Water
From 8 July 2008, the economic regulation of the water and sewerage sector was added to OTTER's responsibilities.
Tasmanian Water and Sewerage State of the Industry Report
In 2008, legislation was introduced to reform Tasmania’s water and sewerage industry. The reforms involve structural changes, with water and sewerage services to be delivered by three regional corporations from 1 July 2009. In addition, a new regulatory framework will apply to the industry, which includes independent regulatory oversight, customer service standards, price regulation and performance monitoring and reporting.
The Water and Sewerage Industry Act 2008 requires the Regulator to prepare an annual State of the Industry Report in consultation with relevant government agencies and health and environmental regulators. The publication of performance information assists in meeting the objective of the Act to protect the long-term interests of customers and to provide for the safe, environmentally responsible, efficient and sustainable provision of reliable and secure water services and sewerage services to the Tasmanian community.
The report covers the key areas of affordability, customer service, network reliability and efficiency, drinking water quality, environmental compliance and an identification of priority future projects. Information presented in the report is based on data sourced from state government agencies, councils and bulk water authorities.
The  2007-08 State of the Industry Report focuses on the pre-reform environment and measures the performance of Tasmania’s three bulk water authorities and 29 local councils in providing water and sewerage services across the State. It contains:
- a review of industry structures and regulation and an outline of the ongoing process of regulatory reform;
- a review of the State’s water resources;
- an overview of industry infrastructure across the State, together with a review of customer service performance;
- an assessment of the compliance of the industry with public health and environmental guidelines including water quality and sewage treatment;
- a summary of the water and sewerage tariff structures, including a review of revenue, costs and capital expenditure; and
- a review of the sustainability of the Tasmanian water and sewerage industry, including a review of significant current and future capital projects.
The report is a comprehensive review of the performance and sustainability of the Tasmanian water and sewerage industry.
Interim Pricing Arrangements
On 27 August 2008, the Minister for Primary Industries and Water issued Terms of Reference requiring the Regulator to conduct an inquiry to inform the development of an Interim Price Order for the Tasmanian water and sewerage sector. The objective of the Interim Price Order is to transition the water and sewerage industry towards full cost recovery and consistent price arrangements that will be likely to apply from 1 July 2012 when the first formal price determination is expected to commence. It is expected that the Interim Price Order will be reviewed on an annual basis.
The Inquiry was required to:
- identify and assess options to transition revenue over the interim period;
- identify the implications of these transition paths; and
- document data limitations and identify information collection priorities to assist future Interim Price Order reviews or price regulation more broadly.
The Economic Regulator reported back to the Minister on the findings of the Inquiry on 28 November 2008.
On 6 February 2009, the Treasurer requested that the Economic Regulator revise the analysis presented in the Interim Pricing Inquiry Report of November 2008 to take account of the outcomes of the Government's due diligence analysis of the Tasmanian water and sewerage sector as well as additional information on capital expenditure and the quantum of returns to councils.
The Economic Regulator provided this revised advice to the Treasurer on 18 February 2009.
On 15 April 2009, the Treasurer released the draft Interim Price Order as well as the advice from the Economic Regulator contained in the Final Report to Inform the Development of an Interim Pricing Order for the Tasmanian Water and Sewerage Sector and the Revised Interim Pricing Analysis for the Tasmanian Water and Sewerage Sector.
The Government sought comments on the draft Order in its development of the final Order to apply to the Tasmanian Water and Sewerage Sector. The final Interim Pricing Order was published, and commenced, on 1 July 2009. The Order can be found on the Department of Treasury and Finance website.
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