling Basin reforms and capture the sentiment from the community survey, to ensure the next Statement of Expectations includes considerations of other water needs.
The proposed wording below has been endorsed by the ACT and Region Catchment Management Coordination Group (ACT&R CMCG), to be provided to shareholder ministers to inform the drafting of the next Statement of Expectations. The ACT&R CMCG is a statutory advisory group established under the Water Resources Act 2007 to facilitate improved governance and coordination of water catchment activities within the ACT and the surrounding region.
It is proposed that the following paragraphs be added to the Statement of Expectations as a policy order under Clause 22 of the PGPA Act (2013):
Consistent with reforms under the Commonwealth Water Act (2007), the rights and obligations under the NSW Snowy Water Corporatisation Act (1997) and Snowy Licence (2002; last revised 2020) and the Snowy Hydro Board’s Sustainability Report (2023), Shareholder Ministers expect that Snowy Hydro Limited will balance their water management and energy obligations under the licence and obligations to support improved environmental, social, economic and Cultural outcomes alongside renewable energy production.
Snowy Hydro Limited will work with the jurisdictional governments of New South Wales, Victoria, the Australian Capital Territory and the Commonwealth to:
Progress against each of the revised matters and obligations as outlined in the Statement of Expectations
Implement processes and procedures for managing risks to regional water security; including water take for domestic purposes or essential town services under extreme events. The processes and procedures must include considerations for both water shortages and quality, and consider short, medium and long-term trends in regional development and climate change.
Improve environmental, Cultural, economic and social values, which can be achieved by applying the principles for environmental watering in the Murray Darling Basin Plan at a minimum (Chapter 8, Part 4, Division 6).
Ensure regular engagement with the community within which it operates and impacts, including a range of stakeholders representing environmental, regional water security, social, Cultural and production values.
Report to Commonwealth Shareholder Ministers via the annual report on release of water for environment use from the Snowy Scheme under the Water Act 2007 s85ABA; and compliance report to New South Wales reporting compliance requirements set out in the Snowy Water Licence.
Operate under the principle of transparency and public accountability in relation to the annual reports about water releases from the Snowy Scheme.
Keen to help?
If you feel strongly that these matters need to be considered in the management of the Upper Murrumbidgee, Snowy, and Montane rivers, we encourage you to get in touch with Commonwealth shareholder Ministers in Snowy Hydro Limited and to share this information with your Federal Member of Parliament.
Our questions to key politicians
These are the questions we want answered about the Statement of Expectations:
As the shareholders responsible for developing the Statement of Expectations, can the Minister for Finance and Minister provide an update on progress of these review of the Statement of Expectations, including commencement dates, expected timeframes for completion and expected outcomes.
Given the broad community interest in the review of the Statement of Expectations, what steps are being taken to ensure that key stakeholders, including the ACT and NSW governments, as well as community and not for profit organisations, are engaged in the design and conduct of the review and are consulted on the review outcomes?
How are the shareholding Ministers ensuring that the community's deep concerns expressed through the survey about ecological health, water quality issues, water security and cultural values, of the upper Murrumbidgee are adequately being addressed through the review of the Statement of Expectation that are currently underway? (see https://theforgottenriver.au/community-voice)
How will the shareholding Ministers address the priorities for the Statement of Expectations outlined and shared by the ACT and Region Catchment Management Group?