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Final Report Seqwater Irrigation Price Review 2013-17 Volume 1

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Final Report Seqwater Irrigation Price Review 2013-17 Volume 1 Final Report Seqwater Irrigation Price Review 2013-17 Volume 1 April 2013 Level 19, 12 Creek Street Brisbane Queensland 4000 GPO Box 2257 Brisbane Qld 4001 Telephone (07) 3222 0555 Facsimile (07) 3222 0599 [email protected] www.qca.org.au The Authority wishes to acknowledge the contribution of the following staff to this report Matt Bradbury, William Copeman, Ralph Donnet, Mary Ann Franco-Dixon, Les Godfrey, Angus MacDonald, George Passmore, Matthew Rintoul and Rick Stankiewicz © Queensland Competition Authority 2013 The Queensland Competition Authority supports and encourages the dissemination and exchange of information. However, copyright protects this document. The Queensland Competition Authority has no objection to this material being reproduced, made available online or electronically but only if it is recognised as the owner of the copyright and this material remains unaltered. Queensland Competition Authority Glossary GLOSSARY A AAP Annual Accounts Payable AAR Annual Account Renewable ABS Australian Bureau of Statistics ACCC Australian Competition and Consumer Commission ACG Allen Consulting Group ACT Australian Capital Territory ACTEW Australian Capital Territory Electricity and Water ADWG Australian Drinking Water Guidelines AER Australian Energy Regulator AMF Asset Management Framework ARMCANZ Agriculture and Resource Management Council of Australia and New Zealand ARR Asset Restoration Reserve ASSET PLANS Asset Plans outline proposed capital and operating expenditure to deliver an entities’ Service Level Agreements. AUSTRALIAN BUREAU OF STATISTICS The Australian Bureau of Statistics (ABS) is Australia's official statistical organisation. AUSTRALIAN CAPITAL TERRITORY The Australian Capital Territory Electricity and Water (ACTEW) ELECTRICITY AND WATER Corporation supplies energy, water, and sewerage services to the ACT and surrounding region. AUSTRALIAN COMPETITION AND CONSUMER The Australian Competition and Consumer Commission (ACCC) COMISSION promotes competition and fair trade in the market place to benefit consumers, businesses and the community. It also regulates national infrastructure services. AUSTRALIAN ENERGY REGULATOR The Australian Energy Regulator (AER) regulates the wholesale electricity market and is responsible for the economic regulation of the electricity transmission and distribution networks in the national electricity market (NEM). AWTP Advanced Water Treatment Plant B BENCHMARK RETAIL COST INDEX The Benchmark Retail Cost Index (BRCI) for a particular year is the index used to calculate the total cost of electricity. BOOT Build-Own-Operate-Transfer BRCI Benchmark Retail Cost Index i Queensland Competition Authority Glossary BULK LOSSES Bulk Losses are losses which include storage losses resulting from evaporation and seepage. C CAB Cost Allocation Base CAPM Capital Asset Pricing Model CDSA Credit Default Swap Allowance CEO Chief Executive Officer CIS Corporate Information System CIT Central Irrigation Trust CM Corrective Maintenance COAG Council of Australian Governments COMMUNITY SERVICE OBLIGATIONS Community Service Obligations (CSO) are obligations on an entity to do anything that: (a) is not in the entity’s commercial interests to perform; and (b) arises because of – (i) a direction by the Minister or a joint direction by the Minister and Treasurer; or (ii) notice by the Minister of a public sector policy that is to apply to the industry; and (c) does not arise because of the application of the following key commercialisation principles and their elements. CONSUMER PRICE INDEX The Consumer Price Index (CPI) is a measure of changes, over time, in retail prices of a constant basket of goods and services representative of consumption expenditure by resident households in Australian metropolitan areas. CORPORATE INFORMATION SYSTEM Corporate Information System (CIS) is a new financial system implemented by Seqwater that enabled cost and other data to be captured and budgeted by asset location. CORRECTIVE MAINTENANCE Corrective Maintenance are maintenance tasks and associated expenditure relating to maintenance that is made in reaction to events or new information/inspections. COST ALLOCATION BASE The Cost Allocation Base (CAB) is the basis used to allocate costs to service contracts, where there is no direct causal link between costs and SunWater's business activities. COST PASS-THROUGH Cost Pass-Through mechanisms allow adjustments to prices during the regulatory period. COST RISKS Cost Risks relate to changes in market conditions for inputs (including those related to the maintenance and renewal of infrastructure) or as a result of regulatory imposts (such as changes in legislation, taxation and technical or economic regulation). CPI Consumer Price Index ii Queensland Competition Authority Glossary CRC Current Replacement Cost CSC Customer Service Committees CSO Community Service Obligation CVWB Crowley Vale Water Board CWSAs Critical Water Sharing Arrangements D DAM SAFETY MANAGEMENT PROGRAM The Dam Safety Management Program (DSMP) is a combination of policy, procedures and activities which, when methodically carried out, will ensure that each dam remains safe. It generally consists of the following activities: (a) Establishment and implementation of Standing Operation Procedures and Operation and Maintenance Manuals; (b) Ongoing dam condition monitoring; (c) Regular dam safety inspections; and (d) Regular dam safety review. DCF Discounted Cash Flow DELOITTE Deloitte Touche Tohmatsu DELOITTE TOUCHE TOHMATSU Deloitte Touche Tohmatsu (Deloitte) is a consulting firm which provides a broad range of audit, tax, consulting and financial advisory services to public and private clients DEMAND RISK Demand Risk occurs when customer demand for water is uncertain and can result in variations between actual and forecast revenues. DEPARTMENT OF ENERGY AND WATER The Department of Energy and Water Supply (DEWS) is the current SUPPLY Queensland Government department responsible for water planning and resource management. DEPARTMENT OF ENVIRONMENT AND The Department of Environment and Resource Management RESOURCE MANAGEMENT (DERM) is the Queensland Government department formerly responsible for water planning and resource management. DERM The Department of Environment and Resource Management (Queensland Government). DEPARTMENT OF NATURAL RESOURCES AND The Department of Natural Resources and Mines (DNRM) is the MINES Queensland Government department with responsibility for water planning and resource management. Refers to the department formerly known as Department of Environment and Resource Management. DEWS Department of Energy and Water Supply DIRECT COSTS Direct Costs are those costs that have been budgeted at the individual asset level. DIRECTION Ministerial Direction DIRECT LABOUR COSTS Direct Labour Costs (DLC) has been proposed by SunWater as the cost allocation base for non-direct costs for 2013-17. iii Queensland Competition Authority Glossary DISTRIBUTION LOSSES Distribution Losses are losses of water which occur when water is released or diverted through a Channel Distribution System or a pipeline system. The primary sources of distribution losses are through: (a) uncontrollable losses – evaporation, seepage, and overflows due to lack of customer usage after rainfall; (b) controllable losses – leakages from channels, pumps and/or broken pipes, un-metered or uncontrolled use, metering errors, overflows and ‘dumping’ of channel Water for maintenance requirements and for weed control management. DISTRIBUTION RETAILERS Distribution Retailers (DRs) are the retail distribution water companies (Unitywater, Allconnex Water and Queensland Urban Utilities). DLC Direct Labour Costs DNRM Department of Natural Resources and Mines (DNRM) DR Distribution Retailers DSMP Dam Safety Management Program E EBA Enterprise Bargaining Agreement ECM Efficiency Carry-Over Mechanism ECONOMIC REGULATION AUTHORITY The Economic Regulation Authority (ERA) is the independent economic regulator for Western Australia. EFFICIENCY CARRY-OVER MECHANISM The Efficiency Carry-Over Mechanisms (ECMs) allow the regulated firm to retain efficiency savings for a reasonable period of time. ELT Executive Leadership Team ENTERPRISE BARGAINING AGREEMENT An Enterprise Bargaining Agreement (EBA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves. ERA Economic Regulation Authority ERAWA Economic Regulation Authority of Western Australia ESC Essential Services Commission ESCOSA Essential Services Commission of South Australia ESCV Essential Services Commission of Victoria ESSENTIAL SERVICES COMMISSION The Essential Services Commission (ESC) is Victoria’s independent economic regulator of essential services supplied by the electricity, gas, water and sewerage, ports, and rail freight industries. ESSENTIAL SERVICES COMMISSION OF The Essential Services Commission of South Australia (ESCOSA) is SOUTH AUSTRALIA the independent economic regulator established by the State Government of South Australia to regulate prescribed essential utility services supplied by the electricity, gas, water, ports and rail industries. iv Queensland Competition Authority Glossary EXIT FEE Exit Fee or Termination Fee is a fee applied when a distribution system WAE is permanently transferred to the river (or in some cases to scheme sub-systems). F FAMPs Facility Asset Management Plans FACILITY ASSET MANAGEMENT PLANS The Facility Asset Management
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