ACCC’s draft advice on water charge rules to increase transparency, promote efficiency and reduce regulatory burden

24 November 2015

The Australian Competition and Consumer Commission has today released its draft advice on amendments to the Commonwealth water charge rules. This advice sets out the ACCC’s draft positions and seeks further submissions on proposed changes to the rules.

The water charge rules regulate the charges imposed on rural water users in the Murray-Darling Basin. The current rules have been in place for five years and charging practices have evolved significantly over that time. In December 2014, acting on a recommendation of the 2014 Independent Review of the Water Act 2007, the Government asked the ACCC to conduct a review of these rules.

The ACCC’s draft advice follows extensive stakeholder consultation. The ACCC conducted eight regional forums across the Basin, undertook private consultation with water service infrastructure operators, regulators and State Government departments and received twenty-eight public submissions in response to its Issues Paper. The ACCC also has drawn on information obtained through its monitoring role under the Act.

“Our draft advice is targeted at promoting efficient and sustainable use of water infrastructure, facilitating effective water markets and improving transparency of charging arrangements, while addressing the need to reduce the burden on the sector,” said ACCC Commissioner Sarah Court.

“In line with the review’s terms of reference, the ACCC has proposed changes which will reduce the red tape burden for infrastructure operators while increasing safeguards for irrigators and other water users.”

The draft advice sets out stakeholder views and the ACCC’s reasoning for proposals to:

  • promote a ‘level playing field’ by streamlining the application of the rules to apply to all infrastructure operators, by removing distinctions based on size, ownership structure and the purpose for which they deliver water.
  • remove overly-prescriptive reporting requirements on medium-sized operators to produce Network Service Plans. These plans were costly for operators and little-valued by customers.
  • improve pricing transparency requirements so that water users have confidence in how charges are determined, and how charges relate to service provision.
  • expand protections against charging arrangements that unfairly advantage some customers over others.
  • prevent discriminatory charges being unreasonably imposed by infrastructure operators when irrigators engage in trade.
  • reduce regulatory cost and complexity for infrastructure operators, by returning the role of regulatory determinations to the economic regulators in each Basin State where possible.
  • merge the three sets of water charge rules into one.

“Infrastructure operators are crucial to Australia’s agricultural sector and cost recovery is essential to their viability and effective service delivery to irrigators. However, the ACCC seeks to ensure that charging arrangements to recover costs are fair and transparent.”

The ACCC is seeking submissions on the proposed amendments to the rules as set out in the draft advice. Submissions should be provided to the ACCC by Friday, 5 February 2016. A copy of the draft advice, which includes details on how to make a submission, is available:Review of the water charge rules: advice development: draft advice

Following this consultation, the ACCC will provide its final advice (including final rule amendments) to the Minister in March 2016.

A project overview is here: Review of the water charge rules: advice development

Release number: 
MR 232/15
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