2022 Water and Sewerage Price Determination Investigation

​​​​​​​​​Final Report and Price Determination

The Regulator completed its 2022 Price Determination investigation on 10 May 2022.

On completing its investigation, the Regulator released its Final Report and Price Determination.

The consortium of Carisbrooke Consulting Group, Utilities Regulation Advisory and Strategic Infrastructure Planning Advisory (CCGUS) provided an update on its independent review of TasWater's proposed operating expenditure and capital expenditure. CCGUS Final Report was submitted to the Regulator in May 2022.

The decisions contained in the Regulator's Final Report also take into consideration submissions received in response to the Regulator's Draft Report.

The Final Report and Price Determination are accompanied by a Media Release​.

Notice of the making of the Price Determination will be published in the Tasmanian newspapers and in the Tasmanian Government Gazette.

Following release of the Final Report and Price Determination, TasWater is required to submit its revised Price and Service Plan for the Regulator's approval. The revised PSP must comply with the requirements set out in the Regulator's Final Report and Price Determination.

Subject to the Regulator's approval, the prices and service standards outlined in TasWater's final PSP will commence on 1 July 2022.

Copies of the individual components of the Final Report are available here:

 Executive Summary (PDF 689Kb)​​

 Summary of the Regulators Decisions (PDF 3Mb)

 Chapter 1 Prices (PDF 776Kb)

 Chapter 2 Revenue requirement (PDF 789Kb)

 Chapter 3 Demand forecasts (PDF 370Kb)

 Chapter 4 Capital expenditure (PDF 779Kb)

 Chapter 5 Operating expenditure (PDF 842Kb)

 Chapter 6 Regulatory depreciation (PDF 601Kb)

 Chapter 7 Rate of return on capital (PDF 856Kb)

 Chapter 8 Structure of prices, fees and charges (PDF 956Kb)

 Chapter 9 Other pricing issues (PDF 513Kb)

 Chapter 10 Customer contract, policies and service standards (PDF 505Kb)

 Chapter 11 Glossary and acronyms (PDF 499Kb)

Appendices:

 Appendix A. Summary of submissions received on the Regulators Draft Report (PDF 1Mb)​

 Appendix B. Regulatory framework (PDF 697Kb)

 Appendix C. Context for the investigation (PDF 674Kb)

 Appendix D. Customer Contract and Policies (PDF 875Kb)

 Appendix E. Customer Contract (PDF 715Kb)

 Appendix F.1 Water and Sewerage Network and Charges Policies (PDF 2Mb)

 Appendix F.2 Land Development Policies (PDF 1Mb)

 Appendix F.3 Trade Waste Policy (PDF 747Kb)

 Appendix G. Customer Service Standards (PDF 656Kb)​

Attachments:

 1. TasWater’s Stakeholder engagement questions and materials (compilation) (PDF 2Mb)

 2. CCGUS TasWater expenditure review - Draft Report (PDF 6Mb)

 3. MJA review of developer charges - Options paper for TasWater (Final) (PDF 3Mb)

 4. MJA review of developer charges - Options paper for TasWater (Draft) (PDF 737Kb)

 5. MJA methodology for calculation of standard developer charge (PDF 4Mb)

 7. Frontier Economics - Developer Charges Investigation Report, February 2014 (PDF 6Mb)

 8. Jacobs - Commercial Trade Waste Charging Pricing Report, November 2019 (PDF 3Mb)

 9. Jacobs - Review of Sewerage and Commercial Trade Waste Charges, November 2019 (PDF 13Mb)


Draft ​Report and Draft Determination

The Regulator's draft investigation report and draft price determination, released on 28 February 2022, sets out the Regulator's assessment of TasWater's proposed Price and Service Plan for the period starting 1 July 2022.

The Regulator also issued a media release​ and invites submissions from interested parties on the Regulator's draft decisions and other relevant issues.

Submissions close on 28 March 2022 and can be made by email to office@economicregulator.tas.gov.au. More information on making a submission can be found here.

The Regulator released a revised version of the Draft Report that contains some minor amendments.


 2022 TasWater Price Investigation Draft Report and Draft Determination (PDF 8Mb)​​


Copies of the individual components of the Draft Report including the Draft Price Determination and attachments are available here:

 Executive Summary (PDF 1Mb)

 Chapter 1 Prices (PDF 919Kb)

 Chapter 2 Revenue requirement (PDF 925Kb)

 Chapter 3 Demand forecasts (PDF 614Kb)

 Chapter 4 Capital expenditure (PDF 798Kb)

 Chapter 5 Operating expenditure (PDF 1Mb)​

 Chapter 6 Regulatory depreciation (PDF 770Kb)

 Chapter 7 Rate of return on capital (PDF 882Kb)

 Chapter 8 Structure of prices, fees and charges (PDF 1Mb)

 Chapter 9 Other pricing issues (PDF 777Kb)

 Chapter 10 Customer contract, policies and service standards (PDF 665Kb)

 Chapter 11 Draft Price Determination (PDF 805Kb)

 Chapter 12 Glossary and acronyms (PDF 668Kb)

Appendices:​

 Appendix A. Regulatory framework (PDF 733Kb)

 Appendix B. Context for the investigation (PDF 488Kb)

 Appendix C. Review of Customer Contract and Policies (PDF 958Kb)

 Appendix D. Draft Customer Contract (in mark-up) (PDF 1Mb)

 Appendix E.1 TasWater Policies - Draft Network and charging (in mark-up) (PDF 2Mb)

 Appendix E.2 TasWater Policies - Draft Land development (in mark-up) (PDF 1Mb)

 Appendix E.3 TasWater Policies - Draft Trade waste (in mark-up) (PDF 774Kb)​

 Appendix F. Review of customer service standards (PDF 2Mb)​

Attachments:

 1. TasWater’s Stakeholder engagement questions and materials (compilation) (PDF 2Mb)

 2. CCGUS TasWater expenditure review - Draft Report (PDF 6Mb)

 3. MJA review of developer charges - Options paper for TasWater (Final) (PDF 3Mb)​

 4. MJA review of developer charges - Options paper for TasWater (Draft) (PDF 737Kb)

 5. MJA methodology for calculation of standard developer charge (PDF 4Mb)

 6. TasWater - Fact sheet - Developer Charges Options, March 2020 (PDF 3Mb)

 7. Frontier Economics - Developer Charges Investigation Report, February 2014 (PDF 6Mb)

 8. Jacobs - Commercial Trade Waste Charging Pricing Report, November 2019 (PDF 3Mb)

 9. Jacobs - Review of Sewerage and Commercial Trade Waste Charges, November 2019 (PDF 13Mb)​


Submissions on the Draft Report and proposed Price Determination close on 28 March 2022. The Regulator has received the following submissions in response to the Draft Report and proposed Price Determination:​​

 TasWater (PDF 1Mb)

 Tasmanian Labor Party (PDF 339Kb)

 Mr Malcolm Eastley (PDF 2Mb)

 Cricket Tasmania (PDF 177Kb)​

 Nekon Pty. Ltd. (PDF 363Kb)

 Ms. Rachel Koo (PDF 58Kb)

 Local Government Association Tasmania (PDF 314Kb)

 Federal Group (PDF 372Kb)​

 Property Council of Australia (PDF 206Kb)​


Consultant's Report

The Regulator engaged a review team made up of staff from Carisbrooke Consulting Group, Utilities Regulation Advisory and Strategic Infrastructure Planning Advisory (CCGUS) to undertake an independent review of TasWater's proposed operating and maintenance expenditure and capital expenditure. CCGUS' Draft Report was submitted to the Regulator in November 2021. CCGUS' Draft Report is available above (Attachment 2).​

Customer and stakeholder consultation

To receive updates, news and information, email us at office@economicregulator.tas.gov.au * to subscribe to our mailing list.


Fact Sheets

 Overview of the TasWater price investigation 2022 (PDF 320Kb)​

 The Price Determination process (PDF 294Kb)

 Residential pricing (PDF 447Kb)

 Non-residential pricing (PDF 468Kb)

 Sewerage charges (PDF 493Kb)

 Trade Waste charges (PDF 287Kb)

 Service charges (PDF 263Kb)​


TasWater's Proposed Price and Service Plan

TasWater submitted its proposed Price and Service Plan on 30 June 2021​.​

To correct errors identified in the Plan submitted on 30 June 2021, TasWater provided the Regulator with a revised version of its proposed Price and Service Plan on 13 December 2021:

 TasWater proposed Price and Service Plan for the fourth regulatory period (1 July 2022 to 30 June 2026) (12Mb)

This document lists the changes made in the revised version of TasWater's Plan: 

 PSP4 Revisions Table (437Kb)

On 2 December 2021 TasWater also provided the Regulator with a revised version of its financial model:

 TasWater PSP4 Pricing Model (​834Kb)​


Notice of intention to conduct a water and sewerage price determination investigation and make a price determination

On 26 June 2021 the Regulator notified stakeholders that it intended to conduct a water and sewerage price investigation and make a price determination during 2021-22.​

In October 2021, the Regulator decided to extend the timeframe for the release of the Draft Report and proposed Determination. The Regulator made this decision so as there was enough time to:

  • fully consider the proposals set out in TasWater's proposed Price and Service Plan; and
  • conduct targeted consultation, before releasing the Draft Report and proposed determination, in relation to TasWater's proposed sewerage charging methodology, trade waste charges, developer charges and service levels.
The Regulator also decided to extend the timeframes for its consultants to complete their review of TasWater's operating and capital expenditure.​

In January 2022, to ensure he has sufficient​ time to finalise the investigation, the Regulator decided to further extend the timeframes for the release of the Draft Report and proposed Determination.

Under these revised timeframes, the Regulator intends releasing his Draft Report for public consultation on 28 February 2022. Submissions will be due by 28 March 2022. The Regulator will release the Final Report arising from his investigation and make the price determination in early May 2022.

The Regulator notified stakeholders of the changes to the timeframes on 31 January 2022​.

​​​​​​​​​​​​​Extension​ of the third regulatory period due to COVID-19

On 2 April 2020 TasWater wrote to the Premier of Tasmania requesting an extension of the third regulatory period by one year to 30 June 2022 and extending the date by which TasWater must submit its proposed Price and Service Plan by one year to 30 June 2021. The request was in response to the need to assess the impact of COVID-19 on TasWater's current and future operations.

The Minister for Finance informed the Regulator on 12 June 2020 that he would seek approval to introduce an amendment to the Water and Sewerage Industry Act 2008 that would:

•           extend the end of third regulatory period from 30 June 2021 to 30 June 2022; and

•           fix the duration of the fourth regulatory period to be from 1 July 2022 to 30 June 2026.

Notice of Requirement to Submit Proposed Price and Service Plan

In response to the Government's decision to extend the third regulatory period, the Regulator gave notice to TasWater on 22 June 2020 that a proposed Price and Service Plan must be submitted by 30 June 2021.

This superseded the notice given on 26 June 2019, requiring TasWater to submit a proposed price and service plan for the fourth regulatory period by 30 June 2020.  

Water and Sewerage Industry Price and Service Plan Guideline

 Water and Sewerage Price and Service Plan Guideline April 2021 (applies 1 July 2022 - 30 June 2026) (PDF 988Kb)​

The water and sewerage industry price and service plan guideline sets out the Regulator's minimum requirements for the information that should be provided in TasWater's proposed price and service plan for the fourth regulatory period. The guideline also provides information on how the investigation will be conducted (including consultation) and specifies the actions TasWater must take in preparing its proposed price and service plan.

In June 2019, the Regulator published a water and sewerage price and service plan guideline in relation to the fourth regulatory period.

In June 2020, the Regulator published a revised water and sewerage price and service plan guideline for the fourth regulatory period in response to the extension of the third regulatory period due to the COVID-19 pandemic. This guideline replaced the guideline published in June 2019. 

Following amendments made to the Water and Sewerage Corporation Act 2012​TasWater is no longer subject to the National Tax Equivalent Regime and is therefore no longer required to make tax equivalent payments to its council owners. In April 2021, the Regulator published a further revised water and sewerage price and service plan guideline that addressed the change in TasWater's tax obligations. This guideline replaced the guideline published in June 2020.

Duration of the Fourth Regulatory Period​

On 26 June 2019, the Regulator declared that the duration of the fourth regulatory period will be four years from 1 July 2021 to 30 June 2025. In response to the extension of the third regulatory period due to COVID-19 the fourth regulatory period will be the four years from 1 July 2022 to 30 June 2026.​












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