Coliban Water is likely to release treated trade waste water from its Kyneton sewerage treatment plant into the Campaspe River in the coming weeks, which will affect landowners downstream.
Just over a month ago Coliban Water said there was no indication it would need to make such a release.
Coliban Water said it anticipated it would need to release class C water from its Kyneton Water Reclamation Plant, to protect its storage lagoons from failure.
The organisation began to release Class B water - generated by domestic use and of a higher quality - into the Campaspe River on Friday, with a temporary licence exemption from the Environment Protection Authority.
Coliban Water's executive general manager water quality David Sheehan said the water low flows in the Campaspe River meant the organisation had been unable to achieve the dilution levels required by its licence for the Class B water.
If it did not discharge water the onsite storage lagoons might overflow and fail, he said.
The discharge of Grade B water falls within Coliban Water's temporary licence exemption, the discharge of Grade C water does not, Mr Sheehan said.
Coliban Water said in April that there was no indication it would need to discharge water of diminished quality during 2019, despite the fact that the year to date had been unusually dry.
Rainfall was less than half the mean for each of the first four months of 2019. In April it was substantially less at 3.2 millimetres, just over 10 per cent of the average.
Mr Sheehan said Coliban Water would normally anticipate flow to the Campaspe River at this time of year, allowing them to release water treated in the lagoons.
Despite the dry forecast Coliban Water had been hopeful in April that there would be some flow to the river.
"The emergency as we described it to EPA is the fact that because of the extremely dry period we've had, we've seen no flow in the Campaspe River, which we'd normally see at this time of year," Mr Sheehan said.
"We were hopeful [in April] that we would have a little bit of flow in the river to be able to discharge, even though the forecast was for dry conditions. Unfortunately that flow hasn't turned up.
"I don't think we've had any days where we can meet the dilution requirements. So the decision was made to approach the EPA to get the emergency discharge requirements in place."
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Mr Sheehan said Coliban Water was keeping the EPA advised about what was happening on site. They would have to discuss further with the EPA to obtain an exemption allowing them to discharge Grade C water,
Coliban Water has discharged water outside its licence into Snipes Creek five times in the past 12 years, in 2007, 2010, 2012, 2013, 2014 and 2016.
It has discharged water into the Campaspe River in 2013, 2015 and 2018.
In 2016 and 2018 it discharged treated water of a diminished quality into the Campaspe.
Mr Sheehan said the frequent discharges outside Coliban Water's licence requirements were due to low flows over the past five to seven years.
He said Coliban Water did not set out to deliberately breach its licence, and did additional monitoring on the discharge to assess its environmental impacts.
"It just gives us less days to discharge, which means we are often in a position where we might not comply with the dilution requirement," Mr Sheehan said.
"Coliban Water takes this licence responsibility seriously, we do try to avoid being in a position where we're not compliant with our licence, and that's why we've committed to upgrade works on our plant to achieve requirements."
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