State Water plans to alter the way water usage costs are calculated in NSW, pushing for a full cost recovery system, a move that would see water delivery charges more than double for Peel Valley users.

Tamworth Regional Council has warned, if cleared by IPART and the ACCC, the changes would see a rise in household water bills.

The local business and irrigation sectors have also slammed the proposal.

One of the region’s largest commercial water users, Teys Australia Tamworth, has joined the campaign opposing the new charges, with spokesman Tom Maguire saying it could have a “dramatic” impact on the business.

“The processing industry is a low-margin industry and any increase in fixed operating costs could have a dramatic impact,” Mr Maguire said.

“We’ve seen what’s happened to the car industry in Australia. The single biggest threat to us is rising costs and we’d just urge the state government to not penalise rural operators with these new charges.”

Under the proposed changes, Tamworth will be the hardest hit area in the state.

Tamworth Business Chamber president Tim Coates said water-intensive businesses would be forced to pass on some of the increased costs to consumers.

“There would be a trickle-down effect to consumers,” Mr Coates said.

“Businesses would also have to look at ways to use less water, whether it be a simple dual-flush system in toilets or more advanced systems to use grey water.

“In today’s climate, businesses need to do everything they can to reduce overheads.”