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Lawyers for local government

LG Alert – Extension of the 2013-2017 Price Determination (July 17th, 2018)

Councils licensed to provide water and sewerage services under the Water Industry Act 2012 as water industry entities will continue to have their pricing regulated by the “2013-2017 Price Determination for Minor and Intermediate Retailers” after a recent decision by the Essential Services Commission of South Australia (“ESCOSA”).

The Price Determination was made in June 2013 by ESCOSA and requires minor and intermediate licensees to comply with the “National Water Initiative Pricing Principles” when charging for the supply of water and sewerage services. Licensees must also report to ESCOSA on how they are complying with this requirement.

Originally, the Price Determination was to apply from 1 July 2013 to 30 June 2017.

In August 2016, ESCOSA commenced an inquiry to review the regulatory framework applying to licensees. One of the key considerations of the inquiry was the price regulation to be applied.

In June 2017, ESCOSA released a subsequent determination to extend the application of the Price Determination until 30 June 2018, to allow it to develop proposals for, and undertake public consultation on, potential changes to the current regulatory framework.

ESCOSA originally planned to release and consult with licensees on the changes identified in the inquiry prior to 30 June 2018. However, the inquiry remains ongoing.

Accordingly, ESCOSA considered it appropriate to make a “Subsequent Determination”, effective from 1 July 2018 to extend the application of the Price Determination until such time as the inquiry and public consultation process has occurred and a new price determination introduced. A copy of the Subsequent Determination is available here.

For now, councils can continue to operate as they have been, but the outcome of the inquiry is expected soon, with consultation on a new pricing determination following soon after.

To be kept informed of further developments, please contact Mark Henderson on 8113 7107 or mhenderson@kelledyjones.com.au.