ACCC issues draft advice on water infrastructure charge rules

The Australian Competition and Consumer Commission today issued its draft water infrastructure charge rules and draft advice to the Minister for Climate Change and Water, for public consultation.

"The main objective in developing the water charge rules is to promote the economically efficient and sustainable use of water resources, the efficient use of, and investment in, water infrastructure, and to facilitate the efficient operation of water markets," ACCC Chairman, Mr Graeme Samuel, said today.

The ACCC is recommending a three tier approach to regulating water charges:

• Tier 1 rules will prohibit unfair price discrimination and require operators to publish water charges. These rules will apply to all operators in the Murray Darling Basin (MDB).
• Tier 2 rules will require operators to undertake forward planning and customer consultation before setting their water charges. Tier 2 will apply to the five largest member-owned operators in the MDB and one medium sized non-member owned operator.
• Tier 3 rules will require operators to have their charges approved or determined by the ACCC. These rules will apply to the three largest non-member owned operators in the MDB.

"In developing its proposed rules, the ACCC has had regard to current governance and charging arrangements. The ACCC has also sought to balance the costs and benefits of regulation for the various types of operators."

The release of this draft advice follows public consultation on two issues papers and a position paper during 2008. This is the final phase of consultation by the ACCC on the water infrastructure charge rules.

The ACCC welcomes submissions on the draft advice and draft rules as well as any other information that could assist and inform the minister. Interested parties are encouraged to provide their submission to the ACCC by 5 p.m. 8 May 2009.

Details on how to make a submission can be found in the draft advice, which will be available from the ACCC website.

The ACCC will hold a public forum in Sydney on 30 April 2009 to discuss its draft advice on water infrastructure charge rules. Further details about the public forum will also be available from the ACCC website. If you would like to be placed on the distribution list to receive updates on developments in this area, please send your email contact details to: water@accc.gov.au.

The Water Act 2007, which came into effect on 3 March 2008, creates new functions for the ACCC. These include the development of water charge rules and water market rules for consideration by the Minister; and for the ACCC to monitor compliance with and enforce of these rules. The Act also allows for the ACCC to advise the new Murray Darling Basin Authority on water trading rules.

As part of the next steps in the development of its advice on water infrastructure charge rules, the ACCC proposes to:

• hold a public forum on 30 April 2009 in Sydney to discuss the ACCC's draft advice
• provide final advice to the minister in June 2009.