On 9 July 2008, the Government Prices Oversight Commissioner took on the additional role of the Economic Regulator of Water and Sewerage as a consequence of the Government’s water and sewerage reforms.
Until July 2008, the Commission was required by section 24 of the Government Prices Oversight Act 1995 (GPO Act) to conduct an investigation into the pricing policies of the Hobart Regional Water Authority (Hobart Water), Cradle Coast Water and the Esk Water Authority (Esk Water) every three years. In addition, the Commission also undertook periodic assessments of Tasmanian councils' compliance with Tasmania's National Competition Policy water reform obligations as they apply to urban water and wastewater services.
In its new role, the Commissioner will no longer be required to undertake these investigations and reviews. However, as Economic Regulator of Water and Sewerage, the Commission will have responsibility for regulating water and sewerage prices and licensing industry participants, as well as monitoring the performance of the sector on an annual basis.
Initially, the Commission will focus on:
- providing advice to the Government on the interim pricing arrangements;
- providing advice on interim licences; and
- preparing the Water and Sewerage State of the Industry Report and performance reporting guidelines.
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:
The Economic Regulator reported back to the Minister on the findings of the Inquiry on 28 November 2008.
- identify and assess options to transition revenue over the interim period;
- identify the implications of these transition paths; and
- document data limitations and indentify information collection priorities to assist future Interim Price Order reviews or price regulation more broadly.
The Interim Price Order will subsequently be determined by the Treasurer and will apply from 1 July 2009.
Urban Water and Waste Water Pricing Compliance Reviews
Bulk Water Investigations into the Pricing Policies of Bulk Water Authorities