The NSW Government encourages best practice pricing for local government water and sewerage utilities. The purpose of which is to:
- Encourage the effective and efficient delivery of water supply and sewerage services.
- To promote sustainable water supply practices and water demand management throughout NSW.

Best Practice Pricing will be mandatory from the 1st of July 2004 if councils wish to make a dividend payment from the surplus of a local water utility or sewer business to general revenue. It is also a requirement that best practice pricing be in place for future financial assistance under the Country Towns Water Supply and Sewerage (CTWS&S) Program. This program provides funding to councils for public sewer and water infrastructure works in towns and villages to provide a basic level of services tho these communities. This program will be available until the year 2008. At that point councils will be expected to fund all backlog capital works independently. In relation to Moree Plains Shire Council these future works are proposed to include:
- The Ashley sewerage scheme.
- The Boggabilla sewerage scheme.
- Potable water supply for Garah town-ship.
- Potable water supply to Biniguy town-ship.

Best practice pricing presents six compliance criteria to local government. These include:
1. Strategic Business Planning
2. Pricing and Developer Charges
3. Demand Management
4. Drought Management
5. Performance Reporting
6. Integrated Water Cycle Management

Council resolved on the 17/04/2003 (Res 03/07/14) to implement Best Practice Pricing in the 2004/2005 financial year.

Price Guidelines for Best Practice Pricing

The following information has been provided from circular No.1 from the Department of Public Works and Services (Ref: TWTR03-005). Appropriate water supply, sewerage and liquid trade waste pricing is fundamental to effective management of water supply and sewerage businesses. Local Water Utilities need to implement appropriate water supply, sewerage and trade waste pricing to comply with the Council of Australian Governments’ (COAG) Strategic Framework for Water Reform and the NSW government’s commitment to National Competition Policy. This process involves:
- Full cost-recovery for water supply and sewerage businesses to ensure sustainability. Charges must be independent of land values.
- A two-part tariff for water supply, with an appropriate water usage charge per kilolitre and access charges based on the service connection size (20ml, 30ml, 100ml, etc).
- A uniform annual sewerage bill per residential property independent of land values.
- A two-part tariff for non-residential sewerage with an appropriate sewer usage charge per kilolitre and access charges based on the size of the water service connection size. The sewerage usage charge per kilolitre is industry specific and is calculated based on water consumption and estimated water disposal into the sewerage system. For example a bakery store will use the greatest proportion of their water in food preparation preventing that water from entering the sewer system. Whereas a butcher shop will traditionally use the greatest proportion of their water for floor washing, therefore that water is entering the local sewer system.
- Appropriate trade waste fees and charges for all liquid trade waste dischargers.
- Community consultation on appropriate new tariff options.
NB: Trade waste and sewer pricing is to reflect the cost that pollution places on the treatment of sewerage and waste. When trade waste and other pollutants enter treatment systems, maintenance and processing costs are increased. The point to be made is that businesses and commercial premises that create trade waste are a direct cause of higher cost generation for council’s treatment facilities.

The following information has been provided from circular No.1 from the Department of Public Works and Services (Ref: TWTR03-005).

Developer charges provide a source of funding for infrastructure required for new urban development; and pricing signals regarding the cost of urban development and thus encourage less costly forms and areas of development. Councils have the power to levy developer charges for water supply, sewerage and stormwater under s.64 of the Local Government Act1993.

To comply with best practice pricing, local water utilities need to implement a Development Servicing Plan (DSP) with commercial water supply and sewerage developer charges in accordance with the above guidelines. This involves:
- Calculating the capital cost of assets serving development
- Calculating the capital charge (capital cost + return on investment)
- Assessing the reduction amount
- Preparing draft DSPs
- Consulting the community and stakeholders, including exhibiting the draft DSPs
- Adopting developer charges in the final DSPs, after considering the comments received during consultation.

Development Servicing Plans, an Exemption Document or a Policy Document need to be provided to the Ministry for registration by 30 June 2004.

Best-practice pricing and developer charges are a pre-requisite to eligibility for financial assistance towards the capital cost of backlog water supply and sewerage infrastructure under the Country Towns Water Supply and Sewerage program.