The Essential Services Commission of South Australia’s (ESCOSA’s) Price Determination for Councils with Managed Aquifer Schemes adopts a light-handed approach to pricing for recycled wastewater and stormwater.

The Price Determination requires transparency in pricing and the application of the NWI Pricing Principles. ESCOSA will monitor prices and has the authority to apply a more prescriptive regime in the future if required. While the original Price Determination has been extended with no fixed end date, ESCOSA has raised concerns about the long-term sustainability of small networks and has reiterated the importance of maintaining capital investment levels and smoothing pricing impacts over time.

This project provides guidelines and pragmatic advice for local government on the application of ESCOSA’s Price Determination and more specifically the NWI Pricing Principles. Of particular concern is the NWI requirement to recover the costs of capital investment. This report considers the options available under the NWI and the areas in which discretion is available to accommodate different initial pricing levels. A separate spreadsheet model, allow councils to calculate the NWI lower and upper limits and the prices associated with a more prescriptive regulatory approach.

The report was prepared for the Managed Aquifer Recharge User group. It focuses on pricing for stormwater recycling schemes that are owned and operated by local government, although most of the principles extend equally to wastewater recycling schemes.

Milestones achieved

• The project will deliver a consistent pricing policy and pricing template for Council with ASR schemes to demonstrate to the Essential Services Commission of South Australia (ESCOSA)  price determination compliance for Minor and Intermediate Water Retailers.
• ESCOSA is investigating the most appropriate form of regulation to be applied to Minor and Intermediate Water Retailers.

Project outcomes

The project reviewed the application of the NWI pricing principles on participating council water and wastewater supply businesses, with a particular focus on the implications of capital investment recovery.

As a consequence we propose the following series of steps:

• Document ESCOSA and NWI requirements - Develop guidelines for SA Councils
• Develop a high-level pricing model
• Identify the impact on Councils (where information is available)
• Consider impacts, options and strategies for the future
• Discuss constraints, options and pathways for the future

Project distribution

A  working group with an officer from Salisbury, Onkaparinga and Marion, provided detailed review and project management for this project and the MAR User Group was provided with various draft stages and have been involved in editing and reviewing the report.

A presentation at startup was made to officers from Councils with Water Retail Licences issued by the Essential Services Commission of South Australia. These Officers and staff from SA Water, Golf Clubs, DEW and Morphettville Racecourse formed the Managed Aquifer Recharge Group. Updates were provided to the group regularly by myself as I now chair this informal Group. A final presentation was also provided to the group and the report was circulated along with the cost calculator.

A final report was also sent to LGA, DEW and ESCOSA.

The Report and cost recovery template could be used by Council to demonstrate that the price they charge for selling their treated stormwater complies with the National Water Initiative pricing principles and hence that they comply with their retail licence

Evaluation

The project evaluation was conducted through peer reviews from the  MAR User Group.

This project's final report and evaluation was completed on 10 June 2021