annual report 2015 - department of energy and … of energy and water supply annual report 2014–15...

Department of Energy and Water Supply

ANNUALREPORT

2014

2015

CS4592 09/15

ISSN 2201-2095

Interpreter statement

The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the annual report, you can contact us within Australia on 13 QGOV (13 74 68) and we will arrange an interpreter to effectively communicate the report to you.

Public availability

Copies of the Department of Energy and Water Supply annual report are available online at www.dews.qld.gov.au. Limited printed copies are available by calling 13 QGOV (13 74 68).

Enquiries about this publication should be directed to Business Planning and Achievement, Business and Corporate Partnerships, Department of Energy and Water Supply.

Email: [email protected] Phone: 13 QGOV (13 74 68) Post: GPO Box 15456, CITY EAST QLD 4002

This publication has been compiled by Business Planning and Achievement of Business and Corporate Partnership, Department of Energy and Water Supply

© State of Queensland, 2015.

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The information contained herein is subject to change without notice. The Queensland Government shall not be liable for technical or other errors or omissions contained herein. The reader/user accepts all risks and responsibility for losses, damages, costs and other consequences resulting directly or indirectly from using this information.

Department of Energy and Water Supply annual report 2014–15 iii

Contents

Letter of compliance v

Director-General’s message vi

Departmental highlights 1

About the department 3Our vision 3Our purpose 3Our role 3Our customers 4Our services 4Our values 6Our operating environment 6Our strategic challenges and opportunities 7

Our performance 8Government’s objectives for the community 8The Queensland Plan 8Government commitments 9Other whole-of-government plans and specific initiatives 9

Agency objectives and performance indicators 10Objective 1: Focus on the energy and water consumers 10Objective 2: Transform the sectors 12Objective 3: Be the best 14Objective 4: Build partnerships 15Objective 5: Support regions 16

Looking forward: 2015–16 18

Financial performance summary 20Our financial performance 20Our income 20Our expenditure 21

Governance: Management and structure 22Organisational structure 22Executive Management Team 23EMT committees 24Other committees 26Business and Corporate Partnership Board 27Government bodies 27Public Sector Ethics Act 1994 27

Governance: Risk management and accountability 28Risk management 28External scrutiny 28Audit and Risk Committee 29Internal audit 30Information systems and recordkeeping 31

Governance: Human resources 32Workforce planning and performance 32Early retirement, redundancy and retrenchment 34

Open data 35

Department of Energy and Water Supply annual report 2014–15iv

Financial statements as at 30 June 2015 36

Appendix 1: Legislation administered by DEWS 81

Appendix 2: Government bodies 82

Appendix 3: Government-owned corporations 84

Appendix 4: Performance statement 85

Appendix 5: Report of the regulator’s activities under the Water Supply (Safety and Reliability) Act 2008 86

Appendix 6: Compliance checklist 90

Abbreviations and glossary 92

Contacts 93

Department of Energy and Water Supply annual report 2014–15 v

Letter of compliance

25 September 2015

The Honourable Mark Bailey MP Minister for Main Roads, Road Safety and Ports and Minister for Energy and Water Supply GPO Box 2644 Brisbane Qld 4001

Dear Minister Bailey

I am pleased to present the annual report 2014–15 and financial statements for the Department of Energy and Water Supply.

I certify that this annual report complies with:

• the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2009

• the detailed requirements set out in the Annual report requirements for Queensland Government agencies.

A checklist outlining the annual reporting requirements can be on page 90 of this annual report.

Yours sincerely

Paul Simshauser Director-General Department of Energy and Water Supply

Department of Energy and Water Supply annual report 2014–15vi

Director-General’s message

As the incoming Director-General, I am pleased to present the 2014–15 annual report for the Department of Energy and Water Supply (DEWS). This report outlines the valuable work the department has undertaken in the past year to provide better outcomes for energy and water consumers.

The 2014–15 year has seen DEWS work with a new government, Premier and Minister for Energy and Water Supply—it has also seen the department continue to transform from a policy-driven organisation to one that is customer-focused and results-driven. The achievements highlighted in this report are evidence of this transformation, which has been guided by the department’s Blueprint for better outcomes: putting water and energy customers first.

The blueprint, the objectives outlined in the department’s strategic plan and the Queensland Government’s objectives for the community have together provided a clear, shared vision for DEWS. This vision has enabled the department to better focus on meeting customer needs through innovation, engagement and partnerships.

The past year saw an increased focus on the role of renewable energy sources in Queensland. The department undertook work towards the introduction next year of a biofuel mandate in Queensland. The discussion paper, Towards a clean energy economy: achieving a biofuel mandate for Queensland, was released and a series of regional forums held to seek community input. Work began during the year to provide a more stable and welcoming regulatory environment to encourage private sector investment in renewable energy.

Solar energy has also become a focus for DEWS, and the department was involved in initiatives that will help the Queensland Government achieve its target of one million Queensland rooftops fitted with solar panels by 2020. Changes to policy enabled the approval of solar power purchase agreements for rooftop photovoltaic systems.

During the year, the department continued to address cost pressures on customers, particularly those in regional communities. Regional electricity prices remained subsidised and the uniform tariff policy that keeps regional prices in line with South East Queensland prices was retained. The department also played a part in the establishment of the Queensland Productivity Commission, which will conduct a public inquiry into rising electricity prices.

Steps were taken to protect water customers with legislative amendments to ensure that urban water meters are installed only by licensed plumbers, and during the year the department received the last of 83 drinking water quality management plans prepared and submitted by the state’s water service providers.

During 2014–15, regional water supply security assessments were published for Townsville, Cairns, Hervey Bay and Maryborough. These were developed in partnership with the relevant regional local councils and water service providers. These assessments address the changes and challenges facing the water sector (including population growth), and will help providers better plan for the delivery of secure water supplies in the future.

The department can be proud of the quality and breadth of work achieved in the past year. The electricity and water sectors are complex and face many challenges, but through a focus on partnerships, engagement and innovative solutions, DEWS will continue to achieve better outcomes for customers.

This past year provided many challenges for the department. I would like to thank staff for not only managing well in this changing environment, but for embracing new approaches. I would also like to acknowledge the contribution of my predecessor, Dan Hunt, in leading the department through this period of change with dedication and integrity.

I have no doubt the future will bring further reform of the water and energy sectors, but the department is well equipped to face this and continue delivering improved outcomes for customers and meeting government objectives.

Paul SimshauserDirector-GeneralDepartment of Energy and Water Supply

Department of Energy and Water Supply annual report 2014–15 1

Departmental highlights

In 2014–15, the department delivered the following key achievements.

The Energy service area:

• implemented agreed outcomes of the Inter-Departmental Committee on Electricity Sector Reform—as at December 2014, more than half of the 62 recommendations were implemented

• commenced development of a long-term tariff and metering reform strategy to give consumers a greater choice of options to manage their electricity consumption and bills, and provide improved price signals to improve the efficiency of the state’s electricity infrastructure

• delivered significant and ongoing savings through business and network efficiencies, reducing construction of unnecessary infrastructure and reforms to network reliability standards

• introduced laws safeguarding customer rights under a new National Energy Customer Framework

• represented Queensland’s interests at a national level through the Council of Australian Governments Energy Council

• continued to implement red-tape reduction initiatives.

The Water Supply service area:

• completed the initial implementation of the new emergency action plan regulatory requirement for the state’s 104 referable dams, and now has 99.65 per cent of the estimated persons at-risk covered by an approved emergency action plan

• finalised state-of-the-art optimisation studies for the Wivenhoe, Somerset and North Pine dams, which when implemented during an event, the improved operations of the dams have the potential to offer greater flood mitigation benefit and resilience for homes and businesses in Brisbane and Ipswich (as recommended by the Queensland Floods Commission of Inquiry)

• completed the review of the South East Queensland level of service for water supply security and implemented the government’s decision—the level of service was formalised by regulation on 3 July 2014

• developed guidelines for the Water Security Program to be developed by Seqwater

• continued water supply security assessments for priority regions to build local capability—seven assessments were commenced and four were completed during 2014–15

• completed the initial Total Asset Management Plan for the department’s non-commercial water assets and commenced implementation of the plan

• assessed the future management of the department’s non-commercial water assets

• completed stage two of the local management arrangements for SunWater’s channel irrigation scheme investigation

• completed prefeasibility investigations into potential new dams and dam upgrades to improve flood mitigation for Brisbane and Ipswich

• completed 36 of the 42 recommendations of the Queensland Floods Commission of Inquiry—the six remaining recommendations are all long-term initiatives that are underway

• simplified certain regulatory requirements for water service providers by replacing multiple process-based reports with an annual performance-based report

Department of Energy and Water Supply annual report 2014–152

• commissioned the independent economic regulator, the Queensland Competition Authority, to conduct a public inquiry and outline recommendations for bulk water prices and South East Queensland council-owned water companies

• approved 83 drinking water management plans for 83 small, medium and large water service providers

• implemented the South East Queensland streamlined water approval process, commonly referred to as the utility model, in the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009.

Following the 2015 Queensland state general election, DEWS moved quickly to focus efforts on implementing the new government’s direction, priorities and commitments. This new direction has broadened the scope of our work to include a clear focus on economic growth, job creation and managing the environmental impact of the energy and water sectors.

Key achievements already delivered under the change in energy and water policy direction include:

• consultation with the community on options to expand Queensland’s biofuels and bio-manufacturing industries

• industry and stakeholder engagement on the government’s renewable energy election commitments to inform delivery planning

• implementation of the government’s continued commitment to the uniform tariff policy, and related administration of community service obligation payments

• provision of support for the establishment of the Queensland Productivity Commission and its public inquiry into electricity prices

• increased funding for Energy and Water Ombudsman Queensland to deliver stronger protections and support for vulnerable electricity and gas customers, and South East Queensland water customers

• implementation of the government’s election commitment to ‘requiring installation of water meters be performed by a fully qualified and licensed plumber’.


About the department

The Queensland Government established the Department of Energy and Water Supply through a machinery-of-government announcement on 3 April 2012, under the Public Service Act 2008.

Our visionOur vision is for a prosperous Queensland through resilient and affordable energy and water supply sectors.

Our purposeOur purpose is to develop and deliver an enabling and customer-focused environment for the energy and water sectors in partnership with stakeholders.

Our roleIn support of this vision, DEWS provides a policy, regulatory and strategy platform that ensures Queenslanders have access to safe, reliable and affordable energy and water supply.

Since the establishment of DEWS in 2012, the department began to support the reform of the energy and water sectors. The department has:

• supported the economy and created jobs by focusing on solutions to combat costs and create employment and investment in the sectors

• reduced the regulatory burden and cost for our partners

• achieved greater safety, transparency and accountability

• investigated new ways to involve and understand our customers and meet their needs

• renewed the department’s focus on science, innovation and protecting the environment.

With the change of government in February 2015, the department focused its efforts on implementing the incoming government’s objectives for the community:

• creating jobs and a diverse economy

• delivering quality frontline services

• protecting the environment

• building safe, caring and connected communities.

• Integrity, accountability and consultation underpin everything the Queensland Government does.


Our customersDEWS Blueprint for better outcomes: putting water and energy customers first outlines the vision of the customer-centric agency the department wants to be. The blueprint recognises our customers as all Queenslanders who consume energy and water, and are protected through our dam and flood strategies.

Developed by DEWS employees, the blueprint allows staff to identify ways of working that enhances delivery of better outcomes for energy and water consumers. These are:

• involve customers and provide them with the information they need

• develop smarter tools and systems to access and analyse data, and use customer intelligence and strong evidence to support our decision-making

• review and innovate to meet changing customer needs

• develop the workforce of the future with the right skills and capabilities

• deliver a work program based on customer needs

• collaborate with partners and staff to embrace change and innovation.

Our servicesDEWS is responsible for overseeing Queensland’s energy and water industries to ensure these essential services are provided to Queenslanders in a safe, efficient and reliable way.

Following the change of government in 2015, the department ensured that it was able to adapt its implementation of services to align with the priorities of the new government.

As reported in the 2014–15 service delivery statements, the department’s services are delivered through two main service areas:

1. Energy

2. Water Supply

Energy

The Energy service area is responsible for policy development, reform and regulation of the Queensland energy sector to ensure cost-effective, secure and reliable energy supply. It is also responsible for establishing a long-term electricity strategy, informed by the outcomes of the government’s review of electricity sector reform to address cost-of-living pressures and the sustainability of the sector.

Energy delivers three services:

1. energy strategy—responsible for delivery and implementation of long-term electricity supply; delivery of a comprehensive electricity agenda to reduce price pressures on Queensland businesses, farmers and households via the Electricity Reform Implementation Program; and development and implementation of policy for renewable and alternative energy

2. energy supply and regulation—responsible for developing and implementing policy that directly affects the supply of electricity and gas, ensuring that effective emergency planning and response arrangements are in place, representing the Minister’s interests in state-owned energy entities, and influencing national energy agendas

3. energy pricing, consumer and retail—responsible for developing and implementing policy that has a direct effect on end-use consumers of energy, and developing and implementing policy affecting energy retailers and consumers, including policies to improve retail market competition, strengthen consumer advocacy and safeguard the interests of energy users.


Key outcomes sought include:

• cost-effective, secure and reliable energy supply in Queensland

• efficient and effective operation of electricity and gas markets

• robust emergency protocols in place for electricity, gas and liquid fuels emergencies

• reduced electricity demand growth and better utilisation of infrastructure, reducing the cost of providing electricity

• promotion of Queensland’s interests by influencing national energy policy development

• improved stakeholder and customer engagement and protection measures

• efficient regulation that does not place an unnecessary burden on industry

• clear, long-term strategy for Queensland’s electricity sector

• effective and sustainable reform of Queensland’s energy sector to improve cost-effectiveness for consumers, facilitate a competitive market and encourage innovation to drive efficiencies.

Water Supply

The Water Supply service area is responsible for implementing water sector reform to address cost-of-living pressures. It is also responsible for establishing a long-term strategy for Queensland’s water sector and regulating water supply services. Water Supply also responds to emergencies and emerging issues to enable timely decision-making by the government.

Water Supply delivers five services:

1. water sector planning—responsible for

− providing advice on possible temporary full supply levels for the state’s flood mitigation dams, and managing and reporting on the department’s response to the Queensland Floods Commission of Inquiry recommendations

− working with water service providers in relation to urban and industrial water supply security assessments for priority regions to identify the likelihood of reaching supply limits based on demand projections

− managing a suite of non-commercial water assets held by DEWS

2. water supply regulation—responsible for regulating the quality of drinking water supplied by registered water service providers, the quality of recycled water supplied by certain recycled water providers and the economic sustainability of critical water-related infrastructure in Queensland

3. dam safety regulation—responsible for registering, assessing and monitoring the safety of referable dam management in Queensland

4. water sector reform (legislation and policy)—responsible for developing and implementing policy on water issues, and facilitating changes to water supply and related legislation

5. water sector reform (economic advice)—responsible for providing economic evaluation and advice on bulk and rural water pricing and regulation, and representing the minister in state-owned water entities.

Key outcomes sought include:

• cost-effective, safe, secure and reliable water supply

• balanced flood risks and water supply risks through optimisation of the management of Wivenhoe, Somerset and North Pine dams

• effective planning for Queensland’s future water supply needs, including a long-term vision and strategy for Queensland’s water sector

• minimised liabilities and cost-effective management of the department’s non-commercial water assets

• efficient and effective water supply and dam safety regulatory framework that protects public health, promotes safety and minimises risks

• effective and timely policy, legislative and institutional reform that supports a strong and resilient water sector, which in turn meets the needs of customers

• limiting cost pressures on rural and bulk water prices

• effective stakeholder engagement.

To deliver benefits for Queensland, the department aims to achieve the following five objectives, as outlined in the DEWS strategic plan 2014–18:

1. focus on energy and water consumers

2. transform the sectors

3. be the best

4. build partnerships

5. support regions.


Our valuesDEWS embraces the Queensland public service values:

Customers first

DEWS will deliver policy and regulatory ideas that help ease cost-of-living pressures for water and energy users in Queensland.

Ideas into action

DEWS will implement new and innovative reforms that help the energy and water sectors evolve over the next 30 years.

Unleash potential

DEWS will be Australia’s best energy and water supply department, setting benchmarks that demonstrate our performance.

Be courageous

DEWS will support, encourage and reward innovative ideas in policy development.

Empower people

The DEWS leadership team will lead by example and set a clear vision for the future to empower and develop our staff to deliver real outcomes for Queensland’s energy and water users.

Figure 1: Queensland public service values

Our operating environmentQueensland also has the most geographically dispersed population of any Australian state or territory, with major centres outside the south-east region. South East Queensland has one of the fastest growing populations of any Australian urban area.

By 2044, Queensland’s population is expected to increase to 8.9 million people. In South East Queensland, this could see an increase to approximately 5.7 million people, and approximately 2.2 million people in regional Queensland.

Energy

Customers

• There are more than two million residential households and small business electricity and gas customers in Queensland.

• There are approximately 21 000 large electricity customers.

Generators, transmitters and distributors

• There are five government-owned corporations providing generation, transmission (including interstate interconnectors) and distribution network infrastructure (see Appendix 3).

• There are 86 electricity generators currently operating in Queensland, with 23 supplying electricity to the National Electricity Market—69 generators are privately owned by 52 different entities and 18 are owned by government-owned corporations.

• Of the 86 generators in Queensland, 54 are renewable (mostly small-scale biomass).

• There is a substantial gas transmission network with interstate interconnectors—Wallumbilla Gas Supply Hub, Brisbane Gas Short Term Trading Market (wholesale) and localised urban distribution networks.

• There are 37 active electricity and gas retailers.

• Queensland has the highest capacity of rooftop solar photovoltaic systems in Australia. There are around 400 000 households with solar photovoltaic systems—about 1.4 gigawatts of capacity.

Growth and geography

• Queensland has the highest rates of actual and forecast electricity demand growth in the National Electricity Market (5.6 per cent annually over the next three years), mainly due to liquefied natural gas/coal seam gas industry growth.

• Queensland is the only National Electricity Market jurisdiction operating in the tropical cyclone belt.


Water Supply

Customers

• More than 4.4 million customers are collectively serviced by a registered water service provider.

Catchment, treatment and storage

• There are 175 registered water service providers delivering potable water, non-potable water and/or sewerage services. They include local governments, government-owned corporations, statutory authorities and private businesses.

• There are currently 155 registered recycled water schemes.

• Seqwater and SunWater are state-owned bulk water entities. Seqwater owns and operates 26 dams for bulk water supply in South East Queensland. SunWater owns and operates 22 dams for bulk water supply outside South East Queensland.

• The Mount Isa Water Board and Gladstone Area Water Board are category 1 water authorities overseen by DEWS. The Mount Isa Water Board supplies bulk water to the Mount Isa City Council and industrial customers, while the Gladstone Area Water Board supplies treated and untreated water for domestic and industrial purposes to Gladstone Regional Council and local industries.

• There are currently 104 referable dams in Queensland subject to dam safety regulation. These range in size from small privately owned dams (i.e. farm dams) to large dams.

Growth and demand

• Demand for water over the long term will continue to grow, with increasing challenges and competing uses. Ensuring demand is met requires collaboration across the urban, mining, agricultural and industrial sectors.

• A key water security challenge is managing the long-term balance between water supply and demand. Working in partnership with service providers, the government will seek to facilitate urban and industrial water supply security assessments for regional communities.

Our strategic challenges and opportunitiesNine strategic risks were identified for inclusion in the department’s 2014–18 strategic plan:

1. implementing policy solutions to put downward pressure on the cost of living

2. ensuring that energy and water supply markets proactively anticipate changes in demand

3. engaging effectively with stakeholders and customers

4. matching internal capability and capacity with workforce requirements

5. influencing the government agenda to produce the best outcomes for customers

6. implementing accepted electricity sector reform recommendations

7. being innovative and keeping up with the pace of change

8. implementing cost-effective solutions that satisfy community expectations for safe and reliable infrastructure

9. using data effectively to understand customer needs and deliver better outcomes.

The strategic challenges and opportunities inform the management of risk in the department and are reviewed annually.


Our performance

Following the 2015 Queensland state general election, DEWS moved quickly to focus efforts on implementing the new government direction, priorities and commitments.

Government’s objectives for the communityThe department supports the Queensland Government’s objectives for the community by committing to establish and maintain a policy and regulatory environment for the energy and water sectors, and ensuring integrity, accountability and consultation underpin everything we do. In particular DEWS contributes to:

• creating jobs and a diverse economy and protecting the environment through delivering on the government’s commitments of A Solar Future, saving the Great Barrier Reef and supporting renewable energy and job-generating initiatives in the renewable energy industries—we will also focus on delivering the government’s commitment to grow Queensland’s biofuels and bio-manufacturing industries

• building safe, caring and connected communities through delivering on the government’s commitment to continue to provide funding towards the Queensland Water Regional Alliances Program for the next three years.

DEWS will also:

• continue to perform its regulatory functions by working with water service providers to ensure that drinking water is safe for use

• continue to perform its regulatory functions by working with dam owners to ensure the safety of their dams, and the safety of the people who live downstream

• review changes to the provision of electricity in remote areas to provide communities with a direct say in localised solutions.

The Queensland PlanDEWS’s policies, programs and services align with the Queensland Government response to The Queensland Plan. The response supports the government’s objectives for the community and identifies the priorities and key initiatives that will contribute towards implementing Queenslanders’ 30-year vision.

The department’s work program primarily focused on the government’s objectives for the community of creating jobs and a diverse economy, protecting the environment, and building safe, caring and connected communities.

The department has delivered the government’s election commitment of restoring standards in the plumbing industry. The department has also secured three years funding for the Queensland Water Regional Alliance Program to support regional council collaboration, knowledge and resource-sharing to identify cost-efficient measures to save councils money, better manage their water and sewerage assets, and improve customer service delivery.

The department begun stakeholder consultation on the government’s renewable energy and solar policy initiatives. Further detailed consultation will occur in the next financial year. The public inquiry into a 50 per cent renewable energy target by 2030 will help guide an overall policy framework to establish a long-term renewable energy future.

The department has provided input into the development of the State Infrastructure Plan, highlighting the opportunities for renewable energy in urban, regional and remote areas of Queensland.

The department is also progressing the government’s biofuels and bio-manufacturing policy. This policy will help retain and grow jobs in regional Queensland.

More information about departmental policies, programs and services can be found in the ‘Our services’ and ‘Agency objectives and performance indicators’ sections of this annual report.


Government commitmentsDEWS is the lead agency for 15 government commitments (11 energy-related and 4 water-related commitments), including 1 commitment relating to restoring standards in the plumbing industry that was delivered within the first 100 days of the new government. This commitment was about the requirement of water meter installation to be completed by a qualified and licensed plumber and was delivered through legislative changes to the Payroll Tax Rebate, Revenue and Other Legislation Amendment Bill 2015 passed by the Queensland Parliament on 2 June 2015.

The 11 energy commitments mostly relate to the government’s pre-election initiatives regarding A Solar Future, a renewable energy target and industry initiatives related to Saving the Great Barrier Reef, a continued commitment to the uniform tariff policy and the merger of Ergon and Energex’s headquarters in Townsville.

DEWS water-related commitments include providing state funding towards the Queensland Water Regional Alliances Program for the next three years at $600 000 per year, an assessment of Nullinga Dam for additional water storage in Tropical North Queensland, and continuing to progress the policy to transfer the SunWater channel irrigation schemes to local control. DEWS has engaged the Queensland Treasury Corporation to undertake the initial assessment of Nullinga Dam.

The first status report on the delivery of government commitments (as at 30 June 2015) will be published online later in the year.

Other whole-of-government plans and specific initiativesQueensland is a signatory to the National partnership agreement on energy efficiency between the federal government and all states and territories. The agreement aims to deliver cost-effective energy-efficiency gains through a nationally consistent and coordinated approach, while recognising the need for flexible approaches across jurisdictions.

Under the agreement, the National strategy on energy efficiency was developed. The strategy includes a series of nationally agreed measures to help identify and implement improvements in energy efficiency for households and businesses to improve the productivity of the economy, achieve savings on energy bills and deliver significant low-cost greenhouse gas abatement. Such measures include minimum energy performance standards and energy labelling for appliances and equipment, energy-efficient building codes and the availability of general information to help customers make cost-effective energy decisions.

All jurisdictions contribute funding to an agreed formula (50 per cent funded by the federal government and 50 per cent on a per capita basis from each jurisdiction). In 2014–15, Queensland’s contribution to national equipment energy-efficiency work was $160 476 (including GST).


Agency objectives and performance indicators

The DEWS strategic plan for 2014–18 sets out five strategic objectives:1. focus on the energy and water consumers 2. transform the sectors 3. be the best 4. build partnerships 5. support regions.

Objective 1: Focus on the energy and water consumers

Energy

• The uniform tariff policy that keeps regional power prices in line with South East Queensland prices has been retained through subsidy in regions.

• The Queensland Government has established the Queensland Productivity Commission, with its first task to conduct a public inquiry into rising electricity prices. DEWS led the development of the terms of reference for the inquiry and has provided staffing resources to the commission.

• DEWS released a discussion paper outlining plans for an ethanol mandate to grow the biofuels and bio-manufacturing industries in Queensland.

• DEWS is providing a welcoming regulatory environment to encourage private sector investment in renewable energy.

• DEWS commenced a review to investigate whether the provision of electricity in remote areas can be opened up to competition from local governments, which would provide communities with a direct say on localised solutions (including the facilitation of off-the-grid technologies).

• The Interdepartmental Committee on Electricity Sector Reform recommendations were delivered on time. As at December 2014, DEWS had completed its tasks in relation to 34 of the 62 recommendations and remained on schedule for delivery of all recommendations by mid 2016. The previous government handed down its response to the committee’s report in 2013.

Ethanol mandate

In May 2015, the department released a discussion paper, Towards a clean energy economy: achieving a biofuel mandate for Queensland, inviting industry and consumer feedback on the government’s proposed introduction of an ethanol mandate for Queensland. The paper also sought input into other ways government can help support the state’s biofuels and bio-manufacturing industries.

The government’s plan is to establish an initial two per cent ethanol mandate, an appropriate level to provide support to producers and allow for a gradual increase in supply and demand over time.

In June 2015, following the release of the discussion paper, consultation included 9 regional forums and 3 industry workshops, attracting over 300 participants and resulting in 88 submissions from a range of stakeholders.

Energy Savers Plus Program

In December 2014, a memorandum of understanding was signed between DEWS, the Department of Agriculture, Fisheries and Forestry, Ergon Energy, Queensland Farmers’ Federation and AgForce to work together on energy-related issues facing farmers and irrigators.

The $2.69 million Energy Savers Plus Program provides energy audits for energy-intensive agriculture segments—such as cane, cotton, horticulture, nursery, dairy, chicken meat, chicken eggs, piggeries, aquaculture, feedlots, turf farms and prawn farms—to improve on-farm energy usage.


Findings from the program are to be shared with all farmers and irrigators across regional Queensland to pass on the benefits of adopting new and more efficient technologies to manage and reduce electricity consumption.

Solar power purchase agreements

To encourage the use of rooftop solar power, a new framework that allows authorised solar providers to offer deals that involve no lump sum payments from customers was introduced during the year.

Solar power purchase agreements are contractual arrangements under which an authorised provider installs, owns, operates and maintains a solar photovoltaic system at a customer’s premises and the customer agrees to buy all of the electricity generated by the solar system at a set rate over an agreed period of time.

Available to both commercial businesses and households, the agreements mean customers don’t need to spend thousands of dollars up front to benefit from rooftop solar electricity.

Water

• Of the state’s water service providers, 46 per cent have a new published customer service standard online.

• Of an estimated population of 548 530, the 99.65 per cent at-risk if a water supply dam fails are now covered by an approved emergency action plan.

• All of the state’s drinking water services have appropriate drinking water quality monitoring and response frameworks in place.

• DEWS reviewed the South East Queensland customer water and wastewater code to improve customer protections and clearly state service provider and customer rights and obligations. A revised code was released for public consultation.

• DEWS progressed legislation to determine water meter installations.

Draft customer water and wastewater code

The Draft South East Queensland customer water and wastewater code was released for comment in May 2015. The draft code is the result of a 2014 review of the existing code. Public submissions in 2014 and stakeholder input were considered when preparing the draft code, which has been revised to:

• improve the structure and readability of the code

• clearly state the rights and obligations of South East Queensland service providers and residential customers

• outline minimum service standards for water and wastewater services to be achieved by South East Queensland service providers.

The draft code applies to small customers and the South East Queensland region’s five water service providers, and sets out their respective rights and obligations in relation to water and wastewater services.

A small customer under the draft code is a residential customer whose property is in South East Queensland and who has a direct billing relationship with a South East Queensland service provider.

The five service providers subject to the draft code are:

1. Queensland Urban Utilities

2. Unitywater

3. Gold Coast City Council

4. Logan City Council

5. Redland City Council.

Plumbing and Water Industry Legislation Amendment Bill 2015

Delivering on an election commitment, the Queensland Government has clarified that only a licensed plumber will be able to install a water meter to a home or business. Water meters are a critical part of water infrastructure connecting the water supply system to household plumbing. The proposal provides certainty to the plumbing and water industry on who can install water meters.

South East Queensland bulk water prices

The bulk water price is the price that council-owned water businesses pay to purchase water from the government via Seqwater. Council-owned water businesses pass on the bulk water charge to their customers.

The government has set the next three years of bulk water prices for South East Queensland in accordance with the bulk water price path policy that began in 2008.

The 2015–18 prices set by the government are based on prices recommended by the independent Queensland Competition Authority, to apply from 1 July 2015 to 30 June 2018.

These prices are now lower across the south east than the prices forecast in 2013. Seqwater (the bulk water supplier) was able to reduce the cost of its operations and found additional cost savings through the recent Queensland Competition Authority’s investigation.


Objective 2: Transform the sectors

Energy

• DEWS led energy sector reform through the implementation of longer term energy strategy actions with clear objectives around market efficiency, governance effectiveness and improved customer outcomes.

• DEWS appointed the Energy Expert Panel to provide future-focused, strategic guidance and ensure the long-term success of the energy strategy by critically examining emerging challenges and opportunities.

• DEWS progressed the development of support mechanisms for consumer advocacy through a contract with the Queensland Council of Social Service and the Chamber of Commerce and Industry Queensland.

• As at December 2014, more than half of the 62 recommendations of the Interdepartmental Committee on Electricity Sector Reform were implemented.

• DEWS achieved significant and ongoing savings through business and network efficiencies, reducing construction of unnecessary infrastructure and reforms to network reliability standards.

• DEWS introduced laws safeguarding customer rights under a new National Energy Customer Framework.

• DEWS consulted with the community on the expansion of Queensland’s biofuels and bio-manufacturing industries.

• DEWS implemented the government’s continued commitment to the uniform tariff policy.

• DEWS provided support for the establishment of the Queensland Productivity Commission.

Consultation on solar initiatives

During the year, the department began work on initiatives outlined in the government’s A Solar Future policy. It held a renewable energy industry roundtable event on 27 May and an industry forum on 10 June—with key stakeholders from across the state and local government, the renewables sector, the energy industry, academic institutions, conservation peak bodies and consumer groups.

These sessions provided valuable stakeholder input and have been used to inform the government’s renewable energy policy agenda.

Energy legislation review

A significant and important piece of work to review the state’s energy laws began during the year. The review will involve a comprehensive examination of six pieces of legislation and associated subordinate legislation, to consider how well the regulatory framework serves the state’s current needs and responds to future challenges.

Prior to the end of the financial year, staff in the department commenced project planning for the review and completed scoping for an issues paper due for release later in 2015.

Stronger protections for energy customers through the National Energy Customer Framework

From 1 July 2015, Queensland electricity customers will have greater protection, and residents in South East Queensland will have more support to help them shop around between electricity retailers to get the best deal to suit their needs.

The introduction of new protective measures for energy consumers follows Queensland’s decision to sign up to the National Energy Customer Framework. Under the national framework, South East Queensland electricity retailers will be required to offer at least one market contract with no exit fee if a customer decides to switch providers, while all exit fees are capped at $20.

Retailers will also be required to inform customers ahead of any price increases and cannot charge customers up-front for meter tests.

Electricity Expert Panel

Establishment of the Electricity Expert Panel was an important step in the delivery of early actions identified in the long-term energy strategy. The panel was established in August 2014. It was tasked with identifying emerging trends and challenges in the electricity sector, and recommending the best actions to help create a more affordable and reliable power supply for Queensland families and businesses. Support was provided to the panel by DEWS and a 100-day action plan was developed. An initial report on tariff settings was also released.

Energy customer advocacy funding

During the year, a $750 000 funding package to provide strong advocacy for energy and water customers was introduced.

A two-year customer advocacy partnership between the Queensland Council of Social Service and the Chamber of Commerce and Industry in Queensland was allocated $300 000. Working together, they will ensure small business and residential consumers are informed about key electricity reforms and can access advice and support so they can benefit from these reforms.


An extra $450 000 will enable the Queensland Council of Social Service to deliver a two-year program to build the capacity of community service organisations to provide information and education for vulnerable residential energy users across Queensland and water customers in South East Queensland.

Water

• DEWS led water sector reform through the implementation of longer term water strategy actions for Queensland’s water sector, which set out a long-term vision for a sector that supports increased productivity, economic growth, strong and healthy communities, and a natural environment that is valued.

• DEWS commenced implementation of the performance outcome framework for water service providers.

Water Expert Panel

A Water Expert Panel was established as part of the long-term water strategy to help foster innovation in the water sector and encourage Queensland-specific, fit-for-purpose solutions given the sector’s diversity.

Key performance indicator framework

The department implemented legislation to introduce a new regulatory framework for water service providers, which will replace a number of management plans with a reporting framework based on key performance indicators. Service providers are currently submitting their first round of key performance indicators that will be used to inform regulatory decisions and the department’s first comparative report, which will benchmark service providers across the state.

Customer water and wastewater code

The department conducted a review of the South East Queensland customer water and wastewater code to improve customer protections and clearly state service provider and customer rights and obligations. A revised code was released for public consultation.

Water sector reforms implemented utility model

The department implemented legislation to provide for a streamlined water and sewerage connection approval process for South East Queensland distributor–retailers (the utility model), and the associated infrastructure charging framework for distributor–retailers.

Strategic Advisory Committee

During the year, DEWS established a Strategic Advisory Committee with industry and service providers. The committee provides advice on water sector issues and stakeholder feedback regarding select key programs/initiatives of the department, including:

• non-potable water supplies information sheet

• trip schedule (as part of support program)

• certification guidance tool (competencies for operators)

• water quality monitoring spreadsheet for Indigenous operators

• communication strategy for performance reporting reminders

• penalty infringement notice fact sheet and letter

• E. coli field test information sheets

• letter about a dedicated service provider contact at the water supply regulator

• fact sheet on introducing the performance framework

• comparative reporting fact sheet

• fact sheet on conducting a review of a drinking water quality management plan

• customer service standards fact sheet

• key performance indicator presentation for financials

• compliance plan (DEWS and water supply regulation).

Across the department

Director General’s Innovation Challenge

During 2014–15, the department progressed the Director-General’s Innovation Challenge on complaints-handling with retail representatives from the energy and water sectors. The forum focused on what we’re doing now, the areas we can improve and innovative approaches to reduce complaints and provide more targeted information to our customers. In line with the blueprint, DEWS is ready to take a fresh look at what we do as a department and how to work with partners to deliver the best possible outcomes for customers.

Regulatory count reduction

DEWS continued to work towards the regulatory count reduction target. An official whole-of-government count has not been conducted since July 2014.


Objective 3: Be the best

Our people and culture

• DEWS continually improved departmental business systems and processes by implementing a number of internal and external business improvements, such as implementation of performance and development plans with staff, improvements in applying analytics across DEWS and establishment of clear guidelines and procedures for engaging with energy stakeholders.

• DEWS embedded a high-performance culture within the department through the implementation of the blueprint released to staff in early September 2014.

• DEWS continues to experience levels of unscheduled leave below the public sector average.

Performance and development plans

The annual Public Service Commission’s Working for Queensland Employee Opinion Survey provides suitable information in relation to the department’s performance and development plan process. The 2015 results of the survey indicated that 70 per cent of departmental staff have received scheduled performance feedback in the past 12 months. This is 7 per cent higher than the Queensland public sector average.

Recently, functionality has been made available through the Employee Self Service to electronically manage and store our people’s performance and development plans. In the future, this will provide another mechanism to accurately identify the percentage of employees with personal performance and development plans.

Staff engagement

The implementation of, and ongoing commitment to, the transformation of workplace culture through the six dedicated work programs to embed the department’s blueprint and High Performance Framework has had significant positive impact on staff engagement. The 2015 Working for Queensland Employee Opinion Survey indicated that 50 per cent of staff had positive engagement with DEWS, an increase of 20 per cent since 2013. In particular, since 2013 there has been a 22 per cent increase in staff feeling inspired by the organisation to do the best in their job.

Cultural change

In 2014–15, the department saw rapid transformation of workplace culture by implementing six dedicated work programs to embed the department’s blueprint and High Performance Framework. Transparency, performance and accountability of these work programs were assured through amendments to the department’s governance framework, and up-to-date information on progress is communicated to staff through a web portal.

1. Workforce

Largely driven by the High Performance Framework Steering Committee, there are six major work programs focusing on building the workforce of the future. Major achievements included:

• releasing a capability framework in March 2015, developed specifically for us to ensure that we have a common framework and behaviours that complement our values and align to our blueprint

• developing the department’s Learning and Development Portal, which showcases the range of learning and development opportunities available across the department

• reviewing performance and development plans

• refreshing business planning and performance across the department.

Leadership

Skills andcapability

Learning anddevelopment

Individualperformance

Business planning and performance

Reward andrecognition

Figure 2: High Performance Framework major work programs

2. Customer engagement

Through the Online Committee, the department commenced an extensive rewrite and redesign of its website to allow customers to more easily access information of relevance to them. This was supported by training in online writing for customers, which was made available to all staff.

http://dewsintranet/hr/performance-development/capability-framework


3. Innovation and review

During 2014–15, the department established the DEWS Innovation and Science Committee to ensure research and development, and new technologies are translated into improved policy, program delivery, regulatory practice and service delivery.

An Energy Legislative Review Panel was also established to ensure ongoing relevance and flexibility in a rapidly changing sector.

4. Data and analytics

During 2014–15, the Data and Analytics Consultative Committee was established to develop business requirements that will allow for the future development of a data-centric culture. A number of pilot programs are currently being implemented across the department to develop capability in four key areas:

1. collect—obtaining (additional/specific) data from partners and/or customers

2. collate—recording, storing and evaluating data

3. analyse—selecting, integrating (comparing) and interpreting data to explain, predict, understand or support decisions/outcomes

4. share—reporting on findings and sharing knowledge and datasets with other teams, partners and customers.

5. Collaboration

A number of divisional and departmental initiatives were undertaken during 2014–15 to improve both internal and external collaboration, and ensure we are working across boundaries to create products that are the results of the efforts of multiple teams. These include the trialing of matrix management modelling in the Energy division.

Objective 4: Build partnershipsDEWS promoted and valued active stakeholder engagement through the annual survey of key stakeholders, including representatives from industry, government agencies and the community. Engagement with these stakeholders, in this context, is defined as participation in the department’s key programs and initiatives—92 per cent of stakeholders were either satisfied or very satisfied with DEWS engagement on key programs and initiatives (see Appendix 4).

Energy

• DEWS partnered with the Queensland Council of Social Service to improve support for vulnerable customers and inform customers of changes in the electricity market.

• The Electricity Expert Panel was established to help deliver the long-term energy strategy. The panel also helped identify new opportunities to improve outcomes for energy customers.

Water

• DEWS refined a support program to help water service providers meet certain regulatory requirements (e.g. drinking water quality).

• The Water Expert Panel was established to help deliver the long-term water strategy. The panel also helped identify new opportunities to improve outcomes for water customers.

• A Strategic Advisory Committee was established in August 2014. The committee’s focus is to provide advice on water sector issues, as well as stakeholder feedback on select key programs/initiatives of the department.

• DEWS is nearing completion of modernising the dam safety regulators’ computerised information management system for the state’s 104 referable dams. This will enable more timely information about the dams’ regulatory and underlying safety status.

• The department continued to participate in the national performance reporting process for water service providers, and played a significant role in streamlining and refining the indicator set and reporting process.


Objective 5: Support regionsDuring 2014–15, the state faced the challenge of extreme weather events, including tropical cyclones Marcia and Nathan. All energy and water entities were well prepared for these events.

All community infrastructure designation applications (that satisfied the requirements for robustness) were reviewed and processed for consideration and approved by the minister within a four-month period.

Energy

• DEWS supported a welcoming regulatory environment to encourage private sector investment in renewable energy and support economic growth in the regions.

• DEWS provided support for the establishment of the Queensland Productivity Commission and conducting a public inquiry into rising electricity prices.

• DEWS committed to a review to investigate whether the provision of electricity in remote areas can be opened up to competition from local governments, which would provide communities with a direct say on localised solutions (including the facilitation of off-the-grid technologies).

Long-term energy strategy

Three of the high-level goals of the long-term energy strategy related to improving consumer value, improving market efficiency and better government. Building on these goals, the Queensland Government has also clearly outlined its focus on economic growth, innovation and protecting the environment. The current review of the strategy will consider this realignment as we move to deliver key government commitments within a broader strategic framework.

Water

• In line with a recommendation of the Queensland Floods Commission of Inquiry, there is a legislative requirement under the Water Supply (Safety and Reliability) Act 2008 for dam owners to have an approved emergency action plan for each referable dam. DEWS has made emergency action plans available online at www.dews.qld.gov.au.

• DEWS provided assistance with implementation of approved drinking water quality management plans to 16 Indigenous providers and small and medium providers through the support program.

• DEWS provided funding for the Cooperative Research Centre for Water Sensitive Cities to undertake an ideas workshop for the Ripley Valley. The workshop was aimed at addressing the challenges facing urban development at Ripley.

Long-term water strategy

At the time of the strategy’s release in June 2014, there were 22 actions to be delivered over a five-year period, commencing in 2014.

The actions that have been completed relate to regulatory reforms or improvements, while those underway focus on supporting service providers in regional communities and exploring statewide customer-related issues.

Two regionally focused initiatives identified in the long-term water strategy have been implemented:

1. Regional water supply security assessments in defined priority regions have been delivered and published in partnership with local governments—four assessments delivered and published for Cairns, Townsville, Hervey Bay and Maryborough

2. Queensland Water Regional Alliances Program funding from the Queensland Government will continue for another three years.

Dam optimisation studies

In November, state-of-the-art optimisation studies for the Wivenhoe, Somerset and North Pine dams were released by the department.

These studies were a recommendation of the Queensland Floods Commission of Inquiry. The optimised operational strategies identified through the optimisation study have been incorporated into the flood mitigation manuals for North Pine Dam and the Wivenhoe and Somerset dams. When implemented during flood events, these improved operational strategies have the potential to increase the flood mitigation and resilience of homes and businesses in communities downstream of the dam. They are based on complex engineering investigations designed to find the best balance between securing water supply, providing flood mitigation and saving lives by protecting the dams.

The studies were developed following a three-month community consultation period, during which local residents, property owners and affected councils largely supported the preferred options.

The Wivenhoe and Somerset dams optimisation study was winner of the ‘Integrity and Accountability’ category at the 2014 Premier’s Awards for Excellence.


Regional water supply security assessments

The Regional Water Supply Security Assessment Program is a partnership with regional local governments and water service providers initiated by DEWS in February 2014.

During the year, four assessments were published. The first two were the Cairns assessment in October and the Townsville assessment in November. Cairns was chosen due to its high potential for growth and the serious consequences of a water supply shortfall. Townsville was assessed due to its high potential for growth, its track record of proactively planning for water supply security and the serious consequences of a water supply shortfall for Queensland’s largest regional community.

Assessments for Hervey Bay and Maryborough were published in May, providing both communities with analysis that confirms they have a high level of water supply security to take them into the next decade.

More assessments are planned for release in 2015–16.


Looking forward: 2015–16

Towards the end of 2014–15, DEWS revised their strategic plan to deliver on the Queensland Government’s objectives for the community.

The department’s objectives for 2015–16 are:

• customer focused outcomes—committed to engaging with, and learning about, customers to provide better services to support improved outcomes

• support economic and jobs growth—committed to establishing and maintaining a policy and regulatory environment that promotes economic and jobs growth, while protecting the environment

• innovative solutions—committed to empowering our people and partners to develop innovative solutions that produce better outcomes for customers and industry, the economy and the environment

• partner effectively—committed to working with our partners to ensure the best possible outcomes for customers

• be the best—committed to building the capacity of our workforce to ensure we can be the best at performing our role, now and in the future.

During 2015–16, the department will continue to focus on:

• implementing the Queensland Government’s energy and water supply related election commitments

• implementing a biofuels mandate for Queensland and undertaking an education campaign to support the take-up of biofuels by Queensland consumers

• developing the Queensland Government’s energy strategy and implementing key water-related government commitments

• supporting the Local Government Association of Queensland as part of the Queensland Water Regional Alliances Program

• establishing and maintaining a policy and regulatory environment that protects vulnerable customers and continuing an effective working relationship with Energy and Water Ombudsman Queensland.

The Energy service area will focus on:

• improving the state’s regulatory environment and improving its performance in engaging with the community and regulating compliance with Queensland’s energy legislation

• planning and beginning to implement key government commitments relating to energy

• - continuing regional power prices subsidies and maintaining the uniform tariff policy to keep regional power prices in line with metropolitan prices

• - keeping the headquarters of a merged energy government-owned corporation in Townsville and supporting the delivery of the government’s commitment to merge the energy government-owned corporations

• - providing a stable and welcoming regulatory environment to encourage private sector investment in renewable energy

• maintaining support for the Clean Energy Finance Corporation and advising government on the Australian Government’s Renewable Energy Target

• supporting the instigation of a review into a fair price for solar through the independent Queensland Productivity Commission

• supporting the commencement of a renewable energy study to investigate policy measures to support the creation of an export-oriented renewable energy economy—the study will include establishing an independent inquiry into the adoption of a target of 50 per cent renewable energy by 2030

• developing options and advising government on a trial 40 megawatt renewable energy auction to support private investment and jobs in the renewable energy industry

• supporting a review to investigate whether the provision of electricity in remote areas can be opened up to competition from local governments, which would provide communities with a direct say on localised solutions (including the facilitation of off-the-grid technologies)—this review will include consideration of a legislative mechanism for local governments to take control of their power generation and distribution needs

• planning and beginning to implement measures to support the aspirational target set by the government for one million Queensland rooftops to have solar panels by 2020


• providing advice on a better functioning and more dynamic domestic gas market

• leading the development of biofuels and the expansion of Queensland’s biofuels and bio-manufacturing industries.

The Water Supply service area will focus on:

• commencing upgrade works for two of the department’s non-commercial assets

• commencing five regional water supply security assessments

• preparing a preliminary assessment, for consideration by Building Queensland, of the proposed Nullinga Dam

• undertaking actions relevant to the department arising from the Queensland Government’s consideration of the independent review into Callide Dam operations during the flood arising from ex-tropical cyclone Marcia, and the independent review into SunWater’s and Seqwater’s flood-related communications

• implementing a regulatory system, including publication of results for reporting key performance indicator information for certain water service providers

• implementing the review recommendations for the Water and sewerage services code for small customers in South East Queensland

• commencing the independent review of the South East Queensland streamlined water approval process, which allows for development conditioning and approvals for water and sewerage connection to distributor retail networks

• progressing the local management arrangement project, which involves the potential transfer of selected SunWater channel irrigation schemes

• identifying new and emerging water sector issues for progression as key actions through the long-term water strategy review

• reviewing the regulatory framework for the delivery of water supply and sewerage services by new private sector providers.


Financial performance summary

The financial statements included in this annual report contain comprehensive financial data on: • controlled entity, which refers to the funds and assets within the control

of the department• administered activities, which refers to activities the department does not control

but is charged with administering the funds on a whole-of-government basis.

Our financial performanceThe department supports the Queensland Government’s objectives for the community by committing to establish and maintain a policy and regulatory environment for the energy and water sectors, and ensuring integrity, accountability and consultation underpin everything we do.

Our incomeIncome for 2014–15 was $45.3 million (2013–14: $63.4 million) and was predominantly departmental services appropriation to deliver energy and water supply services. This is lower than last year primarily due to lower drawdown of appropriation from the consolidated fund, caused by decrease in expenditure for grants and subsidies.

Figure 3 illustrates the different categories of income.

Figure 3: Departmental income, 2014–15

Appropriation revenue ($40.5 million)

Grants and other contributions ($4.2 million)

Other revenue ($0.6 million)


Our expenditureExpenses for the year amounted to $45.3 million (2013–14: $62.8 million). Lower expenditure in 2015 was primarily due to the finalisation of the dam spillway upgrade program. The primary expenses were employee costs, supplies and services, and grants and subsidies.

Employee expenses include salaries, related taxes and superannuation contributions, totalling $24.7 million (2013–14: $27.2 million), which represents 54.6 per cent of total expenses. Supplies and services for 2014–15 totalled $9.3 million (2013–14: $11.2 million), 20.7 per cent of total expenditure. Payments to contractors and consultants of $2.7 million and accommodation expenses of $2.7 million were the predominant expenses within supplies and services (57.5 per cent). Grants and subsidies expenditure totalled $6.4 million (2013–14: $22.5 million) and represented 14.1 per cent of total expenditure.

Payment to the Australian Energy Market Commission was the predominant expense within grants and subsidies (68.1 per cent). This represents Queensland’s share of the commission’s costs, which is recovered from electricity and gas transmission entities.

We remain committed to managing our financial performance and minimising our liabilities and risks. Our financial performance is closely monitored within our corporate governance framework to align with departmental priorities.

Figure 4 illustrates the different categories of expenditure.

Figure 4: Departmental expenses, 2014–15

Employee expenses ($24.7 million)

Supplies and services ($9.4 million)

Grants and subsidies ($6.4 million)

Other expenses ($4.6 million)

Depreciation and amortisation ($0.2 million)


Governance: Management and structure

Organisational structureDEWS is responsible for overseeing Queensland’s energy and water industries to ensure these essential services are provided to Queensland consumers in a safe, efficient and reliable way. The department’s services are delivered through two divisions—Energy and Water Supply.

The objective of the Energy division is to develop policy and reform, and regulate the Queensland energy sector to ensure cost-effective, secure and reliable energy supply.

The objective of the Water Supply division is to implement water sector reform to ensure the delivery of safe, reliable and cost-effective water supplies, the safe management of referable dams and planning for water supply security and flood mitigation.

Figure 5: DEWS organisational structure as at 30 June 2015

Director-GeneralDepartment of Energy and Water Supply

Dan Hunt

Deputy Director-GeneralEnergy

Karen MasnataBenn Barr (acting)

Deputy Director-GeneralWater SupplyKen Sedgwick

Deputy Director-GeneralBusiness and Corporate

Partnership DNRM & DEWSBrenda Parker

Chief Finance OfficerFiona Trenear

General ManagerWater Planning and Regulation

Bob Reilly

General ManagerWater Supply Policy

and EconomicsAnita Sweet

General ManagerRegulation, Governance

and EngagementKathie Standen

General ManagerConsumer and Pricing

Phil Richardson

General ManagerEnergy Industry Policy

Gayle Leaver

Executive DirectorHuman Resources

and CommunicationsCelia Venables

Chief CounselIn-House Legal

and Executive Director, Business Planning and AchievementSinead McCarthy


Executive Management TeamThe Executive Management Team (EMT) functions as the department’s board of management—overseeing the present and future work requirements of the department, and providing policy and strategic direction.

The EMT also functions as the department’s Strategic Finance Committee, supported by an operational level Finance Committee.

The EMT meets weekly. It takes a collaborative management approach to address the challenges facing the department, and works together to ensure optimal outcomes in line with the department’s strategic priorities. The collective responsibility of EMT is to ensure integration and collaboration on strategic issues across the department, and prioritisation of resources and capabilities to facilitate outcomes and delivery of key priorities.

The EMT’s role includes developing and leading the organisation’s culture of integrity, including a focus on customers and service delivery. This includes the support, promotion and monitoring of the department’s integrity framework to minimise the opportunity for misconduct and enhance the department’s ethical standing and public confidence in how services are delivered.

As at 30 June 2015, the EMT membership comprised:

• Dan Hunt, Director-General

• Ken Sedgwick, Deputy Director-General, Water Supply

• Karen Masnata, Deputy Director-General, Energy

• Brenda Parker, Deputy Director-General, Business and Corporate Partnership.

During 2014–15, Benn Barr relieved as Deputy Director-General, Energy, from 20 October 2014 to 30 June 2015.

Dan Hunt, Director-General

In September 2013, Dan Hunt was appointed as Director-General of the Department of Energy and Water Supply.

As Director-General, Dan was responsible for ensuring the department met its accountability obligations and achieves its strategic objectives to deliver government priorities.

Since October 2006, Dan served in a number of Director-General roles, including Director-General of the Department of Natural Resources and Mines; Associate Director-General, Mines and Energy, in the Department of Employment, Economic Development and Innovation; and Director-General of the Department of Mines and Energy.

As Director-General of Energy and Water Supply, Dan continued a long-term involvement with the energy sector in a broad range of energy policy reforms and led the development of long-term strategies across both the energy and water sectors.

Other achievements during his 38-year career with the public service include the corporatisation of ports and rail infrastructure, the development of commercial contracts with Queensland Rail, the strategic policy coordination of national transport reform, streamlining and transforming the mining exploration and development approvals processes, and working with industry and landholders on the development of the liquefied natural gas/coal seam gas industry.

Karen Masnata, Deputy Director-General, Energy

Karen Masnata commenced as Deputy Director-General, Energy, in June 2012.

Karen is responsible for the Energy division within the department, which is focused on the delivery of a cost-effective, safe, secure and reliable energy supply.

Karen provides direction and leadership to deliver innovative policy, planning and regulatory solutions, and is responsible for implementing the government’s significant energy-related election commitments in partnership with stakeholders.

Prior to this role, Karen held economic advisory roles with PricewaterhouseCoopers and Deloitte, and senior financial advisory roles with Queensland Treasury and the Queensland Treasury Corporation.


Karen has qualifications from the Australian Institute of Company Directors (Order of Merit), the Securities Institute of Australia (Corporate Finance), the University of Technology Sydney (College of Law) and the Queensland University of Technology (Bachelor of Laws).

Ken Sedgwick, Deputy Director-General, Water Supply

In 2012, Ken Sedgwick commenced as Deputy Director-General, Water Supply.

Ken is responsible for leading and implementing water policy, reform and regulation to ensure that the water supplied to Queensland communities is safe, reliable and delivered cost-effectively.

Prior to this role, Ken was Acting Deputy Under-Treasurer in Queensland Treasury and Trade, where he also worked in a variety of senior roles, including leading Treasury’s involvement in the many structural changes that occurred within the Queensland water industry.

Prior to his Treasury career, Ken worked in the former Department of Primary Industries in Brisbane and Townsville.

Brenda Parker, Deputy Director-General, Business and Corporate Partnership

Brenda is responsible for the efficient and effective delivery of strategic corporate services and business support programs in human resources, finance and performance management. She also leads the delivery of several other corporate functions including legal, facilities management and web and creative services for multiple agencies under a corporate partnership model.

Prior to this current role, Brenda led the Corporate Services Renewal Taskforce at the Public Service Commission, which was responsible for identifying and implementing recommendations to improve the manner in which corporate services are delivered across all government agencies.

Brenda has held several positions in the public sector over the last 20 years, including key leadership roles in the provision of corporate services.

Brenda has a number of qualifications and accreditations in human resources, workplace health and safety, rehabilitation and risk management, and is a graduate of the Australian Institute of Company Directors.

Benn Barr, Acting Deputy Director-General, Energy

Benn was responsible for leading and managing the roles and responsibilities of the Energy division, which includes the delivery of a cost-effective, safe, secure and reliable energy supply.

Benn was also responsible for implementation of the government’s renewable energy commitments.

Benn’s substantive role is General Manager, Energy Pricing, Consumer and Retail.

Benn has over 20 years public policy experience in Queensland and Australian governments, and graduated from James Cook University with a Bachelor of Economics.

EMT committeesIn accordance with the department’s corporate governance framework, the EMT is supported by committees that perform specific tasks or assignments.

During 2015, the department’s governance framework was amended to ensure the prioritisation of resources and efforts to facilitate the outcomes envisaged by our blueprint. This included the restructuring (and establishment) of the subcommittees that support EMT.

High Performance Framework Steering Committee

Role

The committee’s role is to oversee the development and implementation of the High Performance Framework.

Responsibilities

This committee is responsible for implementing a number of foundation projects, which will facilitate and embed high performance in the department. These projects focus on:

• leadership

• skills and capabilities

• learning and development

• reward and recognition

• individual performance

• business planning and performance.

Meetings

During 2014–15, the committee met approximately eight times. Since the formalisation of the committee under the department’s governance framework, it has been meeting on a monthly basis.


Customer Engagement Committee

Role

The Customer Engagement Committee (which incorporates the Online Committee) is a consultative committee responsible for identifying customer and business needs in the design and delivery of information via online tools.

Responsibilities

The committee is responsible for identifying and considering:

• purpose and intent of information placed on the department’s website

• role of social media within the department’s online communication strategy

• likely future web communication needs of business units and divisions

• customer groups or intended audience

• types of information and consistent principles that should apply to information released online

• appropriate user interface to generate understanding by customers

• aspects of design that meet these requirements.

Meetings

During 2014–15, the Customer Engagement Committee met at least monthly. Since work has commenced to redesign the department’s website, Online Committee meetings are occurring at least weekly.

Data and Analytics Consultative Committee

Role

The role of the committee is to provide an advisory and consultative platform for enhancing existing analytics capabilities and promoting more effective use of data and analytics within the department.

Responsibilities

The committee’s main responsibilities are to:

• advise EMT on strategic decisions regarding analytics, including capability development, resource procurement and financial expenditure

• plan business application of data and analytics through developing implementation plans and identifying resource requirements

• review and monitor the progress of data and analytics project deliverables

• create cross-divisional dialogue and ideas-sharing, and capture the innovative ideas of staff and partners

• identify opportunities to share data and analytics with customers and partners.

Meetings

Formed in June 2015, the committee has met twice and currently meets on a monthly basis.

DEWS Innovation and Science Committee

Role

The committee has the role of promoting and fostering a research, development and innovation focus in DEWS.

Responsibilities

The committee’s main responsibilities are to:

• establish links with research and development organisations, scientific facilities and universities so that staff are informed on upcoming research and development projects and new technologies

• assess (in consultation with relevant stakeholders) how upcoming new technologies or business processes might shape the future development of the department’s policies, regulatory practices and service delivery

• engage with universities and other academic institutions to help the department develop policy and strategy

• support opportunities for industry problem-solving through industry expert panels and other opportunities to pair industry stakeholders with appropriate faculties, scientific think tanks, and research and development organisations

• create an internal framework and structure that allows new business process ideas and methods (stemming from new technologies and research and development) to be implemented within the department

• provide advice to EMT on any grants or funding processes that support the work programs of the department and/or its partners.

Meetings

The committee was formed in mid 2015 under the department’s revised governance framework. The committee currently meets on a monthly basis.


ICT Investment and Strategy Committee

Role

The committee’s role is to:

• ensure the agency’s information and communications technology (ICT) investment and assets are aligned with agency business priorities and plans, and support whole-of-government ICT directions

• provide whole-of-agency leadership, strategic direction and oversight in planning and delivering the portfolio of ICT-related initiatives in the agency

• provide assurance to the Director-General that information management and ICT in the agency are being appropriately governed to ensure return on investment through effective delivery of approved initiatives that meet government priorities.

Responsibilities

The committee has established reporting requirements to ensure that it receives information relevant to its role. The committee:

• reviews and monitors the agency’s investments in information management systems and technologies to ensure they are managed through appropriate governance processes, and deliver stated outcomes and benefits

• monitors the health of ICT assets to address areas of risk

• authorises and directs the development of strategic and operational plans for ICT-enabled business

• prioritises the agency’s investments in information management systems and technologies consistent with the agency’s strategic direction, the ICT Partnership Board, and government priorities

• scrutinises the delivery of approved and funded project and program allocations, and approves the reallocation of unused funds

• escalates significant risks to the ICT Partnership Board and/or the Director-General

• monitors information management and ICT service provider arrangements under the Business and Corporate Partnership, including performance

• develops the agency’s information management capability.

Meetings

During 2014–15, the committee met approximately every two months.

Other committees

Agency Consultative Committee

The committee is co-chaired by the Executive Director of Human Resources and Communications (Business and Corporate Partnership) and an employee representative from the unions. It includes management representatives from across the department.

Together Queensland, the Industrial Union of Employees and Professional Australia were represented by union delegates who are employees of the department. Officials from both unions attend in an ex-officio capacity.

The role of the committee is to provide a forum to discuss a broad range of employee issues and provide an avenue for consultation between the department and unions. This includes ensuring the department implements and complies with all relevant arrangements under the Industrial Relations Act 1999, the Public Service Act 2008 and the State government departments certified agreement 2009.

The committee met regularly and was the primary forum for consultation on the department’s current and emerging industrial issues, workforce strategy and organisational change issues.

Staff Culture and Strategy Reference Committee

The Staff Culture and Strategy Reference Committee, known as DEWSLink, is the body responsible for providing feedback from staff to management on the programs and initiatives developed to align the department’s culture with its blueprint.

Role

The role of DEWSLink is to:

• act as a conduit between staff and management at all levels (up to EMT)

• proactively seek ideas from staff on ways to enhance the department’s culture

• act as a sounding board and champion staff initiatives for implementation

• provide information and get feedback from staff on workplace change initiatives

• initiate ideas to help move towards the department’s preferred organisational culture.

Meetings

DEWSLink meets fortnightly.


Business and Corporate Partnership Board The Business and Corporate Partnership Board is comprised of the Directors-General of the six agencies within the partnership—DEWS; the Department of Natural Resources and Mines (DNRM); the Department of Tourism, Major Events, Small Business and the Commonwealth Games; the Department of Agriculture and Fisheries (DAF); the Department of Environment and Heritage Protection (EHP); and the Department of National Parks, Sport and Racing.

The partnership operates through three corporate hubs embedded in DAF, DNRM and EHP. Each hub delivers a set of core services (to the host and one adjunct agency) and a selection of cooperative services (to either five or six partnering agencies). The head of corporate for each Business and Corporate Partnership hub is also represented on the board.

The board is collectively responsible for the long-term performance, business success and timely delivery of departmental key priorities within the Business and Corporate Partnership. Its role is to provide leadership and set the strategic direction of the partnership to enable it to meet its goals and objectives.

The partnership provides direct corporate services to support partnering agencies to deliver government priorities. Under this model, the focus is on ensuring economies of scale, service integration, consistent service delivery, scalability, flexibility and responsiveness.

Government bodiesA schedule of energy and water supply government bodies, including their reporting arrangements, is included in Appendix 2.

Public Sector Ethics Act 1994The department considers the conduct and performance of employees central to achieving its deliverables and objectives. In 2014–15, comprehensive online training continued, with specific education on the code of conduct and the ethics principles of the Public Sector Ethics Act 1994 for inductees. Specific training was also delivered to managers and supervisors surrounding implementation of the sector-wide Capability and Performance Excellence framework, providing mechanisms that support early intervention and local resolution of unsatisfactory conduct and performance.

The code of conduct remained accessible on the department’s intranet, supported by policies and resources aligned to the code that formed the basis for human resource management and decision-making. Ensuring accountability and transparency through clear roles and responsibilities was further incorporated throughout the department’s strategic plan and blueprint, with a particular focus on the department’s performance through its governance, people and service delivery. This was further addressed through performance and development discussions and plans.

Further guidance on the code of conduct and everyday conduct matters was provided by the department’s human resource practitioners and representatives.


Governance: Risk management and accountability

Risk managementEffective risk management helps the department make informed decisions, meet our compliance obligations and ensure the safety and wellbeing of our people and the community. DEWS is committed to risk management as a cornerstone of its overarching governance framework. The risk-management policy and procedure (which aligns with standard AS/NZS ISO 31000:2009: risk management—principles and guidelines and Queensland Treasury’s A guide to risk management: July 2011) outlines the principles and responsibilities for risk management across the department.

During 2014–15, the department further refined its approach to identification, analysis and remediation of risk. The DEWS risk management policy and procedure was reviewed and confirmed to be fit for purpose. The department developed a refreshed strategic risk register and established a process by which these risks are regularly examined and updated by the respective risk owners and EMT. The department also reviews and monitors its operational risks (including financial, compliance and work health and safety).

External scrutinyQueensland Government agencies can be reviewed or audited by a number of different authorities and bodies, including the Queensland Audit Office, Parliamentary committees, the Crime and Corruption Commission, the Queensland Ombudsman, the Information Commissioner Queensland and the Office of the State Coroner.

Queensland Audit Office

The Queensland Audit Office (QAO) continues to add value to the public sector through reporting to Parliament on a range of matters identified through four avenues:

1. areas of emphasis audits

2. financial audits

3. compliance audits

4. performance audits.

During 2014–15, the QAO performed two audits on the department:

1. The QAO report to Parliament, Results of audit: internal control systems 2013–14—report 1: 2014–15, addressed overall financial controls with specific area of emphasis on risk management and financial delegations. The review identified a number of recommendations to improve risk management in the department. Since this report was tabled in Parliament on 11 July 2014, the department has taken a number of actions to address the recommendations, including

− reviewing and confirming the DEWS risk management framework to be fit for purpose

− refreshing our strategic risk register and continuing to improve departmental processes to identify, analyse, treat, monitor and report strategic and operational risks

− developing a risk appetite statement that provides guidance on the department’s overall willingness to expose itself to risk in order to achieve its objectives and the level of risk the department is willing to accept or tolerate.


2. The QAO report to Parliament, Monitoring and reporting performance—report 18: 2013–14, was tabled in Parliament on 26 June 2014. This report examined how departments measure, monitor and publicly report on non-financial performance. The QAO assessed the performance information in the DEWS service delivery statements from the 2013–14 State Budget papers. DEWS assessed the recommendations made by QAO for all departments and, during 2014–15, the department commenced work to improve the performance information in the DEWS 2015–16 service delivery statements. The department is progressing a program of work toward implementing the QAO recommendations to include measures that show the efficiency and effectiveness of the department’s Energy and Water Supply service areas.

Parliamentary committees

In 2014–15, the former State Development, Infrastructure and Industry Committee examined the following legislation from DEWS:

• Electricity Competition and Protection Legislation Amendment Bill 2014 (report no. 47)

• National Energy Retail Law (Queensland) Bill 2014 (report no. 48)

• Water Legislation (Miscellaneous Provisions) Amendment Bill 2014 (report no. 49).

The committee examined the policies each Bill sought to give effect to, the Bill’s lawfulness and the application of fundamental legislative principles.

Audit and Risk CommitteeThe Audit and Risk Committee was established in accordance with the Financial and Performance Management Standard 2009 (s. 35). The committee met five times in the period 1 July 2014 to 30 June 2015. The committee observed the terms of its charter, having due regard to the Audit committee guidelines: improving accountability and performance—June 2012 issued by Queensland Treasury.

The committee is directly responsible to the Director-General and in discharging its responsibilities the committee has the authority to:

• conduct or authorise investigations into matters within its scope of responsibility

• access information, records and personnel of DEWS for such purpose

• request the attendance of any employee, including executive staff, at committee meetings

• conduct meetings with DEWS internal and external auditors as necessary

• seek advice from external parties as necessary.

The committee acts as a forum for dialogue between the Director-General, senior management, the Queensland Government Internal Audit Service and the QAO.

The functions and role of the committee does not diminish the statutory and regulatory duties and responsibilities of the Director-General, nor do they detract from management’s responsibilities in relation to corporate governance, internal control, fraud prevention and risk management.

The committee provided governance oversight and advice to the Director-General in relation to all aspects of its charter responsibilities. Key achievements, and enablers to this, were the review and revision of the committee charter and, in turn, review and revision of the committee composition to achieve optimum balance in effectiveness and efficiency.

The committee comprises the following membership (see Table 1).

Table 1: Membership of the Audit and Risk Committee

Name Role

Peter Dowling Independent external member (chair)

Patrice Sherrie Independent external member

Ken Sedgwick Deputy Director-General, Water Supply (member)

Karen Masnata* Deputy Director-General, Energy (member)

* Permanent proxy—Benn Barr, General Manager, Consumer and Pricing


Committee members were provided with recommendations arising from QAO reports to Parliament that relate to the department. During 2014–15, seven recommendations were actioned and closed, and one recommendation remained open as at 30 June 2014.

The committee’s two external members received total remuneration of $10 200 for their role on the committee during 2014–15.

Internal auditThe formation of the Queensland Government Internal Audit Service (QGIAS) was approved on 12 June 2012. QGIAS is a business unit within EHP and provides internal audit services to four other Queensland Government agencies as part of a co-sourced corporate services arrangement.

The role, operating environment and operating parameters of QGIAS are established in the 2014 and 2015 internal audit charters that have due regard to professional standards and the Audit committee guidelines: improving accountability and performance—June 2012 issued by Queensland Treasury.

Purpose

QGIAS provides independent assurance and advice to the Director-General, senior management and the Audit and Risk Committee. QGIAS enhances the DEWS corporate governance environment through an objective, systematic approach to evaluating the effectiveness and efficiency of corporate governance processes, internal controls, risk assessment and management practices. This is in keeping with the roles and responsibilities detailed in the Financial Accountability Act 2009.

QGIAS reports to the Audit and Risk Committee at scheduled meetings four times per year.

The QGIAS function is independent of management and external auditors.

QGIAS activities also include:

• financial, compliance and operational reviews

• information system and data integrity reviews

• special review assignments as requested by management.

In 2014–15, QGIAS:

• discharged the responsibilities established in the 2014 and 2015 internal audit charters by executing the internal audit program of work prepared as a result of risk assessments, materiality and contractual and statutory obligations

• provided reports on results of internal audits and assurance reviews undertaken to the Audit and Risk Committee and Director-General

• monitored and reported on status of implementation of internal and external audit recommendations to the Audit and Risk Committee—management is responsible for implementation of audit recommendations

• liaised with QAO to ensure there was no duplication of audit effort


• supported management by providing advice on corporate governance and related issues, including fraud and corruption prevention programs and risk management

• allocated internal audit resources to those areas considered to present the greatest risk and where the work of internal audit can be valuable in providing positive assurance or identifying opportunities for positive change

• reviewed the departmental annual financial statements and Chief Finance Officer assurance statements prior to them being presented to the Audit and Risk Committee.

QGIAS major achievements included the following:

• completed the following reviews under the DEWS strategic internal audit plan: January 2014 to June 2015

− energy sector queries and complaints management

− contract management

− controls supporting purchases and payables

− IT general controls

• commenced the following reviews under the DEWS strategic internal audit plan: January 2014 to June 2015

− performance management

• developed the DEWS 2015/2016 strategic internal audit plan, which was approved by the Director-General on 2 June 2015 after endorsement from the DEWS EMT and Audit and Risk Committee

• continued a knowledge and information-sharing forum across customer agencies.

These activities are undertaken having regard to the International standards for the professional practice of internal auditing and the Queensland Treasury’s Audit committee guidelines: improving accountability and performance—June 2012.

QGIAS staff are members of professional bodies, including the Institute of Internal Auditors, CPA Australia and the Information Systems Audit and Control Association. The department continues to support the ongoing professional development of internal audit employees.

In those areas of the department that were subject to internal audit in terms of the program of work, as approved by the Director-General, QGIAS considers there are adequate controls in place to minimise the opportunity of fraud or mismanagement.

Information systems and recordkeeping

Information systems

DEWS continue to operate, maintain, develop and decommission a range of information systems to support services, initiatives and corporate operations. Highlights include the following:

• The Water Industry Compliance Database replacement project is in second stage procurement. The tender process is underway and is due for completion by September 2015. The go-live target is March 2016.

• The system to track the Gas and Electricity Rebate Scheme was decommissioned. To avoid duplication and cut red tape for businesses, the Queensland Gas Scheme was formally closed 1 July 2014. The department developed a reporting database to help with queries on the scheme in future years. The decommissioning saved DEWS around $200 000 per year in hosting costs.

Recordkeeping

DEWS is operating a recordkeeping strategy to ensure that the department is compliant with the Public Records Act 2002, Public Service Act 1996 and Information Standard 40—Recordkeeping. Policies are in place for recordkeeping, email management, retention and disposal of records, managing information on shared network drives and information security.

Records Management Services has responsibility for providing a compliant recordkeeping framework for the department. The Electronic Document and Records Management System (eDRMS) platform has been upgraded to ensure continuing technical currency supporting corporate recordkeeping. Increasing numbers of records are being received, captured and managed electronically. Recordkeeping considerations are being formally addressed in both the development and decommissioning of business systems.

A comprehensive retention and disposal schedule for water records has been developed and is being reviewed prior to submission to Queensland State Archives for approval. Time-expired records have been identified for disposal and 521 boxes of hardcopy files have been disposed of securely. Permanent records have been identified and are being prepared for transfer to Queensland State Archives.


Governance: Human resources

Workforce planning and performance

Workforce profile

As at 30 June 2015, DEWS employed 202.1 full-time equivalent staff.

Permanent separation rate

The implementation of the whole-of-government business renewal initiative, the ending of temporary contracts, resignations and retirements led to a 12.63 per cent permanent separation rate for DEWS in 2014–15.

Workforce planning, attraction, retention and performance

During 2014–15, Human Resources partnered with management and staff to develop a framework that embeds high performance throughout the organisation. The need for this was guided by feedback from staff, particularly through staff representative committees and our Working for Queensland Employee Opinion Survey results, and was developed based on extensive research in building high-performing organisations in Australia.

Throughout 2014–15, this framework was workshopped with management and staff to identify and define six key foundation projects that would drive and embed high performance across our workplaces.

These foundation projects are at the core of Human Resources strategies relating to the effectiveness of the agency in planning, developing and retaining a high-performing workforce to achieve the department’s strategic objectives. Executive champions for each project and staff representative committees enable the ongoing effectiveness and resolution of strategic issues for these projects.

Project 1: Business planning

The department has implemented a regular and systemic business planning process that clearly defines the strategies to deliver outcomes, with meaningful performance measures in place to link the outputs of business units and individuals to our blueprint objectives.

Project 2: Performance measures and data

The identification of good performance will help us prioritise our core business and guide us to achieve better outcomes for our customers. The performance measures align to the service delivery statements, the strategic plan, business plans and staff performance and development plans.

Project 3: Capability framework and skills assessment

The department has designed an agency-specific capability framework and self-assessment tool. This provides employees and management with a common framework that clearly defines the behavioural expectation of employees at each level to be successful in their roles. The implementation of this framework will enhance the department’s recruitment, professional development, performance management and recognition culture.


Project 4: Leadership and management development

Committed to delivering an effective capability development program, the department has adopted a 70:20:10 learning model. The framework educates employees on the various approaches to learning, and also to emphasise the importance of practical application in achieving meaningful outcomes. Resources focused on providing experiential, collaborative and formal learning opportunities will support the model. Examples include access to mentoring and interchange programs, along with resources to aid succession planning as required.

The department is currently developing a leadership and management strategy to support current and future leaders to deliver better outcomes for our customers. Throughout 2014–15, the leaders of the department participated in a 360-degree executive feedback program, leadership workshops and executive coaching. The outcomes of these activities have been essential to inform the development of the department’s leadership and management strategy.

Project 5: Performance and development refresh

The department has reviewed and further developed performance and development support tools for staff and management in line with our new capability framework. This has ensured employees have a clear understanding of their individual deliverables and commitments, as well as the desired behaviours to be demonstrated to support of the strategic objectives. Further, the tools are an important resource to support managers in the effective performance management of their staff. Human Resources refreshed the performance and development resources and tools, and facilitated sessions to communicate to staff the intent and importance of the performance and development process and to highlight the significance of these performance conversations between staff and their supervisors.

Project 6: Reward and recognition

The department is currently scoping the development of a formal reward and recognition program. This will be a key driver in achieving a high-performing culture, where employees are valued and acknowledged for their contributions to the organisation. The system aims to provide our people with a tool that has the ability to recognise the accomplishments and performance of their colleagues in line with public sector values and our blueprint. It will also easily reward these performances with a range of products for an individual or team, such as charity organisation donations.

Working for Queensland Employee Opinion Survey

To further drive high performance and recognition across our workforce, the department undertook a significant engagement and communication campaign in order to achieve a positive increase in employee participation and, more importantly, a positive shift in results for the sector-wide annual Working for Queensland Employee Opinion Survey. The department established staff representative teams within each division to workshop the survey results, identify critical on-the-ground issues in their workplace and empowered staff to develop localised action plans to address some of these issues. The intent of this approach was based on engaging our staff and driving positive change in the workplace.

Industrial relations and a safe and healthy workforce

The department has a contemporary human resource management framework that includes a comprehensive suite of resources and guidance on employee entitlements and resolving issues that may arise in the workplace. Information is proactively distributed and assistance is provided to managers and employees to ensure employees are receiving their correct entitlements. Of note is the implementation of the recent amendments to the Industrial Relations Act 1999 and the new Queensland Government commitment to union encouragement policy.

In 2014–15, the department was represented at Queensland Industrial Relations Commission conferences dealing with the award modernisation process, ensuring that department-specific provisions in awards were maintained.

A number of departmental employees were engaged as COMCAR drivers for the G20 Leaders Summit. These employees received special salaries and allowances under the specific provisions of the Commission Chief Executive directive: G20 Leaders’ Summit employment conditions. Department employees assisting with natural disasters also received special payments under the provisions of the Minister Assisting the Premier directive: critical incident entitlements and conditions.


Ongoing consultative discussions are held with Together Queensland, the Industrial Union of Employees and Professionals Australia through regular formalised meetings of the Agency Consultative Committee. Essentially, the role of the committee is to ensure that the department implements and complies with all relevant arrangements under the Industrial Relations Act 1999, the Public Service Act 2008 and the State Government departments certified agreement 2009, with particular focus placed on current and emerging industrial issues, workforce strategy and organisational change issues.

The department maintains a commitment to developing a safe, happy and healthy workforce through its Workplace Health and Safety Strategy and health and wellbeing program. The department’s health and wellbeing program has contributed to improving the health and wellbeing of employees. Each pillar of the program provides a foundation for the development of activities, programs and initiatives to support the department’s approach to promote a positive, safe and health workforce:

• active lifestyles—10 000 steps challenge, participation in the Queensland corporate games

• healthy choices—flu vaccination program

• building resilience—domestic and family violence awareness program.

Further, the department recognises the importance of flexible work arrangements and adopts a ‘family-friendly’ work practice approach, attributing to the maintenance of a diverse, adaptive and high-performing workforce. Under existing policy, employees have the ability to utilise accrued leave time, job sharing, part-time employment, phased retirement and telecommuting arrangements. The department has developed a toolkit to help managers and employees understand and implement available flexible working options, while continuing to deliver quality products and services to ensure business productivity is maintained, and to support employees in balancing their work and personal life commitments.

Though the department does not report on these arrangements, the newly adopted Aurion system has the functionality to do so (for some). Therefore, in 2015–16, the department will have a more accurate reflection of the number of staff who undertake a job-sharing arrangement—this will allow more visibility and information about how our flexible working arrangements are being implemented and the effectiveness of the arrangements.

Public sector values

During 2014, DEWS developed its Blueprint for better outcomes: putting water and energy customers first. Developed by staff for staff, the blueprint reorientates the department towards the customer through a program of cultural and capability transformation. The closely aligned High Performance Framework creates a platform for unleashing potential and developing our workforce to meet the needs of customers, now and into the future.

Under the direction of the blueprint and the High Performance Framework, the Queensland public service values have become an integral part of the DEWS organisational culture and our desired ways of working. Practical examples of how these values are changing the way the department operates include:

• customers first—the formation of a committee to redesign and develop the DEWS website to enable new and improved ways of talking to and serving customers online

• ideas into action—the formation of the DEWS Innovation and Science Committee will ensure that advances in new technology, science and research drive relevant changes to our policies and programs

• unleash potential—our High Performance Framework has seen the development of a departmental capability framework and a learning and development framework that support our people now and builds the workforce of the future

• be courageous—the formation of a Staff Culture and Strategy Reference Committee, known as DEWSLink, is the first of its kind in the Queensland public service (DEWSLink acts as a staff sounding board to champion staff ideas and provide a direct line of communication between staff and EMT)

• empower people—the creation of a DEWS capability framework and self-assessment tool provides staff with a better understanding of what is expected to be successful in their roles.

Early retirement, redundancy and retrenchmentDuring 2014–15, 12 employees received redundancy packages at a cost of $645 279. Employees who did not accept an offer of a redundancy were offered case management for a set period of time, during which reasonable attempts were made to find alternative employment placements.


Open data

The open data initiative is about making Queensland Government data and information more open, transparent and accessible. This approach encourages the private sector to develop new services and solutions that support the knowledge economy by stimulating innovation, research and improvement in the delivery of energy and water supply services to Queenslanders.

The department is committed to:

• releasing as much data as possible in an easy-to-find and accessible manner

• ensuring data is made available under the least restrictive licence, allowing for its use and re-use

• publishing data in machine-readable formats that can be downloaded, indexed and searched by commonly used web applications.

During 2014–15, the DEWS Open Data Strategy was reviewed for the period 2014–18 and released through the Queensland Government’s Open Data Portal.

In September 2014, the Office of the Information Commissioner Queensland tabled report no. 1 to the Queensland Legislative Assembly for 2014–15—Results of desktop audits 2013–14—on their review of publication schemes, disclosure logs and information privacy awareness in departments (and hospital and health services). In this report, DEWS was highlighted as an example of an agency with a well-managed approach to the open data strategy and publication of datasets.

There are currently 56 sets of our data resources available to the public and we will continue to develop, implement and maintain effective processes to ensure our data is available and free to anyone who wishes to use it.

The following DEWS datasets for annual reporting purposes are available on the Open Data Portal at www.data.qld.gov.au:

• consultancies

• overseas travel

• Queensland Government language services policy

• government bodies.


Financial statements as at 30 June 2015

Department of Energy and Water SupplyFinancial statements for the year ended 30 June 2015

Foreword and general information

The Department of Energy and Water Supply (DEWS) is a Queensland Government department established under the Public Service Act 2008. DEWS is controlled by the State of Queensland which is the ultimate parent.

The head office and principal place of business of the department is:

Level 13 41 George Street Brisbane Qld 4000

A description of the nature of the operations and principal activities of the department is included in the notes to these financial statements. For information in relation to these financial statements please call (07) 3166 0102, or visit the website at www.dews.qld.gov.au.


Department of Energy and Water Supply Statement of Comprehensive Income – Controlled for the year ended 30 June 2015

Page 2

The accompanying notes form part of these statements.

0 Sum of Total as at 30 June (prior year) Notes 2015 2014

$'000 $'000 Income from Continuing Operations Appropriation revenue 2 40,521 59,887 Grants and other contributions 3 4,183 59 Other revenue 4 551 2,821

Total Income from Continuing Operations 45,255 62,767

Expenses from Continuing Operations Employee expenses 5 24,726 27,237 Supplies and services 7 9,349 11,207 Grants and subsidies 8 6,398 22,506 Other expenses 9 4,590 2,196 Depreciation and amortisation 192 213

Total Expenses from Continuing Operations 45,255 63,359

Operating Result for the Year - (592)

Other Comprehensive Income

Items that will not be reclassified subsequently to operating result:

Increase (decrease) in asset revaluation surplus 15 68 -

Total Other Comprehensive Income 68 -

Total Comprehensive Income 68 (592)


Department of Energy and Water Supply Statement of Comprehensive Income – Administered on a whole-of-Government basis for the year ended 30 June 2015

Page 3

Notes 2015 2014 $'000 $'000

Income from Continuing OperationsAppropriation revenue 2 653,637 584,883 User charges and fees x 760 1,081 Grants and other contributions xx - 413 Other revenue xxx 471 633

Total Income from Continuing Operations 654,868 587,010

Expenses from Continuing OperationsSupplies and services 7 1,116 714 Grants and subsidies 8 632,144 537,830 Depreciation and amortisation 11 8,712 6,814

Total Expenses from Continuing Operations 641,972 545,358

Net operating Result before transfers to government 12,896 41,652

. Transfers of administered appropriation to government 582104 11,664 41,065

. Transfers of administered revenue to government 582101 1,232 1,588

Operating Result for the Year - (1,001)

Other Comprehensive Income

Items that will not be reclassified subsequently to operating result:

Increase (decrease) in asset revaluation surplus - 74,984

Total Other Comprehensive Income - 74,984

Total Comprehensive Income - 73,983



Department of Energy and Water Supply Statement of Financial Position – Controlled as at 30 June 2015

Page 4


Notes 2015 2014 $'000 $'000

Current Assets Cash and cash equivalents 18,306 22,876 Receivables 10 1,226 2,303 Prepayments 120 50

Total Current Assets 19,652 25,229

Non-Current Assets Receivables - 500 Property plant and equipment 11 789 902 Intangible assets - 156

Total Non-Current Assets 789 1,558

Total Assets 20,441 26,787

Current Liabilities Payables 12 736 7,425 Accrued employee benefits 13 924 1,023 Other 14 4,435 2,038

Total Current Liabilities 6,094 10,487

Total Liabilities 6,094 10,487

Net Assets 14,346 16,301

Equity Contributed equity 12,215 14,237 Asset revaluation surplus 15 68 - Accumulated surplus 2,064 2,064

Total Equity 14,346 16,301


Department of Energy and Water Supply Statement of Financial Position – Administered on a whole-of-Government basis as at 30 June 2015

Page 5


Notes 2015 2014 $'000 $'000

Current Assets Cash and cash equivalents c 75,803 62,854 Receivables 10 36,687 38,981 Prepayments x 102 -

Total Current Assets 112,593 101,835

Non-Current Assets Property, plant and equipment 11 228,456 237,180

Total Non-Current Assets 228,456 237,180

Total Assets 341,049 339,015

Current Liabilities Payables 12 114,283 102,805

Total Current Liabilities 114,283 102,805

Total Liabilities 114,283 102,805

Net Assets 226,766 236,210

Equity Contributed equity 23 (1,310) 8,134 Asset revaluation surplus 15 237,081 237,081 Accumulated surplus 25 (9,005) (9,005)

Total Equity 226,766 236,210


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Department of Energy and Water Supply Statement of Cash Flows – Controlled for the year ended 30 June 2015

Page 8


Notes 2015 2014 $'000 $'000

Cash flows from operating activities Inflows: Service appropriation receipts 2 39,529 47,648 GST input tax credits received from Australian Taxation Office 1,865 2,652 GST collected from customers 37 323 Other inflows 4,877 2,787

Outflows: Employee expenses (24,770) (27,602) Supplies and services (10,434) (12,316) Grants and subsidies (11,872) (26,775) GST paid to suppliers (1,801) (2,569) GST remitted to Australian Taxation Office (87) (424) Other outflows (873) (8,303) Net cash provided by (used in) operating activities 16 (3,529) (24,577)

Cash flows from investing activities Inflows: Loans and advances redeemed 1,000 1,000 Outflows: Payments for property, plant and equipment (19) (26) Payments for intangibles - (117) Net cash provided by (used in) investing activities 981 856

Cash flows from financing activities Outflows: Equity withdrawals (2,022) - Net cash provided by (used in) financing activities (2,022) -

Net increase (decrease) in cash and cash equivalents (4,570) (23,721) Cash and cash equivalents at beginning of financial year 22,876 46,596

Cash and cash equivalents at end of financial year 18,306 22,876


Department of Energy and Water Supply Statement of Cash Flows – Administered on a whole-of-Government basis for the year ended 30 June 2015

Page 9

Notes 2015 2014

$'000 $'000

Cash flows from operating activities Inflows:Administered appropriation receipts 2 645,161 575,077 User charges and fees 760 1,081 Grants and other contributions - 413 GST input tax credits from Australian Taxation Office 59,983 51,361 GST collected from customers 45 411 Other inflows 811 4,864

Outflows:Administered appropriation receipts returned to Queensland Treasury and Trade (1,817) (77,065) Grants and subsidies (75) (966) Community service obligation payments (620,184) (559,439) Supplies and services (938) (5,831) GST paid to suppliers (61,353) (45,082) GST remitted to Australian Taxation Office (11) (411) Net cash provided by (used in) operating activities 16 22,381 (55,587)

Cash flows from investing activities

Outflows:Payments for property, plant and equipment (173) (240) Net cash provided by (used in) investing activities (173) (240)

Cash flows from financing activitiesInflows:Equity Injections 80 873

Outflows:Equity withdrawals (9,339) (5,400) Net cash provided by (used in) financing activities (9,259) (4,527)

Net increase (decrease) in cash and cash equivalents 12,949 (60,354) Cash and cash equivalents at beginning of financial year 62,854 123,208

Cash and cash equivalents at end of financial year 75,803 62,854



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Department of Energy and Water Supply Notes to and forming part of the Financial Statements 2014-15

Page 14

Objectives and Principal Activities of the Department

Note 1: Summary of Significant Accounting Policies

Note 2: Reconciliation of Payments from Consolidated Fund to Appropriation Revenue for Services

Note 3: Grants and Other Contributions

Note 4: Other Revenue

Note 5: Employee Expenses

Note 6: Key Management Personnel and Remuneration Expenses

Note 7: Supplies and Services

Note 8: Grants and Subsidies

Note 9: Other Expenses

Note 10: Receivables

Note 11: Property, Plant and Equipment

Note 12: Payables

Note 13: Accrued Employee Benefits

Note 14: Other Liabilities

Note 15: Asset Revaluation Surplus by Class

Note 16: Reconciliation of Operating Result from Continuing Operations to Net Cash

Note 17: Commitments for Expenditure

Note 18: Contingencies

Note 19: Budget vs Actual Comparison



Page 15

Objectives and Principal Activities of the Department

The Department of Energy and Water Supply (DEWS) is responsible for overseeing Queensland’s energy and water industries to ensure these services are provided to Queensland consumers in a safe, efficient and reliable way. The department is principally funded for the services it delivers by parliamentary appropriations. 1. Summary of Significant Accounting Policies The significant policies, which have been adopted in the preparation of these financial statements, are as follows: (a) Statement of Compliance The department has prepared these financial statements in compliance with section 42 of the Financial and Performance Management Standard 2009. These general purpose financial statements have been prepared on an accrual basis, in accordance with Australian Accounting Standards and Interpretations. In addition, these financial statements comply with the Queensland Treasury’s Minimum Reporting Requirements for the period ending 30 June 2015, and other authoritative pronouncements. To comply with the Australian Accounting Standards and interpretations, the department has applied those requirements applicable to not-for-profit entities, as the department is a not-for-profit government department. Except where stated, the historical cost convention is used. (b) The Reporting Entity The financial statements include the value of all revenues, expenses, assets, liabilities and equity of the department where these items are material. The department’s functions are delivered through two main service areas: ‘Energy’ and ‘Water Supply’: Energy The Energy service area objective is to develop policy, reform and regulate the Queensland energy sector to ensure cost-effective, secure and reliable energy supply. It is also responsible for delivering and implementing the Queensland government’s energy strategy, informed by the outcomes of the government’s review on electricity sector reform, to address cost-of-living pressures and sustainability of the sector. Water Supply The Water Supply service area objective is to ensure the delivery of safe, reliable and cost-effective water supplies and the safety of referable dams, and to plan for water supply security and flood mitigation. It is also responsible for delivering and implementing strategies for Queensland’s water sector and regulating water supply so that agriculture, mining, industry and regional and urban communities have access to a cost-effective, safe, secure and sustainable water supply. (c) Administered Transactions and Balances The department administers, but does not control, certain resources on behalf of the Government. In doing so, it has responsibility and is accountable for administering related transactions and items, but does not have the discretion to deploy the resources for the achievement of the department’s objectives. Major administered expenses include Community Service Obligation (CSO) payments made on behalf of Government to energy retailers Ergon, Origin and Energex and to water supply entities SunWater and SeqWater. The principal resource administered by the department is the state-owned and managed dams and weirs. The most significant CSO payment relates to the Uniform Tariff Policy supporting regional Queensland and can vary from year to year due to the changes in the inputs to the claim such as network costs and energy purchases. For further information in relation to CSO payments, refer to Budget Paper 2 Concessions Statement as published on www.budget.qld.gov.au. (d) Appropriation Revenue / Administered Revenue Appropriations provided under the Appropriation Act 2014 are recognised as revenue when realised. Approval has been obtained from Queensland Treasury to recognise accrual adjustments to departmental services revenue. Refer to note 2.



Page 16

(d) Appropriation Revenue / Administered Revenue (cont’d) Amounts appropriated to the department for transfer to other entities in accordance with legislative or other requirements are reported as ‘administered’ item appropriations with the related payments being recorded as administered expenses. (e) Grants, Contributions and Services Received Free of Charge or at Below Fair Value Grants, contributions, donations and gifts, non-reciprocal in nature, are recognised as revenue in the year in which the department obtains control over them. Where grants are received that are reciprocal in nature, revenue is recognised over the term of the funding arrangements. Contributions of services are recognised only if the services would have been purchased if they had not been donated and their fair value can be measured reliably. Where this is the case, an equal amount is recognised as revenue and an expense. In addition to the corporate services delivered from within the department, it also participates in a corporate partnership arrangement whereby certain agencies “host” a number of strategic and operational corporate services to DEWS as “recipient” department. The “host” agency of each corporate service function receives the appropriation of funds and reports full time equivalent positions in the respective agency. The model is multi-layered for different corporate services functions. That is, some functions are provided to two agencies, and some provided to six agencies with any combination in between. As a “recipient” agency, DEWS receives defined services from the following agencies: Department of Agriculture and Fisheries (Information Management, Telecommunications) Department of Natural Resources and Mines (Accommodation Services, Legal Services, Human Resources,

Corporate Communications, Privacy and Ethics, Financial Policy) Department of Environment and Heritage Protection (Strategic Procurement, Right to Information and

Internal Audit). (f) Special Payments Special payments include ex gratia expenditure and other expenditure that the department is not contractually or legally obligated to make to other parties. In compliance with the Financial and Performance Management Standard 2009, the department maintains a register setting out details of all special payments greater than $5,000. The total of all special payments (including those of $5,000 or less) is disclosed separately within Other Expenses (Note 9). However, descriptions of the nature of special payments are only provided for special payments greater than $5,000. (g) Cash and Cash Equivalents For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include all cash on hand, cash at bank and cash and cheques receipted but not banked at 30 June 2015. Departmental bank accounts grouped within the Whole-of-government set-off arrangement with the Queensland Treasury Corporation do not earn interest on surplus funds. (h) Receivables Trade debtors are recognised at the amounts due at the time of sale or service delivery, i.e. the agreed purchase/contract price. Settlement of these amounts is required within a trading term range of 14 days to 30 days from invoice date depending on the service provided. The collectability of receivables is assessed periodically with provision being made for impairment where applicable. Other debtors generally arise from transactions outside the usual operating activities of the department and are recognised at their assessed valued. (i) Acquisitions of Assets Actual cost is used for the initial recording of all non-current physical and intangible asset acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs


Department of Energy and Water Supply Statement of Changes in Equity – Administered on a whole-of-Government basis for the year ended 30 June 2015

Page 7

AccumulatedSurplus

Asset Revaluation

Surplus

ContributedEquity

Total

$'000 $'000 $'000 $'000

Balance as at 1 July 2014 (9,005) 237,081 8,134 236,210

Operating result from continuing operations - - - -

Transactions with Owners as Owners Equity withdrawal - - (9,339) (9,339) Equity injection - - 80 80 Net transfers out to other Queensland Government entities - - (185) (185)

Balance as at 30 June 2015 (9,005) 237,081 (1,310) 226,766

Balance as at 1 July 2013 (8,003) 162,097 12,929 167,023

Operating result from continuing operations (1,001) - - (1,001)

Other Comprehensive Income Increase in asset revaluation surplus - 74,984 - 74,984

Transactions with Owners as Owners Equity withdrawal - - (5,400) (5,400) Equity injection - - 873 873 Machinery of Government adjustment - - (269) (269)

Balance as at 30 June 2014 (9,005) 237,081 8,134 236,210




Page 18

(k) Revaluations of Non-Current Physical Assets (cont’d) The fair values reported by the department are based on appropriate valuation techniques that maximise the use of available and relevant observable inputs and minimise the use of unobservable inputs (refer to Note 1(l)). Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the appropriate class, except to the extent it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the balance, if any, in the revaluation surplus relating to that class. On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and any change in the estimate of remaining useful life. Separately identified components of assets are measured on the same basis as the assets to which they relate. The Department owns a number of non-commercial water infrastructure assets and have recognised these assets under Non-Current Asset Policy 1 (NCAP1). These assets are valued using the Depreciated Replacement Cost (DRC) method and apply the Modern Engineering Equivalent Replacement Asset (MEERA) approach i.e. where the replacement cost of an asset is assessed on the basis of design and construction using modern technology. (l) Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly derived from observable inputs or estimated using another valuation technique. Observable inputs are publicly available data that are relevant to the characteristics of the assets/liabilities being valued. Observable inputs used by the department include, but are not limited to, published sales data for land and general office buildings. Unobservable inputs are data, assumptions and judgements that are not available publicly, but are relevant to the characteristics of the assets/liabilities being valued. Significant unobservable inputs used by the department include, but are not limited to, subjective adjustments made to observable data to take account of the characteristics of the department assets/liabilities, internal records of recent construction costs (and/or estimates of such costs) for assets' characteristics/functionality, and assessments of physical condition and remaining useful life. Unobservable inputs are used to the extent that sufficient relevant and reliable observable inputs are not available for similar assets/liabilities. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use. All assets and liabilities of the department for which fair value is measured or disclosed in the financial statements are categorised within the following fair value hierarchy, based on the data and assumptions used in the most recent specific appraisals: • Level 1 - represents fair value measurements that reflect unadjusted quoted market prices in active markets for identical assets and liabilities; • Level 2 - represents fair value measurements that are substantially derived from inputs (other than quoted prices included within level 1) that are observable, either directly or indirectly; and • Level 3 - represents fair value measurements that are substantially derived from unobservable inputs. None of the department’s valuations of assets are eligible for categorisation into level 1 of the fair value hierarchy. There were no transfers of assets between fair value hierarchy levels during the period. (m) Depreciation of Property, Plant and Equipment Land and Heritage and Culture assets are not depreciated as they have an unlimited useful life. Property, plant and equipment is depreciated on a straight-line basis so as to allocate the net cost or re-valued amount of each asset, less its estimated residual value, progressively over its estimated useful life to the department. Assets under construction (work in progress) are not depreciated or amortised until they reach service delivery capacity. Service delivery capacity relates to when construction is complete and the asset is first put to use or is installed ready for use in accordance with its intended application. These assets are then reclassified to the relevant classes within property, plant and equipment.



Page 19

(m) Depreciation of Property, Plant and Equipment (cont’d) Any expenditure that increases the originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset to the department. For each class of depreciable asset the following depreciation and amortisation rates are used:

Physical asset class Rate % Buildings 2 - 20 Infrastructure 2 – 5 Plant and equipment 2 – 33.3

(n) Impairment of Non-Current Assets All non-current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, the department determines the asset's recoverable amount. Any amount by which the asset's carrying amount exceeds the recoverable amount is recorded as an impairment loss. The asset's recoverable amount is determined as the higher of the asset's fair value less costs to sell and depreciated replacement cost. An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at a re-valued amount. When the asset is measured at a re-valued amount, the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a re-valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Refer also Note 1(k). (o) Payables Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price, gross of applicable trade and other discounts. Amounts owing are unsecured and are generally settled on 30 day terms. (p) Financial Instruments Recognition Financial assets and financial liabilities are recognised in the Statement of Financial Position when the department becomes party to the contractual provisions of the financial instrument. Classification Financial instruments are classified and measured as follows:

Cash and cash equivalents – held at fair value through profit or loss Receivables – held at amortised cost Payables – held at amortised cost

The department does not enter into transactions for speculative purposes, nor for hedging. Apart from cash and cash equivalents, the department holds no financial assets classified at fair value through profit or loss. As the department is appropriation funded the only financial instruments for the department are cash, receivables and payables, these are all current and can be found in the departments Statement of Financial Position.



Page 20

(q) Employee Benefits Employer superannuation contributions, annual leave levies and long service leave levies are regarded as employee benefits. Wages, Salaries and Sick Leave Wages and salaries due but unpaid at reporting date are recognised in the Statement of Financial Position at the current salary rates. As the department expects such liabilities to be wholly settled within 12 months of reporting date, the liabilities are recognised at their undiscounted values. Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken. Annual Leave and Long Service Leave The department is part of The Queensland Government’s Annual Leave Central Scheme (ALCS) and Long Service Leave Scheme (LSL). Under this scheme, a levy is made on the department to cover the cost of employees' annual leave (including leave loading and on-costs) and long service leave. The levies are expensed in the period in which they are payable. Amounts paid to employees for annual leave and long service leave are claimed from the scheme quarterly in arrears. No provision is recognised in the department's financial statements as the liability is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting. Superannuation Employer superannuation contributions are paid to QSuper, the superannuation scheme for Queensland Government employees, at rates determined by the Treasurer on the advice of the State Actuary. Contributions are expensed in the period in which they are paid or payable. The department’s obligation is limited to its contribution to QSuper. The QSuper scheme has defined benefit and defined contribution categories. The liability for defined benefits is held on a Whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting. Salary related taxes The department is exempt from paying Payroll Tax, this change was implemented from 1 July 2014. Key Management Personnel and Remuneration Key executive management personnel and remuneration disclosures are made in accordance with section 5 of the Financial Reporting Requirements for Queensland Government Agencies issued by Queensland Treasury. Refer Note 6. (r) Insurance The department’s non-current physical assets, apart from its non-commercial water infrastructure assets, are insured through the Queensland Government Insurance Fund with premiums being paid on a risk assessment basis. In addition, the department pays premiums to WorkCover Queensland in respect of its obligations for employee compensation. (s) Contributed equity Non-reciprocal transfers of assets and liabilities between wholly-owned Queensland State Public Sector entities as a result of machinery-of-Government changes are adjusted to Contributed Equity in accordance with Interpretation 1038 Contributions by Owners Made to Wholly Owned Public Sector Entities. Appropriations for equity adjustments are similarly designated.



Page 21

(t) Taxation The department is a State body as defined under the Income Tax Assessment Act 1936 and is exempt from Commonwealth taxation with the exception of Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). As such, input tax credits receivable from and GST payable to the Australian Taxation Office (ATO), along with FBT, are recognised and accrued (refer to note 10). (u) Issuance of Financial Statements The financial statements are authorised for issue by the Director-General and Chief Finance Officer at the date of signing the Management Certificate. (v) Accounting Estimates and Judgements The preparation of financial statements necessarily requires the determination and use of certain critical accounting estimates, assumptions, and management judgements that have that potential to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Such estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant. Estimates and assumptions with the most significant effect on the financial statements are outlined in the following notes: Valuation of Property, Plant and Equipment – Notes 1(k) – (l) and Note 11 Depreciation and Amortisation – Note 1(m) and Note 11 Commitments – Note 17 Further, the matters covered in each of those notes (except for Depreciation and Amortisation) necessarily involve estimation uncertainty with the potential to materially impact on the carrying amount of the department's assets and liabilities in the next reporting period. Reference should be made to the respective notes for more information. (w) Rounding and Comparatives Amounts included in the financial statements are in Australian dollars and have been rounded to the nearest $1,000 or, where that amount is $500 or less, to zero, unless disclosure of the full amount is specifically required. Comparative information has been restated where necessary to be consistent with disclosures in the current reporting period. (x) New and Revised Accounting Standards The department did not voluntarily change any of its accounting policies during 2014-15. The Australian Accounting Standard applicable for the first time as from 2014-15 that had the most significant impact on the department’s financial statements is AASB 1055 Budgetary Reporting. AASB 1055 became effective from reporting periods beginning on or after 1 July 2014. In response to this new standard, the department has included in these financial statements a comprehensive new note 'Budget vs Actual Comparison' (note 20). This note discloses the department's original published budgeted figures for 2014-15 compared to actual results, with explanations of major variances, in respect of the department's Statement of Comprehensive Income, Statement of Financial Position and Statement of Cash Flows. The department is not permitted to early adopt a new or amended accounting standard ahead of the specified commencement date unless approval is obtained from Queensland Treasury. Consequently, the department has not applied any Australian Accounting Standards and Interpretations that have been issued but are not yet effective. The department applies standards and interpretations in accordance with their respective commencement dates. At the date of authorisation of the financial report, the expected impacts of new or amended Australian Accounting Standards with future commencement dates are as set out below.



Page 22

(x) New and Revised Accounting Standards (cont’d) From reporting periods beginning on or after 1 July 2016, the department will need to comply with the requirements of AASB 124 Related Party Disclosures. That accounting standard requires a range of disclosures about the remuneration of key management personnel, transactions with related parties/entities, and relationships between parent and controlled entities. The department already discloses information about the remuneration expenses for key management personnel (refer to note 6) in compliance with requirements from Queensland Treasury. Therefore, the most significant implications of AASB 124 for the department's financial statements will be the disclosures to be made about transactions with related parties, including transactions with key management personnel or close members of their families. AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities amends AASB 13 Fair Value Measurement effective from annual reporting periods beginning on or after 1 July 2016. The amendments provide relief from certain disclosures about fair values categorised as level 3 under the fair value hierarchy (refer to note 1(l)). Accordingly, the following disclosures for level 3 fair values in note 11 will no longer be required:

the disaggregation of certain gains/losses on assets reflected in the operating result; quantitative information about the significant unobservable inputs used in the fair value measurement;

and a description of the sensitivity of the fair value measurement to changes in the unobservable inputs.

As the amending standard was released in early July 2015, the department has not early adopted this relief in these financial statements, as per instructions from Queensland Treasury. However, the department will be early adopting this disclosure relief as from the 2015-16 reporting period (also on instructions from Queensland Treasury). All other Australian accounting standards and interpretations with future commencement dates are either not applicable to the department's activities, or have no material impact on the department.


Department of Energy and Water Supply Notes to and forming part of the Financial Statements 2014-15 2015 2014 $’000 $’000

Page 23

2. Reconciliation of Payments from Consolidated Fund to Appropriation Revenue Recognised in Statement of Comprehensive Income

Administered on a whole-of-Government basis Budgeted appropriation revenue 711,178 639,044 Lapsed appropriation revenue (66,017) (63,967) Total Appropriation Receipts (cash) 645,161 575,077

Less: Opening balance of appropriation revenue receivable (70,000) - Plus: Closing balance of appropriation revenue receivable 25,747 Plus: Opening balance of appropriation revenue payable 41,064 9,806 Less: Closing balance of appropriation revenue payable - (41,064) Net Appropriation Revenue 641,972 543,819 Plus: Deferred appropriation payable to consolidated fund (expense) 11,664 41,064

653,637 584,883

Budgeted equity adjustment appropriation (3,900) 4,000

Lapsed equity adjustment (5,359) (78,527) Equity Adjustment receipts (payments) (9,259) (74,527)

Plus: Closing balance of equity adjustment receivable - 70,000

Equity Adjustment Recognised in Contributed Equity (9,259) (4,527)

Appropriation Revenue for Services Recognised in Statement of Comprehensive Income

Reconciliation of Payments from Consolidated Fund to Equity Adjustment Recognised in Contributed Equity

Budgeted appropriation revenue 46,257 103,473 Lapsed appropriation revenue (6,728) (55,825)

Total Appropriation Receipts (cash) 39,529 47,648

Less: Opening balance of appropriation revenue receivable - (927)

Plus: Opening balance of appropriation revenue payable 1,737 13,042

Less: Closing balance of appropriation revenue payable (4,435) (1,737)

Net Appropriation Revenue 36,832 58,026

Plus: Deferred appropriation payable to consolidated fund (expense) 3,689 1,861

40,521 59,887

Budgeted equity adjustment appropriation - - Lapsed equity adjustment (2,022) - Equity Adjustment Recognised in Contributed Equity (2,022) -

Appropriation Revenue for Services Recognised in Statement of Comprehensive Income

Reconciliation of Payments from Consolidated Fund to Equity Adjustment Recognised in Contributed Equity



Page 24

3. Grants and Other Contributions

4. Other Revenue

5. Employee Expenses

* Refer to note 1 (q).

The number of employees as at 30 June 2015, including both full-time employees and part-time employees, measured on a full-time equivalent basis (reflecting Minimum Obligatory Human Resource Information (MOHRI)) is:

Other contributions 4,126 - Services received at below fair value 58 59 Total 4,183 59

Recoveries 187 221 Other 364 2,600 Total 551 2,821

Employee Benefits

Wages and salaries 19,059 19,800 Employer superannuation contributions * 2,495 2,648 Annual leave levy/expense* 1,693 2,003 Long service leave levy* 433 455 Termination benefits 645 665 Other employee benefits 20 10

Employee Related Expenses

Salary related taxes * (2) 1,257 Workers' compensation premium 89 242 Other employee related expenses 295 157

Total 24,726 27,237

Number of employees: 211 232



Page 25

6. Key Management Personnel and Remuneration Expenses

a) Key Management Personnel The following details for key management personnel include those positions that had authority and responsibility for planning, directing and controlling the activities of the department during 2014-15. Further information on these positions can be found in the body of the Annual Report under the section relating to Executive Management. Position Responsibilities Current Incumbents

Contract classification and appointment authority

Date appointed to position

Director-General The Director-General is responsible for the efficient, effective and economic administration of the department.

CEO 3; employed under s92 of the Public Service Act 2008

5 October 2013

Deputy Director-General, Energy

The Deputy Director-General is responsible for the efficient, effective and economic administration of the Energy functions and responsibilities of the department.

CEO 5; employed under s122 of the Public Service Act 2008

4 June 2012

Acting Deputy Director-General, Energy

The Deputy Director-General is responsible for the efficient, effective and economic administration of the Energy functions and responsibilities of the department.

SES 3; employed under s122 of the Public Service Act 2008

26 May 2014 - 25 July 2014 22 September 2014 - 30 June 2015

Deputy Director-General, Water Supply

The Deputy Director-General is responsible for the efficient, effective and economic administration of the Water Supply functions and responsibilities of the department.


20 August 2012

Deputy Director-General, Business and Corporate Partnership*

The Deputy Director-General provides strategic leadership and direction of the departments corporate and business support functions of the agency.


29 July 2013

*Costs of this position are funded by the Department of Natural Resources and Mines as per the Corporate Partnership Agreement between the two departments. b) Remuneration Expenses Remuneration policy for the department’s key management personnel is set by the Queensland Public Service Commission as provided for under the Public Service Act 2008. The remuneration and other terms of employment (including motor vehicle entitlements) for the key management personnel are specified in employment contracts. The Director-General’s contract under the previous Government also provided for an At Risk Component payment. For the 2014-15 year, remuneration packages of key management personnel increased by 2.2% in accordance with government policy. The following disclosures focus on the expenses incurred by the department during the respective reporting periods that is attributable to key management positions. Therefore, the amounts disclosed reflect expenses recognised in the Statement of Comprehensive Income.


Department of Energy and Water Supply Statement of Changes in Equity – Controlled for the year ended 30 June 2015

Page 6


Accumulated Surplus

Asset Revaluation

Surplus

Contributed Equity

Total

Notes $'000 $'000 $'000 $'000

Balance as at 1 July 2014 2,064 - 14,237 16,301

Operating result from continuing operations - - - -

Other Comprehensive Increase in asset revaluation surplus 15 - 68 - 68

Transactions with Owners as Owners Equity withdrawal - - (2,022) (2,022)

Balance as at 30 June 2015 2,064 68 12,215 14,346

Balance as at 1 July 2013 2,657 - 14,219 16,876

Operating result from continuing operations (592) - - (592)

Transactions with Owners as Owners Machinery of Government adjustment - - 18 18

Balance as at 30 June 2014 2,064 - 14,237 16,301


Page 26

6. Key Management Personnel and Remuneration Expenses (cont’d)

Remuneration expenses for key management personnel comprise of the following components: Short term employee expenses which include:

salaries, allowances and leave entitlements earned and expensed for the entire year, or for that part of the year during which the employee occupied the specified position.

performance payments recognised as an expense during the year non-monetary benefits - consisting of provision of car parking and vehicle together with fringe benefits

tax applicable to the benefit. Long term employee expenses include amounts expensed in respect of long service leave entitlements

earned. Post-employment expenses include amounts expensed in respect of employer superannuation obligations. Termination benefits are not provided for within individual contracts of employment. Contracts of

employment provide only for notice periods or payment in lieu of notice on termination, regardless of the reason for termination.

Subsequent to 30 June 2015 the Director-General separated from the department. Before the date of management certification of these financial statements, the payment for the Director-Generals separation had been determined and will be included in KMP expenses in the 2015-16 financial statements. 1 July 2014 – 30 June 2015

Position Short Term Employee Expenses

Long Term Employee Expenses

Post -Employment

Expenses

Termination Benefits

Total Expenses

Monetary Expenses

$'000

Non-Monetary Benefits

$'000

$'000

$'000

$'000

$'000

Director-General 382 6 8 42 - 439 Deputy Director-General, Energy 251 4 7 23 - 283 Acting Deputy Director-General, Energy 172 5 4 16 - 197

Deputy Director-General, Water Supply 224 9 5 24 - 261

Deputy Director-General, Business and Corporate Partnership* - - - - - -

* As noted above this position is shared with the Department of Natural Resources and Mines (DNRM) and is fully funded by DNRM to 30 June 2015 as per the Corporate Partnership arrangement. Remuneration is disclosed in the financial statements of DNRM. c) Performance Payments The remuneration package for the Director-General under the previous Government included a potential At Risk component payment up to a maximum of $61,428. Eligibility for such a performance payment in respect of 2013-14 was conditional on the achievement of objectives that are documented in that position’s performance agreement. The total remuneration package for the Director-General included a portion that is “at risk” and paid only if they met or exceeded the agreed performance standards. The performance evaluation process comprised: reporting on end of year achievement and self-assessment by the Director-General against their

performance agreement/intended outcomes;

a rigorous, independent and objective assessment of the Director-General’s performance at the end of the financial year, culminating in recommendations to the Premier; and

the Premier’s ultimate discretion regarding whether the Director-General was paid an At Risk Component payment and, if so, how much.



Page 27

6. Key Management Personnel and Remuneration Expenses (cont’d)

No At Risk Component payment was made for 2014-15 in accordance with the Government’s commitment to discontinue such payments to Directors-General.

The remuneration package for the Deputy Director-General, Energy includes a potential performance payment up to a maximum of 15% of that position’s total fixed remuneration, which equates to approximately $32,896 for 2014-15. Eligibility for such a performance payment is determined by the Director-General and is conditional on the achievement of objectives that are documented in that position’s performance agreement. As at the date of management certification of these financial statements, the eligibility to a performance payment for the Deputy Director-General, Energy in respect of the 2014-15 financial year had not yet been confirmed. A decision by the Director-General is expected to be made during the financial year with any approved performance payment to be reported as an expense within 2015-16. The Acting Deputy Director-General, Energy and the Deputy Director-General, Water Supply are eligible for a retention incentive payment which equates to 15% of their total remuneration. This incentive payment was payable in two payments of which 3 % was payable in February 2015 and the remaining 12% payable in August 2015. No other key management personnel are eligible for performance payments. The basis for performance payments expensed in the 2014-15 financial year is set out below: Position Date Paid Basis for payment Director-General 29/10/2014 Consistent with the abovementioned timeframe and

process, this payment relates to the achievement of performance criteria during 2013-14. In accordance with the terms of the performance agreement for this position, it was determined that a payment of $20,068 be awarded.

Deputy Director-General, Energy 07/01/2015 Consistent with the abovementioned timeframe and process, this payment relates to the achievement of performance criteria during 2013-14. In accordance with the terms of the performance agreement for this position, it was determined that a payment of $43,961 be awarded.

Acting Deputy Director-General, Energy

04/03/2015 Consistent with the abovementioned process this payment relates to the 3% incentive payment which was determined to be $6,247

Deputy Director-General, Water Supply

04/03/2015 Consistent with the abovementioned process this payment relates to the 3% incentive payment which was determined to be $7,281



Page 28

7. Supplies and Services

Administered on a whole-of-Government basis

Repairs and maintenance 830 38Consultants and contractors 255 406Other supplies and services 31 270Total 1,116 714

8. Grants and Subsidies


Community service obligations - Water Supply 13,640 14,367Community service obligations - Energy 618,504 524,411Water rebate - (948)Total 632,144 537,830

9. Other Expenses

*Total audit fees payable to the Queensland Audit Office relating to the 2014-15 financial statements are estimated to be $135,800 (2014: $140,000). There are no non-audit services included in this amount. ** The department made an ex-gratia payment to an employee under section 72 of the Financial Accountability Act 2009, and in accordance with the departments Financial Management Practice Manual to partly compensate for a loss.

Consultants and contractors 2,711 5,184 Accommodation expenses 2,661 2,462 Shared services costs 968 1,128 Computer expenses 860 1,132 Service delivery costs 784 400 Travel 244 239 Motor vehicle expenses 65 101 Subscriptions and memberships 33 74 Other 1,022 487 Total 9,349 11,207

Grants and subsidies - Water Supply 1,633 16,201 Grants and subsidies - Energy 4,764 6,305 Total 6,398 22,506

Deferred appropriation refundable to Consolidated Fund 3,689 1,861 External audit fees * 203 150 Legal fees 92 84 Insurance premiums - QGIF 50 50 Net losses from disposal of property, plant and equipment 46 - Insurance premiums - Other (0) 7 Ex-gratia payment** 6 - Other 503 44 Total 4,590 2,196



Page 29

10. Receivables


Trade debtors 360 802Appropriation receivable 25,747 28,934

26,107 29,736

GST receivable 10,628 9,257GST payable (47) (13)

10,581 9,244

Total 36,687 38,981

The department does not have an allowance for impairment loss as all receivables are assessed as recoverable. 11. Property, Plant and Equipment

* The department has restated the asset classes for Plant and Equipment to reflect the true nature of assets owned by the department. Plant and equipment The department has plant and equipment with an original cost of $0.390 million (2013-14 $0.713 million) and a written down value of zero still being used in the provision of services. These assets will be replaced or disposed as required by the department in 2015-16 or subsequent years.

Trade debtors 32 554 Loans and advances 500 1,000 Annual leave reimbursements 382 514 Other 99 8

1,013 2,077

GST input tax credits receivable 169 233 GST payable 44 (6)

213 227

Total 1,226 2,303

Plant and equipment * At cost 1,536 2,022 Less: accumulated depreciation 957 1,262

579 759 Heritage and cultural assets

At fair value 210 143

Total 789 902



Page 30

11. Property, Plant and Equipment (cont’d)

Heritage and Cultural Heritage and cultural assets is related to a structure called “Eye to The Sky” built by Graham Chalcroft. The structure is located on the southern breakwater spit to the Magnetic Island Harbour complex located at Nelly Bay. This artwork was previously classed as Plant and Equipment. The artwork was subject to specific appraisal by Artfully Valuers effective June 2015. Artfully Valuers specialise in the valuation of assets of the type controlled by the department. As there is no active market for this asset, the fair value is determined by estimating the cost to reproduce the item with the features and materials of the original items, with substantial adjustments made to take into account the artworks characteristics.


2015 2014'000 '000

LandAt fair value 524 709

BuildingsAt fair value 98 98Less: accumulated depcreciation buildings 24 21

73 77Plant and equipment

At cost 110 -Less: accumulated depreciation plant & equipment 5 -

105 -Infrastructure

At fair value 563,543 563,543Less: accumulated depreciation infrastructure 335,901 327,197

227,642 236,347

Work in progress 111 48

Total 228,456 237,180

Property, plant and equipment reconciliation Plant & Equipment

Heritage & Cultural Assets

Total

2015 2015 2015 $'000 $'000 $'000 760 143 902 19 - 19

(39) - (39) Net revaluation increments/(decrements) - 68 68

(160) - (160) 579 210 789

Plant & Equipment

Heritage & Cultural Assets

Total

2014 2014 2014 $'000 $'000 $'000

886 143 1,028 26 - 26

- - - 18 - 18

(170) - (170) 760 143 902 Carrying amount at 30 June 2014

Depreciation Transfers in from other Queensland Government entities Disposals

Carrying amount at 1 July 2014

Disposals

Carrying amount at 30 June 2015

Carrying amount at 1 July 2013 Acquisitions

Acquisitions

Depreciation



Page 31

11. Property, Plant and Equipment (cont’d)

Land The department’s land was last revalued based on specific appraisals by the State Valuation Service in May 2014. The fair value of land was based on publicly available data on sales of similar land in the area in accordance with industry standards. In determining the values, adjustments were made to the sales data to take into account the characteristics of the land, current intentions for use, any legal/zoning restrictions on the land and the highest and best use of the asset given any identified restrictions. A review on the fair value of the department’s land was undertaken in May 2015 using indices provided by State Valuation Services. It was determined that no material changes to the assets have occurred that would result in a material change in the current reported fair value of the assets. Infrastructure The departments non-commercial water assets was last revalued by qualified departmental engineers in May 2014, using a depreciated replacement cost approach (as there is no active market for such assets). The depreciated replacement cost was based on a combination of internal records of the original cost of the plant, adjusted for contemporary technology and construction approaches (MEERA). Significant judgement is also used to assess the remaining service potential of the assets, given local climatic and environmental conditions, projected usage, and records of the current condition of the assets. A review on the fair value of the department’s infrastructure was undertaken in May 2015 using indices as determined by the department’s qualified engineers and the current condition of each asset. It was determined that no material changes to the assets have occurred that would result in a material change in the current reported fair value of the assets. The department is currently in the process of transferring these assets to other entities and/or government departments in accordance with the departments Total Asset Management Plan.


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Page 33

11. Property, Plant and Equipment (cont’d) Categorisation of fair values recognised as at 30 June 2015 (refer to note 1(l))

Total$'000

Land and Buildings 598 Infrastructure 227,642

Level 2$'000

Level 3$,000

598 227,642

Valuation techniques and process used to determine level 3 fair values The following table summarises the quantitative information about the significance in the level 3 unobservable inputs used in the fair value measurements.

Unobservable inputs Basis Range of Inputs Relationship between unobservable inputs and fair value

MEERA Value Recently calculated budget figures form the MEERA valuation basis.

20% contingency allowance for site conditions

Increase in costs would result in higher fair value

Terminal Values Engineering judgement Engineers estimate Increase in terminal value would result in higher fair value

Potential alternate use Operational assessment Management assessment Higher alternate use would results in higher fair value

Assets where current use is not highest and best use The Department owns and operates a number of structures in regional and remote Queensland for the benefit of local communities. The main benefits are water supply for towns, mines, agriculture, domestic and stock purposes; recreation and tourism; basic flood mitigation, emergency water reserves and road access. Future potential for other economic use of water entitlements and these structures could, for some assets, be more than the current use. The Department is not prevented from transferring these assets to another entity that could deliver greater social and economic benefits to the community, although this would require agreement of the Government.



Page 34

12. Payables


CurrentTransfer of administered item revenue to government payable - 585Community service obligations 114,009 102,124Other creditors 275 96Total 114,283 102,805

13. Accrued Employee Benefits

14. Other Liabilities

Current Trade creditors 338 920 Grants and subsidies payable - 5,473 Other creditors 397 1,032 Total 736 7,425

Annual leave levy payable 503 600 Accrued salaries and wages 315 77 Long service leave levy payable 105 336 Other 1 10 Total 924 1,023

Current Appropriation revenue refundable 4,435 1,737 Unearned revenue - 301 Total 4,435 2,038



Page 35

15. Asset Revaluation Surplus by Class


Land Buildings Infrastructure Total $'000 $'000 $'000 $'000

Balance 1 July 2014 109 21 236,951 237,081 Revaluation increments - - - - Revaluation decrements - - - - Balance 30 June 2015 109 21 236,951 237,081

The asset revaluation surplus represents the net effect of upward and downward revaluations of assets to fair value. 16. Reconciliation of Operating Result from Operating Activities to Net Cash

Heritage and Cultural Assets Total

$'000 $'000 Balance 1 July 2014 - - Revaluation increments 68 68 Revaluation decrements - - Balance 30 June 2015 68 68

2015 2014 $'000 $'000

Operating result for the year - (592)

Depreciation expense 192 213 Loss on disposal of property, plant and equipment 46 - Goods and services received below fair value (50) (51)

Change in assets and liabilities: (Increase)/decrease in receivables 564 634 (Increase)/decrease in other current assets (70) (50) (Increase)/decrease in GST input tax credits receivable 14 (17) Increase/(decrease) in accounts payable (4,127) (24,345) Increase/(decrease) in accrued employee benefits (99) (369)

Net cash provided by (used in) operating activities (3,529) (24,577)



2015 2014 $’000 $’000

Page 36

16. Reconciliation of Operating Result from Operating Activities to Net Cash (cont’d)


Operating result for the year - (1,001)

Depreciation expense 8,712 6,814

Change in assets and liabilities:(Increase)/decrease in receivables 2,293 (59,490) Increase/(decrease) in payables 11,478 (1,910) (Increase)/decrease other assets (102) -

Net cash from operating activities 22,381 (55,587)

17. Commitments for Expenditure

(a) Non-Cancellable Operating Lease

Building accommodation, car park and storage leases 21,900 21,747 21,900 21,747

Not later than one year 3,040 2,980 Later than one year and not later than five years 12,536 12,350 Later than five years 6,323 6,417 Total 21,900 21,747

(b) Other Expenditure Commitments

Operating expenses 887 1,063 887 1,063

Not later than one year 879 953 Later than one year and not later than five years 8 110 Later than five years - - Total 887 1,063

(c) Grants and Subsidies

Grants and subsidies 330 - 330 -

Not later than one year 309 - Later than one year and not later than five years 21 - Later than five years - - Total 330 -

Other expenditure committed at the end of the period but not recognised in the accounts are as follows:

Grants and subsidies commitments inclusive of anticipated GST, committed at the end of period but not recognised in the accounts are as follows:

Commitments under operating leases at reporting date are inclusive of anticipated GST and are payable as follows:



Page 37

17. Commitments for Expenditure (cont’d) Administered on a whole-of-Government basis

2015 2014 $'000 $'000

(a) Other Expenditure Commitments

Operating expenses 1,911 7341,911 734

Not later than one year 1,911 734Later than one year and not later than five years - - Later than five years - - Total 1,911 734

(b) Grants and Subsidies

Grants and subsidies 522,977 1,444,898522,977 1,444,898

Not later than one year 495,528 727,503Later than one year and not later than five years 27,449 717,395Later than five years - - Total 522,977 1,444,898

Grants and subsidies commitments inclusive of anticipated GST, committed at the end of period but not recognised in the accounts are as follows:

Other expenditure committed at the end of the period but not recognised in the accounts are as follows:

The department does not have any capital commitments. Operating leases are entered into as a means of acquiring access to office accommodation and storage facilities. Lease payments are generally fixed, but with inflation escalation clauses on which contingent rentals are determined. 18. Contingencies Litigation in Progress As at 30 June 2015 there are 2 claims against the department, both of which are filed in the Supreme Court (2014: 2 claims, 1 Supreme Court and 1 lodged with the department).



Page 38

19. Budget vs Actual Comparison

Original budget has been restated where necessary to be consistent with disclosures in the current reporting period. Administered on a whole-of-Government basis

Statement of Comprehensive Income VarianceOriginal Budget Actual

Notes 2015 2015 Variance Variance$'000 $'000 $'000 % of Budget

Income from Continuing OperationsAppropriation revenue 18 711,178 653,637 (57,541) -8%User charges and fees 673 760 87 13%Other revenue 19 125 471 346 277%

Total Income from Continuing Operations 711,976 654,868 (57,108) -8%

Expenses from Continuing OperationsSupplies and services 20 2,402 1,116 (1,286) -54%Grants and subsidies 21 703,501 632,144 (71,357) -10%Depreciation and amortisation 22 5,400 8,712 3,312 61%

Total Expenses from Continuing Operations 711,303 641,973 (69,330) -10%

Net Operating Result before transfers to government 673 12,896 12,223 1816%

. Transfers of administered appropriation to government 23 - 11,664 11,664 0%

. Transfers of administered revenue to government 24 673 1,232 559 83%

Operating Result for the Year - - (0) 0%

Statement of Comprehensive Income Variance Original Budget Actual

Notes 2015 2015 Variance Variance $'000 $'000 $'000 % of Budget

Income from Continuing Operations Appropriation revenue 1 46,257 40,521 (5,736) -12% Grants and other contributions 2 - 4,183 4,183 100% Other revenue 3 4,472 551 (3,921) -88%

Total Income from Continuing Operations 50,729 45,255 (5,474) -11%

Expenses from Continuing Operations Employee expenses 24,836 24,726 (110) 0% Supplies and Services 4 13,875 9,349 (4,526) -33% Grants and subsidies 5 11,441 6,398 (5,043) -44% Other expenses 6 245 4,590 4,345 1773% Depreciation and amortisation 332 192 (140) -42%

Total Expenses from Continuing Operations 50,729 45,255 (5,474) -11%

Operating Result for the Year - - - 0%



Page 39

19. Budget vs Actual Comparison (cont’d)


VarianceOriginal Budget Actual

Statement of Financial Position Notes 2015 2015 Variance Variance$'000 $'000 $'000 % of Budget

Current AssetsCash and cash equivalents 25 24,348 75,803 51,455 211%Receivables 26 15,595 36,687 21,092 135%Prepayments - 102 102 100%

Total Current Assets 39,943 112,593 72,650 182%

Non-Current AssetsProperty, plant and equipment 27 160,612 228,456 67,844 42%

Total Non-Current Assets 160,612 228,456 67,844 42%

Total Assets 200,555 341,049 140,494 70%

Current LiabilitiesPayables 111,628 114,283 2,655 2%

Total Current Liabilities 111,628 114,283 2,655 2%

Total Liabilities 111,628 114,283 2,655 2%

Net Assets 88,927 226,766 137,839 155%

Total Equity 28 88,927 226,766 137,839 155%

Variance Original Budget Actual

Statement of Financial Position Notes 2015 2015 Variance Variance $'000 $'000 $'000 % of Budget

Current Assets Cash and cash equivalents 7 20,406 18,306 (2,100) -10% Receivables 8 2,789 1,226 (1,563) -56% Prepayments 82 120 38 46% Total Current Assets 23,277 19,652 (3,626) -16%

Non-Current Assets Property plant and equipment 497 789 292 59% Intangible assets 9 2,300 - (2,300) -100% Total Non-Current Assets 2,797 789 (2,008) -72%

Total Assets 26,074 20,441 (5,634) -22%

Current Liabilities Payables 10 6,474 736 (5,738) -89% Accrued employee benefits 886 924 38 4% Other 11 - 4,435 4,435 100% Total Current Liabilities 7,360 6,094 (1,264) -17%

Total Liabilities 7,360 6,094 (1,264) -17%

Net Assets 18,714 14,347 (4,368) -23%

Total Equity 12 18,714 14,347 (4,366) -23%



Page 40

19. Budget vs Actual Comparison (cont’d)

OriginalVariance Budget Actual

Statement of Cash Flows Notes 2015 2015 Variance Variance$'000 $'000 $'000 % of Budget

Cash flows from operating activitiesInflows:Service Appropriation receipts 1 46,257 39,529 (6,728) -15%GST input tax credits received from Australian Taxation Office 2,025 1,865 (160) -8%GST collected from customers 13 425 37 (388) -91%Other inflows 4,472 4,877 405 9%

Outflows:Employee expenses (25,831) (24,770) 1,061 -4%Supplies and services 4 (13,992) (10,434) 3,558 -25%Grants and subsidies (11,441) (11,872) (431) 4%GST paid to suppliers 14 (2,278) (1,801) 477 -21%GST remitted to Australian Taxation Office 15 (402) (87) 315 -78%Other outflows 16 (245) (873) (628) 256%Net cash provided by (used in) operating activities (1,010) (3,529) (2,519) 249%

Cash flows from investing activitiesInflows:Loans and advances redeemed 1,000 1,000 - 0%Outflows:Payments for property, plant and equipment 9 (2,086) (19) 2,067 -99%Net cash provided by (used in) investing activities (1,086) 981 2,067 -190%

Cash flows from financing activitiesOutflows:Equity withdrawals 17 - (2,022) (2,022) 100%Net cash provided by (used in) financing activities - (2,022) (2,022) 100%

Net increase (decrease) in cash and cash equivalents (2,096) (4,570) (2,474) 118%Cash and cash equivalents at beginning of financial year 22,502 22,876 374 2%

Cash and cash equivalents at end of financial year 20,406 18,306 (2,100) -10%

Original budget has been restated where necessary to be consistent with disclosures in the current reporting period.



Page 41

Explanations of Major Variances Statement of Comprehensive Income 1. Actual is lower than the budget due to reduction in expenditure line items. 2. The actuals relate to the reclassification of $4.1 million received from energy market participants to fund the

Queensland contribution to the Australian Energy Market Commission (AEMC) as grants and other contribution. This was budgeted against other revenue.

3. The lower than budgeted actuals relate to the reclassification and posting of actuals for the $4.1 million

AEMC against grants and other contributions.

4. The actuals are lower than the budget primarily due to underspends for contractor and consultant’s payments deferred to 2015-16 for election commitments.

5. The variance primarily relates to the lower than anticipated expenditure for the Dam Spillway Upgrade

program ($4.7 million) due to finalisation of the program. Final claim was processed by the department in the 2014-15 financial year.

6. The actuals are higher than budget primarily due to appropriation refunded to Treasury ($3.7 million) and a clearance of a liability ($0.5 million) from the Department of Environment & Heritage Protection relating to prior year’s machinery-of-Government adjustments.

Statement of Financial Position 7. The actuals are lower than the budget due to reduced payables at year-end and the restatement of opening

balances due to the machinery-of-Government reconciliation.

8. Actual receivables are less than original budget. As it became apparent in mid-year the department revised the total receivables downwards to $1.5 million.

9. The decrease in actuals arose wholly due to the reallocation of the Water Industry Asset Management

system from capital to operating expense.

10. The actuals are lower than budget due to lower payables at year-end primarily in relation to Grants expenditure and early settlement of supplies and services before year-end.

11. The variance relates to appropriation payable to Queensland Treasury for unspent appropriation funds at

year-end.

12. The decrease in actuals is due to deferral of funding for the Water Industry Asset Management system and the restatement of opening balances due to the machinery-of-Government reconciliation of balances.

Statement of Cash Flows 13. The actuals are lower than budget due to higher budgeted amounts for GST in relation to contribution from

energy market participants for AEMC funding. As it became apparent in mid-year that actual GST revenue will be less than budget, the department revised the GST amount collected from customers.

14. The actuals are lower than budgeted due to lower expenditure on contractor and consultant payments on programs deferred to 2015-16 resulting in lower GST remitted to the Australian Taxation Office (ATO).

15. The actuals are lower than budget due to higher budgeted amounts for GST in relation to AEMC funding. As

it became apparent in mid-year, the department revised the GST amount remitted to the Australian Taxation Office.

16. The actuals are higher than the budgeted amount primarily due to $0.5 million relating to prior year

machinery-of-Government adjustment.

17. The outflow in actuals is primarily due to the reallocation of the Water Industry Asset Management system from capital to operating expenses.



Page 42

Administered Items Statement of Comprehensive Income 18. Appropriation revenue is lower than budget primarily due to the reduction in the Community Service

Obligation (CSO) payments during the year in particular Ergon payments under the Uniform Tariff Policy which resulted in lower network costs and lower energy purchases.

19. The increase in actuals relates to a refund received from Energex for an underspend on the funding related to the Demand Management Program Agreement.

20. The variance relates to reduced repairs and maintenance expenditure for the water infrastructure assets due

to delays in project and reallocation of funding to grants & subsidies.

21. Grants and subsidies actuals are lower than budget primarily due to CSO payments to Ergon under the Uniform Tariff Policy ($70.3 million) as a result of lower network costs and lower energy purchases.

22. The increase in depreciation expense is due to the revaluation increase of the water infrastructure assets.

23. The actual balance is the appropriation payable to Queensland Treasury for lapsed funding in 2014-15 for

CSO payments.

24. The increase in actuals primarily relates to refund from Energex (also see note 19) remitted to Queensland Treasury not included in the original budget.

Statement of Financial Position

25. Higher actual cash and receivables balances from original budget are due to the reallocation between equity

and cash, which increased the cash by $70 million.

26. The increase in the receivables is due to the change in the timing of appropriation funding.

27. The increase in actuals is due to revaluation of the water infrastructure assets in 2013-14.

28. The increase in actuals is due to reallocation of an equity adjustment to cash and receivables and the revaluation of the water infrastructure assets in 2013-14.


Page 43

Management Certificate Department of Energy and Water Supply These general purpose financial statements have been prepared pursuant to section 62(1) of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and Performance Management Standard 2009 and other prescribed requirements. In accordance with section 62(1)(b) of the Act we certify that in our opinion:

a) the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects; and

b) the statements have been drawn up to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of the Department of Energy and Water Supply for the financial year ended 30 June 2015 and of the financial position of the department at the end of the year; and

c) these assertions are based on an appropriate system of internal controls and risk management processes being effective, in all material respects, with respect to financial reporting throughout the reporting period.

Fiona Trenear BEcon, BCom, FCPA Paul Simshauser Chief Finance Officer Director-General 27 August 2015 27 August 2015


Appendix 1: Legislation administered by DEWS

Electricity Act 1994

Electricity–National Scheme (Queensland) Act 1997

Energy and Water Ombudsman Act 2006

Gas Supply Act 2003

Gladstone Power Station Agreement Act 1993

Liquid Fuel Supply Act 1984

National Energy Retail Law (Queensland) Act 2014

National Gas (Queensland) Act 2008

Nuclear Facilities Prohibition Act 2007

South-East Queensland Water (Distribution and Retail Restructuring) Act 2009

South East Queensland Water (Restructuring) Act 2007

(in so far as the minister is a jointly responsible minister for the purpose of chapter 2 of this Act)

Water Act 2000

Chapter 2, part 2, division 2A and 4; chapter 2A; chapter 4 (to the extent that it is relevant to category 1 water authorities); chapter 9, part 2 and, to the extent relevant to all these parts, chapters 5, 6 and 7

Chapter 8, section 999 and part 4A and part 5 jointly administered with the Minister for State Development and Minister for Natural Resources and Mines

Water Efficiency Labelling and Standards (Queensland) Act 2005

Water Supply (Safety and Reliability) Act 2008


Appendix 2: Government bodies

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Appendix 3: Government-owned corporations

Table A2: Government-owned corporations (2014–15)

Government-owned corporationLegislation under which the body was established Control of funds

Annual reporting arrangements

CS Energy Limited Government Owned Corporations Act 1993

Controls own funds Annual report to Parliament

Energex Limited Government Owned Corporations Act 1993


Ergon Energy Corporation Limited Government Owned Corporations Act 1993


Queensland Electricity Transmission Corporation Limited (Powerlink Queensland

Government Owned Corporations Act 1993


Stanwell Corporation Limited Government Owned Corporations Act 1993


SunWater Limited Government Owned Corporations Act 1993



Appendix 4: Performance statement

Table A3: Performance statement (2014–15)

Service standard Notes

2014–15 Target/ estimate

2014–15 Estimated actual

2014–15 Actual

Service area: Energy

Initiatives of PowerQ (the 30-year electricity strategy), as they relate to DEWS, are being delivered and implemented

90% 90% 90%

Level of compliance with energy regulatory and shareholder service requirements by energy retailers, distributors and generators:

• compliance monitoring of electricity and gas licence holders, including annual reporting and fees

• community infrastructure designation applications to be reviewed and processed in a robust manner for consideration and approval by the minister within a four-month period

90%

100%

90%

100%

90%

100%

Level of stakeholder satisfaction with engagement on key programs/initiatives (rated satisfied or very satisfied)

1 80% 80% 92%

Service area: Water Supply

Initiatives of WaterQ (the 30-year water strategy), as they relate to DEWS, are being delivered and implemented

90% 90% 90%

Percentage of the state’s drinking water services that have appropriate drinking water quality monitoring and response frameworks in place

100% 100% 100%

Level of stakeholder satisfaction with engagement on key programs/initiatives (rated satisfied or very satisfied)

1 80% 80% 92%

Variance reporting

1. During 2013–14, there was significant consultation with stakeholders in the drafting of WaterQ and PowerQ. These two strategies were released in early 2014. These strategies were followed by the release of the department’s blueprint in September 2014. Stakeholders were given a voice in these consultations, which has led to a higher level of satisfaction with the department as a whole.


Appendix 5: Report of the regulator’s activities under the Water Supply (Safety and Reliability) Act 2008

On 1 July 2008, the Water Supply (Safety and Reliability) Act 2008 (the Act) introduced new provisions to protect public health by regulating recycled water and drinking water quality, and by incorporating the existing service provider provisions of parts 1–5 of chapter 3 of the Water Act 2000.

The Act provides for the chief executive of the department, as the regulator, to undertake certain duties under these provisions, which may include the preparation of an annual report (chapter 2, part 2 of the Act). This summary is the regulator’s report for the period 1 July 2014 to 30 June 2015.

During the reporting period, the regulator continued to work in partnership with regulated entities and external stakeholders by enabling the delivery of safe and reliable drinking and recycled water supplies in Queensland—through the implementation of water quality management and a performance outcome regulatory framework, and effective compliance monitoring.

Recycled waterCurrently, chapter 3 of the Act requires a recycled water provider to have an approved recycled water management plan (RWMP) to supply recycled water for:

• augmenting a supply of drinking water

• a dual reticulation system (including flushing toilets and/or cold water laundry tap, irrigating gardens, washing down external surfaces at a residential premises)

• the irrigation of minimally processed food crops defined in the Public Health Regulation

• other critical purposes if a scheme has been declared a critical recycled water scheme

• other use(s) prescribed under regulation.

The recycled water sections of the Act were amended on the 13 May 2014. Only the above recycled water schemes are now required to have an approved RWMP. However, all recycled water schemes are required to be registered.

During the period 1 July 2014 to 30 June 2015, the regulator registered 155 recycled water schemes, amended details of 1 recycled water scheme and cancelled registration of 1 recycled water scheme.

A new register of recycled water schemes was established to provide information to regulators and the public about where water recycling activities are occurring. The regulator published details from the recycled water register on the DEWS website in March 2015.

Applications for approval of an RWMP are assessed against criteria in the Act and the Recycled water management plan and validation guidelines relating to hazard identification, risk assessment and risk management. These requirements reflect the approach outlined in the Australian guidelines for water recycling 2006. Recycled water providers must comply with the requirements detailed in the information notice for the decisions (approval) as well as requirements specified in the Act.


Regulatory guidelines have been prepared by the regulator to help recycled water providers comply with the recycled water provisions of the Act. These are:

• Recycled water management plan and validation guidelines

• Water quality guidelines for recycled water schemes

• Recycled water management plan audit reporting guidelines

• Annual reporting guideline for recycled water schemes

• Public reporting guideline for recycled water schemes.

A non-statutory incident reporting guideline, RWMP template and frequently asked questions for recycled water schemes have also been published on the department’s website.

The regulator also provides ongoing advice on the regulatory requirements for numerous water recycling projects for dual reticulation and the irrigation of a range of minimally processed food crops.

During 2014–15, one new RWMP application and one application to amend RWMP were received and assessed by the regulator. As at 30 June 2015, nine RWMPs were approved. However, three RWMPs have been suspended during this period. Two applications have been received by the regulator to permanently stop supply of recycled water and cancel RWMPs.

Approved RWMP holders are required to keep their plans and procedures current through audits and review processes. During 2014–15, five audit reports were received and reviewed and eight annual reports were received and reviewed.

The regulator also works closely with Queensland Health to ensure that providers appropriately manage recycled water incidents and protect public health. In 2014–15, there were eight incidents reported regarding recycled water schemes. The majority of these incidents were related to low chlorination levels, and one to non-compliance with annual value of Escherichia coli (E. coli). These reporting requirements were specified in the information notice for the decision.

Drinking water quality The regulatory framework for managing drinking water quality in Queensland, introduced in 2008, requires drinking water service providers to have an approved risk-based drinking water quality management plan (DWQMP) to demonstrate how they manage public health risks. The regulatory requirements have been implemented through a phased approach, commencing with mandatory monitoring and reporting requirements, and culminating with providers having approved DWQMPs. All providers who were registered at the commencement of the Act are operating under an approved DWQMP. Any ‘new’ drinking water service providers have one year from registration to have an approved DWQMP.

At the commencement of the Act, the regulator acknowledged the disparity of skills across the water industry in Queensland, and the need to support the regulatory framework. The regulator established a consistent approach by developing procedures and processes for communicating with, and providing technical support to, drinking water service providers. This support has included the Snapshot Monitoring Program in 2012, the Small and Medium Provider Support Program in 2012 and 2013, and phases 1–3 of the Indigenous Support Program.

These support activities have resulted in the submission of DWQMPs that are generally consistent in approach and presentation of the information, which in turn streamlines the assessment and decision-making process for the department. The support activities have also resulted in the submission and approval of DWQMPs for all 16 Indigenous service providers.

It is important to note that under the Act requirements, drinking water service providers continue to be solely responsible for the safety and quality of their drinking water supplies.

Regardless of where they are in the regulatory framework, all registered drinking water service providers are also required to:

• monitor their drinking water quality

• report drinking water quality incidents to the regulator.


Drinking water quality management plansAll DWQMPs must comply with the requirements detailed in the Act and DWQMP guidelines relating to hazard identification, risk assessment and risk management. These requirements reflect the approach outlined in the Australian drinking water guidelines 2011, which require the provider to identify, assess and manage any risks associated with their drinking water supply and monitor for an appropriate range of water quality parameters to verify that public health is being protected.

As at 30 June 2015, the regulator had approved 83 DWQMPs for the 85 current drinking water service providers. The remaining 2 providers without approved DWQMPs are ‘new’ providers and have registered within the past 12 months.

As a number of providers have had approved DWQMPs in place for some time, the regulator has also assessed and approved amendment applications, either as a result of the regulator-required reviews of the DWQMPs, or as providers make changes to their services. During 2014–15, the regulator had approved 14 amendment applications. By amending their plans, providers ensure that the DWQMP remains current and provides assurance to the regulator that the DWQMP is being implemented.

Drinking water quality incidentsThe regulator works closely with Queensland Health to ensure that drinking water service providers appropriately manage drinking water quality incidents and protect public health.

There have been 1357 drinking water quality incidents reported to the regulator since January 2009. Of these, 148 incidents were reported in 2014–15, with the majority of these incidents relating to detections of Escherichia coli (E. coli). The number and pattern of incidents reported has not significantly changed over time, with a general increase in the number of incidents reported during the wet season. The presence of E. coli in a sample does not necessarily indicate that the water is unsafe; however, it is a trigger for providers to ensure that the water supply system is functioning normally.

Support programsThe regulator has established robust support programs to help providers meet their regulatory responsibilities. Support visits were provided to all medium and small service providers and were extended to large service providers on an as-needs basis. The focus for 2014–15 has been on helping providers implement their DWQMP and educating providers regarding new performance reporting requirements. There continues to be a strong focus on helping Indigenous providers implement their DWQMPs and meet their regulatory requirements.

Coal seam gas waterThe Act was amended on 13 May 2014, with assent on 1 July 2014, to remove the coal seam gas (CSG) water provisions. Prior to this amendment, the Act required CSG companies to hold either an approved CSG recycled water management plan (CSG RWMP) or an approved exclusion decision prior to the commencement of any discharge of CSG water to a water source if a drinking water supply used by a drinking water service provider is downstream of the discharge or the discharge is into the same aquifer the drinking water service provider draws from. Responsibility for the protection of public health has been transferred to EHP.

On 1 July 2015, the transitional period for existing CSG recycled water schemes expired. Any decision made by the regulator to approve a CSG RWMP or an interim CSG RWMP or exclusion decision made under the pre-amended Act no longer continue in effect. In the 2014–15, no applications were received by the department. However, the regulator reviewed 12 monthly reports, 4 quarterly reports and 1 annual report during this period.

Demand managementHistorically during drought periods, the Queensland Government has played a role in setting restrictions for residential and non-residential water users and has also been responsible for providing oversight of various demand management measures.

Currently, powers exist under the Act to enable the government to restrict water supply, implement regulator-directed water restrictions and require water efficiency management plans (WEMPs) should there be a threat to water supply. Guidelines for issuing rate notices and for requiring WEMPs have been developed to enable service providers to implement water efficiency measures. The department also provides information to help promote efficient water use through the Waterwise program.


Performance reportingA major amendment to the Act occurred in 2014, with the introduction of a new reporting framework for key performance indicators. The focus of the regulation of water and sewerage service providers in Queensland is now on outcomes, and the new framework will provide greater transparency and accountability for customers about their services.

Under the new regulatory regime, service providers need to prepare an annual report on their performance against key performance indicators.

All service providers need to consult with their customers to develop an enhanced customer service standard that links to the new key performance indicators. This involves setting target levels of service for a number of the key performance indicators and listing these in their customer service standards. These key performance indicators will measure the customer’s direct experience of the service and will be specified in the notice given by the regulator about performance reports.

All service providers need to publish their customer service standards online and review every five years. Reminders and fact sheets were developed and sent to all service providers.

Penalty infringement notices for service providers and dam ownersOn 1 September 2014, the State Penalties Enforcement Regulation 2014 commenced, which provides the framework for penalty infringement notices. A penalty infringement notice is a fine that can be issued for breaching certain provisions of any Act.

As a result, authorised officers in the department will be able to issue a penalty infringement notice for a range of offences relating to service provider and dam safety obligations under the Act.

Other mattersThe regulator continued to formally register organisations as service providers, as required by the Act.

In 2014–15, 5 new service providers were registered, 3 cancelled and 39 service providers amended their registration details. The number of registered service providers in each of the defined size categories as at 30 June 2015 were:

• small—103

• medium—32

• large—40.

This was a total of 175 registered service providers.

Building partnershipsThe regulator works cooperatively with Queensland Health to ensure the protection of public health through regular consultative practices. Queensland Health accompanies the regulator on service provider support program visits to help service providers meet their regulatory responsibilities with respect to public health.

Under a memorandum of understanding with the Queensland Water Directorate (qldwater), the regulator is committed to the Service Provider Alliances, which support a collaborative regional approach to improve urban water services. The alliances are made up of several service providers that are located in defined regional areas in which they work together to achieve consistency with their regulatory responsibilities.


Appendix 6: Compliance checklist

Table A4: Compliance checklist (2014–15)

Summary of requirement Basis for requirementAnnual report reference

Letter of compliance • A letter of compliance from the accountable officer or statutory body to the relevant minister/s

ARRs— section 8 v

Accessibility • Table of contents

• Glossary

ARRs—section 10.1 iii

92

• Public availability ARRs—section 10.2 Inside front cover

• Interpreter service statement Queensland Government language services policy

ARRs—section 10.3

Inside front cover

• Copyright notice Copyright Act 1968

ARRs—section 10.4

Inside front cover

• Information licensing Queensland Government enterprise architecture—information licensing

ARRs—section 10.5

Inside front cover

General information

• Introductory information ARRs—section 11.1 vi

• Agency role and main functions ARRs—section 11.2 3–6

• Operating environment ARRs—section 11.3 6–7

• Machinery-of-government changes ARRs—section 11.4 N/A

Non-financial performance

• Government’s objectives for the community ARRs—section 12.1 3, 8

• Other whole-of-government plans/specific initiatives

ARRs—section 12.2 8, 9

• Agency objectives and performance indicators ARRs—section 12.3 10–17

• Agency service areas and service standards ARRs—section 12.4 5, 85

Financial performance • Summary of financial performance ARRs—section 13.1 20–21

Governance—management and structure

• Organisational structure ARRs—section 14.1 22

• Executive management ARRs—section 14.2 23–24

• Government bodies (statutory bodies and other entities)

ARRs—section 14.3 82

• Public Sector Ethics Act 1994 Public Sector Ethics Act 1994

ARRs—section 14.4

27

Governance— risk management and accountability

• Risk management ARRs—section 15.1 28

• External scrutiny ARRs—section 15.2 28

• Audit committee ARRs—section 15.3 29

• Internal audit ARRs—section 15.4 30

• Information systems and recordkeeping ARRs—section 15.5 31


Summary of requirement Basis for requirementAnnual report reference

Governance—human resources

• Workforce planning and performance ARRs—section 16.1 32–33

• Early retirement, redundancy and retrenchment Directive no.11/12: early retirement, redundancy and retrenchment

ARRs—section 16.2

33

Open data • Consultancies ARRs—section 17

ARRs—section 34.1

35

• Overseas travel ARRs—section 17

ARRs—section 34.2

35

• Queensland Government language services policy ARRs—section 17

ARRs—section 34.3

35

• Government bodies ARRs—section 17

ARRs—section 34.4

35

Financial statements • Certification of financial statements FAA—section 62

FPMS—sections 42, 43 and 50

ARRs—section 18.1

78

• Independent auditors report FAA—section 62

FPMS—section 50

ARRs—section 18.2

79–80

• Remuneration disclosures Financial reporting requirements for Queensland Government agencies

ARRs—section 18.3

60–62

Notes:

FAA Financial Accountability Act 2009

FPMS Financial and Performance Management Standard 2009

ARRs Annual report requirements for Queensland Government agencies


Abbreviations and glossary

Acronym Definition

Agency A department or a statutory body as defined in the Financial Accountability Act 2009

ARRs Annual report requirements for Queensland Government agencies

COMCAR Branch within the Commonwealth Department of Finance that provides car-with-driver and other ground transport services to the Prime Minister, Governor-General, members of parliament, members of the federal judiciary and international guests of government

CSG Coal seam gas

CSG RWMP Coal seam gas recycled water management plan

DAF Department of Agriculture and Fisheries

DEWS Department of Energy and Water Supply

DEWSLink Staff Culture and Strategy Reference Committee

DNRM Department of Natural Resources and Mines

DWQMP Drinking water quality management plan

eDRMS Electronic Document and Records Management System

EHP Department of Environment and Heritage Protection

EMT Executive Management Team

FAA Financial Accountability Act 2009

FPMS Financial and Performance Management Standard 2009

ICT Information and communications technology

LNG Liquefied natural gas

QAO Queensland Audit Office

QGIAS Queensland Government Internal Audit Service

Queensland Productivity Commission

Provides independent advice on complex economic and regulatory issues, and proposed policy reforms, with the objective of driving economic growth, lifting productivity and improving living standards across Queensland

Referable dam A dam that presents a risk to two or more people if it fails—this does not include dams containing hazardous waste, a weir or large rainwater tanks

RWMP Recycled water management plan

WEMP Water efficiency management plan

Contacts

Head office41 George Street BRISBANE QLD 4000

PostDepartment of Energy and Water Supply PO Box 15456 CITY EAST QLD 4002

Phone13 QGOV (13 74 68)

Annual report enquiriesDepartment of Energy and Water Supply PO Box 15456 CITY EAST QLD 4002

Email: [email protected] Phone: 13 QGOV (13 74 68)

FeedbackFeedback on the annual report can be provided at www.qld.gov.au/annualreportfeedback.

Social media and websitewww.facebook.com/EnergyQld www.facebook.com/WaterQld

www.twitter.com/energyqld www.twitter.com/waterqld

www.dews.qld.gov.au

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