Lower Murray Water - Part 6 of the Water Charge Rules decision and exemption consultation

Overview

On 8 September 2021, Lower Murray Water (LMW) notified the ACCC of its status under Part 6 of the Water Charge Rules 2010 (WCR) and applied for an exemption from the operation of the requirements of Divisions 2-4 of Part 6.

The ACCC is seeking stakeholder views to help it decide if LMW is or will be a Part 6 operator from 1 July 2023, and if so, whether the ACCC should grant LMW an exemption from the ACCC approving and determining LMW’s infrastructure charges.

Background

Under the Water Charge (Infrastructure) Rules 2010, in 2012 the ACCC accredited arrangements that allowed for the Essential Services Commission of Victoria (ESC) to regulate the prices of irrigation and bulk water delivery services provided by LMW and Goulburn-Murray Water. LMW’s infrastructure charges for the regulatory period 1 July 2018 to 30 June 2023 have been approved under this framework by the ESC.

On 1 July 2020, the Water Charge (Infrastructure) Rules 2010 changed. The intent of the revised rules is that appropriate regulatory oversight of operators is achieved by Basin States under Basin State law, where Basin State regulatory approaches ensure that relevant infrastructure operators’ costs are prudent and efficient and infrastructure charges are set at levels that would not allow the operator to earn monopoly returns.

Under the WCR, if an infrastructure operator meets the revised definition of a 'Part 6 operator' outlined in Rule 23, the ACCC will now be required to approve or determine the infrastructure operator’s regulated water charges, unless the ACCC grants the operator an exemption. The ACCC may only grant an exemption under Rule 23C if it is satisfied that the application of the Part 6 requirements would not materially contribute to the achievement of the Basin water charging objectives and principles set out in Schedule 2 of the Water Act 2007. In making an exemption decision, the ACCC must have regard to a number of factors, including:

• the total volume of water access rights in relation to which bulk water services are provided by the operator
• the total volume of water subject to water sharing arrangements in relation to which the operator provides infrastructure services
• the infrastructure services provided by the operator
• any preferences expressed by the operator’s customers to the ACCC
• any other views expressed by a State Agency to the ACCC
• whether the relevant law of a State is being transitioned so that the operator’s infrastructure charges will at a future date be determined or approved by a single State Agency in a way that is consistent with paragraph 29(2)(b) of the WCR
• the proportion of the infrastructure operator’s revenue to be recovered from infrastructure charges
• any other matters that the ACCC considers relevant.

The Water Charge Rules 2010 and Water Act 2007 are available at the Federal Register of Legislation:

• Water Charge Rules 2010
• Water Act 2007

For more information, see the ACCC website.

How to make a submission

The ACCC prefers submissions to be provided through this consultation hub.

Submissions may be addressed to:

Director
Water Regulation and Compliance
Australian Competition and Consumer Commission
GPO Box 3131
CANBERRA ACT 2601

Confidentiality

Please note this consultation is being conducted publicly and as such, submissions will be treated as public documents and published unless a claim of confidentiality is made and accepted, or a submission is withdrawn.

Please mark any information that you believe to be of a confidential nature, and provide reasons why this information should be treated confidentially. If the ACCC accepts your confidentiality claim, it will not publish or disclose the confidential information to third parties, other than advisors or consultants engaged directly by the ACCC, without first endeavouring to provide you with notice of its intention to do so, wherever possible, such as where it is compelled to do so by law.

If the ACCC rejects your confidentiality claim, you will be given the opportunity to withdraw your submission before it is published, or any information is disclosed.

The ACCC’s information policy includes information on the collection and disclosure of information.