MELBOURNE'S supply of water from the controversial north-south pipeline will slump to about 40,000 megalitres in its second year of operation.

The estimate is based on the cost of pumping water down the pipeline outlined in an Essential Services Commission report on Melbourne Water's expenditure over the next five years.

The report shows Melbourne Water originally assumed it would spend $4.7 million a year on electricity, pumping 75,000 megalitres a year down the pipeline.

The Department of Sustainability and Environment has advised Melbourne Water it is still on track to deliver 75,000 megalitres down the pipeline in its first year of operation - 2010-11.

However, drought has forced DSE to advise Melbourne Water the volume available from the pipeline will slump to much lower levels in subsequent years.

While Melbourne Water has refused to reveal DSE's revised estimates, it did supply the ESC with its revised pumping costs.

These estimates show the electricity bill from pumping would slump to $2.5m in 2011-12 and $3.2m in 2012-13.

Assuming the cost of electricity remains the same at $62.67 a megalitre, the revised volumes would be 40,000 megalitres in 2011-12 and 51,000 in 2012-13.

In its first year of operation (2010-11) the pipeline relies on tapping into 20,000 megalitres of Lake Eildon's water quality reserve and accumulated water savings from modernising the Goulburn-Murray irrigation district.

However, the Victorian Government has promised that from 2011-12 onwards, all water savings would be shared equally between Melbourne Water, irrigators and the environment.

Most irrigators understand the water allocated against these savings is almost impossible to predict in two or three seasons time.

The ESC report also shows Melbourne Water had hoped to pump 30,000 megalitres down the pipeline next irrigation season, months ahead of schedule.

The authors of the ESC report, consultants Deloitte and Halcrow, state:

"In its (original) water plan, Melbourne Water had assumed for modelling purposes the pipeline would transfer an average volume of 75,000 megalitres annually from 2010-11, following 30,000 megalitres in 2009-10 (February to June 2010)".

But Melbourne Water's revised estimate of pumping costs shows it expects to pump 10,000 megalitres down the pipeline in 2009-10.

Just last week, Victorian Water Minister Tim Holding said construction of the 70km Sugarloaf pipeline was running ahead of schedule, meaning much needed water could flow to Melbourne several months earlier than the original start date of July 2010.

Mr Holding said originally 75,000 megalitres was to come to Melbourne in 2010-11, however 10,000 megalitres "could be available in the first half of 2010" if the construction of the pipeline can be completed early.

DSE declined to comment.