South Australian Power Networks and SA Water submit a Regulatory Business Plan (RBP) to the Essential Services Commission of South Australia (ESCOSA) for a five year period. It is ESCOSA’s job to approve their plans and in so doing determine the amount of revenue they can earn. It is then up to the individual utility to decide how they will raise that revenue.
Both Utilities have made public their draft plans. Presently the spotlight is on SA Water. ESCOSA have issued a series of guidance papers intended to inform all stakeholders of the Commission’s initial positions on: principles, requirements and methodology on matters relevant to the determination. The guidance papers should be read in conjunction with the Framework and Approach paper released in July 2018.
SA Water has to take into account the matters sent out in the guidance papers when preparing its initial business plan, which will form the basis of consultations with its customers, stakeholders and other participants in the lead up to the making of ESCOSA’s determination.
The guidance papers issued to date are:
1. Overview of economic regulation of SA Water
Confirms the process for arriving at previous determinations and outlines future opportunities for stakeholders to provide input into the determination.
2. Revenue regulation and pricing principles
Explains how SA Water’s drinking water and sewerage revenues will be determined,
using a cost-based (building blocks) approach and informed by a negotiation process.
It also explains how the Commission will regulate the prices of SA Water’s
3. Service standards
Explains the Commission’s process for reviewing its principal consumer protection industry code: the Water Retail Code - Major Retailers, which include customer service standards.
4. Prudent and efficient expenditure
Explains the Commission’s approach to reviewing SA Water’s proposed expenditure to
assess whether it is prudent and efficient, to feed into the calculation of the maximum
revenue allowance. It provides context on the ‘negotiable’; and ‘non-negotiable’ elements
of SA Water’s costs, and provides an indication of some potential future cost drivers.
It also provides guidance to SA Water on the minimum information that is should provide
to the Negotiation Forum to allow it to assess whether proposed initiatives, programs and
projects are prudent and efficient.
5. The cost of funding and using assets
This paper explains the Commission’s methodology for determining the efficient cost of
funding and using assets to provide drinking water and sewerage services, in particular
the return on regulated assets.
Any person can make a submission to the Commission on any or all of the above and will be taken into account when the Commission makes its determination.
Alternatively if any member of Consumers SA has an issue they would like to put forward via
the association please email the details to: firstname.lastname@example.org
Copies of all the documents under discussion are available from the ESCOSA website: