Review of prices for the Water Administration Ministerial Corporation

Contents
Contents
1 Executive summary 1
1.1 Introduction 1
1.2 What is happening? 2
1.3 Why are water management prices increasing? 8
1.4 Structure of this report 19
2 Overview of the approach we used to set NOW’s prices 20
2.1 Decide on the length of the Determination period 21
2.2 Decide on water management charges 25
2.3 Decide on meter service and reading charges 29
2.4 Decide on consent transaction charges 30
2.5 Assess the impact of our pricing decisions 30
2.6 Decide whether we should establish reporting or other regulatory measures
over the determination period 31
3 Specific activities included in estimating the costs to be recovered through
water management charges 32
3.1 Summary of decision about which NOW activities to include in setting prices 33
3.2 NOW’s water management responsibilities and activities 34
3.3 IPART’s considerations in deciding which services should be included in
setting prices 36
3.4 IPART’s conclusions on the integrity of the information provided by NOW 40
3.5 Key activities and outputs included in NOW’s Monopoly Service Outputs
Schedule 41
4 The total efficient costs of providing NOW’s monopoly water management
services 44
4.1 Summary of decision on NOW’s notional revenue requirement 45
4.2 Forecast efficient operating expenditure 46
4.3 Opening and annual values for the regulatory asset base 65
4.4 Appropriate rate of return and allowance for a return on assets 72
4.5 Appropriate depreciation method, asset ages and allowance for regulatory
depreciation 74
4.6 Allowance for forecast contributions to the Murray-Darling Basin Authority
and the Dumaresq-Barwon Border Rivers Commission 75
4.7 Revenue volatility allowance 77
Review of prices for the Water Administration Ministerial Corporation IPART
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