The ACT government is spending $120,000 to investigate whether it can contribute 15 of the 62 gigalitres of water the Murray-Darling Basin Authority needs in the next year for its basin water recovery program.
Last month, ministers at a Murray-Darling Basin Ministerial Council meeting agreed that their top priority was to recover the national target of 62 gigalitres of water for the program by June 2019, so that the full 605-gigalitre adjustment agreed to last year could come into effect.
Using $120,000 set aside in the 2018-19 budget, the ACT government's Environment, Planning and Sustainable Development directorate is now looking into the potential for water trading in the territory.
Water trading in the basin is responsible for about 95 per cent of the activity in Australia's water market, with the Murrumbidgee, Goulburn and Murray rivers dominating the southern basin.
In response to questions about the ACT's contribution to the basin water recovery program, Environment Minister Mick Gentleman provided an emailed statement that said the investigation was "at an early stage".
"Initial modelling has only just begun to examine how water trading could occur and what might be needed to set such a scheme up," Mr Gentleman said in the statement.
The ACT government owns the territory’s water supply and provides users, including the utility Icon Water, with an entitlement to extract water for consumptive use.
Mr Gentleman said given current levels of water use, the government believed about 15 gigalitres of water could be saved and made available on the temporary trading market "while ensuring the territory's water requirements were secure into the future".
"Temporary trading of water entitlements has the potential to raise additional revenue, which, for example, could go towards improved catchment management," Mr Gentleman said.
"The revenue generated would depend on the price of water at the time of trading.”
Mr Gentleman said as part of the investigation, the ACT government would consider "efficiency measures" that could help recover 15 gigalitres.
He said these included refurbishing stormwater assets, water recycling opportunities and water-sensitive landscaping measures.
The ACT's investigation comes after the utility Icon Water told Fairfax Media last month that the ACT's water supplies could withstand the worst drought on record.
The company has cancelled a contract with Snowy Hydro for back-up water supplies for the ACT, as much of regional NSW grapples with drought.