WaterNSW has asked the Independent Pricing and Regulatory Tribunal (IPART) to raise the cost of raw water for the region by 40 per cent in just one year in a submission Tamworth Regional Council (TRC) councillor Juanita Wilson called unfair, unreasonable and illogical.

The council approved a scathing submission to the pricing watchdog on Tuesday and will ask for an investigation into groundwater entitlement holders.

Cr Wilson argued water should cost consumers the same no matter where they live.

"While the post office charges the same letter delivery price regardless of where it's delivered, WaterNSW doesn't." she said. "Our residents and us should be up in arms over it, which we are."

WaterNSW argued the price hike is due to an increase in environmental expenditure, asset maintenance costs and technology upgrades.

If IPART approves the increase, water from the state-owned Chaffey Dam will cost $253.55 per megalitre, while the council's Dungowan Dam price sits at $5.25.

The changes could see businesses pack up and leave or not look twice at the region, councillor Mark Rodda said.

"I believe nothing demonstrates how insignificant our region is to the [state] government than a proposal such as this," he said.

"This is sad that communities like ours have suffered drought, water shortages via the drought and I believe some water mismanagement, fires and COVID should then be belted by the government in such a nasty manner," Cr Rodda said.

Even if IPART recommends the maximum charges be levied, the state government can step in to ensure those aren't implemented.

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The council will write to Tamworth MP Kevin Anderson to request his support in having the costs of raw water reduced.

Under the proposed changes, Tamworth, Moonbi and Kootingal's water taken from Chaffey Dam in 2021 to 2022 will be $1.2 million, a 40 per cent increase on the charges in 2020 to 2021.

The council will also ask IPART to investigate groundwater entitlement holders who do not pay WaterNSW, despite releases into the Peel River the council pays for that replenish the aquifer.

Public submissions close April 16.

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