SEQ retail water long-term regulatory framework

We released a staff guidance paper on the rules and procedures for the proposed annual performance monitoring framework.

Our final report on a long-term regulatory framework for monitoring the performance of water retailers in south east Queensland is in three parts:

• Part A provides an overview of the recommended annual performance monitoring framework.
• Part B sets out the details of the recommended annual performance monitoring framework.
• Part C sets out pricing principles to be considered by water retailers.

Our assessments of the suitability of the retailers to transition to the recommended regulatory framework form appendices E to I of the final report.

Our position on the treatment of the weighted average cost of capital (WACC) to apply as part of the annual performance monitoring regulatory framework forms appendix B of the final report.

In undertaking the investigation, we released for consultation:

• a position paper on a long-term regulatory framework for monitoring the performance of water retailers in south east Queensland
• a position paper on pricing principles to be applied by water retailers
• draft assessments of the suitability of the retailers to transition to the recommended regulatory framework
• a technical paper on implementation issues
• a position paper on the treatment of the weighted average cost of capital (WACC).

We were directed to develop a long-term regulatory framework for the monopoly distribution and retail water and sewerage activities of Unitywater, Queensland Urban Utilities and Logan, Redland and Gold Coast City Councils.

Under the ministers’ direction, our task was to:

1. develop a regulatory framework that protects the long-term interests of users of SEQ water and sewerage services by ensuring the prices of these services reflect prudent and efficient costs, while promoting efficient investment in, and use of, these services
2. develop pricing principles that apply to the industry including water, sewerage, trade-waste, recycled water services and stormwater re-use services.

A final report was required by 30 September 2014.