queensland water and sewerage service provider ......financial year 2015–2016 june 2017 queensland...

Queensland Water and Sewerage Service Provider Comparative Report 2015–16 1

Department of Energy and Water Supply

Queensland water and sewerage service provider performance comparative report

Financial year 2015–2016

June 2017


CS5300 06/16

This publication has been compiled by Water Supply Regulation, Water Planning and Regulation, Department of Energy and Water Supply

© State of Queensland, 2017

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Summary The Water and Sewerage Service Provider Comparative Report 2015–16 is the second in what will become a series of reports about the performance of water and sewerage providers (providers) in Queensland. Providers submit data to the Department of Energy and Water Supply at the end of each financial year, addressing a series of key performance indicators (KPI). These indicators include metrics for customer service, water security and financial sustainability. The submitted data is used to develop the comparative report and as more data is received each year, the robustness of the report will improve. The purpose of the comparative report is to benchmark providers to encourage voluntary performance improvements where necessary and provide information to customers across Queensland to enable them to compare their provider performance to others around the State. The Water and Sewerage Service Provider Comparative Report 2015-16 (comparative report) is based on data submitted for the 2015–16 financial year and includes some comparison to data from the 2014–15 financial year. Many providers operate a number of ‘schemes’ which together make up the entire water or sewerage service. Most data is reported at the ‘scheme’ level, however, some KPI’s, such as financial indicators, are reported for the entire service. There were 76 providers required to submit a performance report for 2015-16 and these providers operate 265 potable water schemes, 4 non-potable water services, 45 raw-partially treated water schemes, 191 sewerage schemes and 68 recycled water schemes. The types of services offered to customers varies from provider to provider and is influenced by factors such as cost, customer base and remoteness. It is the responsibility of each service provider to determine what areas makes up their various ‘schemes’ however, the majority are reflective of individual townships or communities. A number of key findings have been identified for this comparative report, including issues with the accuracy and completeness of data submitted by some providers. There had however been some improvement in this area as compared to the 2014–15 reporting. We have partnered with providers and industry representatives and undertaken further work to refine and improve the KPI’s. We expect that these refinements will support significant improvements in data accuracy and completeness for future reporting years. Another key finding indicates that, despite a challenging year with drought conditions, providers have performed well over the past 12 months to assure water supply security for their customers. However, contingency supply planning has been identified as a concern as 60 per cent of providers either have no planning in place for their service or failed to provide information about the planning they have undertaken.


Contents Introduction ................................................................................................................................................................... 3 Key findings .................................................................................................................................................................. 3

Data .......................................................................................................................................................................... 3 Overview of Queensland water providers..................................................................................................................... 5 Finance ....................................................................................................................................................................... 13 Water security ............................................................................................................................................................. 16

Water availability during the reporting period ......................................................................................................... 16 Short-term water security outlook ........................................................................................................................... 17 Remaining supply ................................................................................................................................................... 17 Anticipated water demand for the next 12 months ................................................................................................. 17 Capacity to meet the next 12 months’ demand ...................................................................................................... 19

Available contingency supplies ........................................................................................................................... 19 Short-term water security summary ........................................................................................................................ 20 Medium-term water security outlook ....................................................................................................................... 20

Anticipated water demand for the year in five years’ time .................................................................................. 20 Capacity to meet the anticipated 5th year demand ............................................................................................ 22 Planned supply system response ....................................................................................................................... 22

Medium-term water security summary ................................................................................................................... 22 Water restrictions and level of service ................................................................................................................ 22 Duration of water restrictions .............................................................................................................................. 23 Severity of water restrictions............................................................................................................................... 23 Restrictions and use of recycled water ............................................................................................................... 24

Level of service ....................................................................................................................................................... 24 Drinking water quality ................................................................................................................................................. 24 Future reporting .......................................................................................................................................................... 25


Introduction The Queensland water and sewerage service provider performance comparative report financial year 2015–2016 presents a summary of the performance of water and sewerage providers (providers) across Queensland in supplying services to customers. The Department of Energy and Water Supply develops the comparative report based on data extracted from provider’s performance reports. It is a requirement under the Water Supply (Safety and Reliability) Act 2008 that providers submit an annual performance report against specific key performance indicators (KPIs) related to their service size and function. Currently there are 76 providers captured by this requirement. These providers submit data on a range of topics including basic service information, such as length of mains, capacity of water treatment plants, volume of water sourced and produced, daily demand and number of connections, in addition to water security (including capacity to meet demand and contingency supplies), financial sustainability and customer service standards, including billing. This is the second comparative report produced by us. All 76 providers submitted a performance report as required; however, we don’t believe that the quality of the data, as a whole, is accurate or complete enough to provide graphs or commentary for each KPI. The data submitted by providers has not been independently audited and the responsibility for providing accurate data rests with individual providers. In choosing the type of information presented in this report, we considered a number of factors, including current areas of public interest and the availability and accuracy of the data within these areas of interest. Due to the extended drought across much of Queensland and the political and media focus on cost of living pressures for Queenslanders during the reporting year, this year’s report has focused on water security and affordability. It is noted within the report, where there were particular concerns regarding data accuracy and/or completeness, when presenting information for these areas of interest. Further, the availability of only two years of data does not support us to make statements about the sustainability of service providers in supplying water and sewerage services, nor are longer term trends evident in the data at this time. Where possible, comparisons have been made between data provided over the two years and preliminary statements have been made about any differences noted through these comparisons. As more data becomes available and the data integrity improves, future comparative reports will provide comment on the adequacy of the performance of individual providers in terms of service planning, efficiency and financial certainty. Given the great variability of providers across Queensland in terms of location, size and climatic conditions we have chosen to present information in this report in a number of ways using different comparison groups in order to ensure, as much as possible, fair and equitable comparisons.

Key findings Data There were great improvements in the accuracy and completeness of data submitted for the 2015-16 financial year. Concerns remain regarding the overall accuracy of the data reported, however, the volume of missing data was much lower this reporting year and the number and completeness of explanatory comments for missing data substantially improved. The customer and water demand related KPI’s appeared to have the higher number of missing data entries. It is anticipated that the improvements made to the KPI’s for the 2016-17 financial year will support further improvements in data accuracy, however, it will be necessary for providers to continue to consider how they can ensure the accurate collection of the necessary data in a consistent manner. The performance reporting framework is outcome based. Effective outcomes are more likely to be realised as a consequence of effective and purposeful decision-making, rather than random occurrence. Effective decision making is, in turn, reliant on decision makers having access to relevant, comprehensive and accurate information. For some KPIs in particular, it is difficult to have confidence in the data provided this reporting year.


As an example, Table 1 demonstrates the variability in the data reported for the water security KPI's, particularly at scheme level.

QG 2.1 QG 2.4 QG 2.5 QG 2.8

Responding providers (N= 71) 71 71 70 68 Potable water schemes reported 242 258 257 249

Table 1: Respondents for water security KPIs A similar check of data reported for the series of general KPIs found large discrepancies when examining water sourced, water supplied and non-revenue water. The volumes reported for sourcing should roughly balance volumes supplies added to volume of non-revenue water and this was frequently not the case in the reported data. It would also appear that the expected growth across regional Queensland is not well understood by many providers and this is likely to have an impact on planning for service delivery in to the future.

Finance

Consideration of the financial data provided through performance reports has identified two key findings. There are substantial differences in price per kilolitre of water across Queensland (and tariff design), and substantial differences in residential customer usage. However, the data suggests that price has a very weak influence on usage, as there are often wide variances in usage at a given price level but also situations where there is very similar usage across a wide price range. The data particularly suggests that price would be a very inefficient method of influencing usage for providers with low usage – and likely to be unable to reduce consumption below 140kl per household.


Overview of Queensland water providers In Queensland, the majority of providers are local government, with a small percentage of state or privately owned providers. Providers supply a wide range of services, including potable and non-potable water, recycled water and sewerage. Providers own and operate the services they provide and often local circumstances influence the type of services provided. Figure 1 shows the location of the 76 providers captured by the reporting requirement. These 76 providers manage 265 individual potable water services, 4 non-potable water services. Twenty of the 76 providers operate 45 raw-partially treated water services and 73 of the 76 providers operating 191 sewerage services. Twenty-seven of the 76 providers operate 68 recycled water services and 39 of these services are being used for commercial, municipal and industrial supply.

Figure 1 Distribution of service providers across Queensland with the each region highlighted by colour code


There are varying factors and challenges that influence the services offered by providers, including location, climate, weather patterns, access to skilled and experienced staff, population growth and contraction, constrained capital and, in some cases, limited opportunities for economies of scale. These challenges can significantly influence provider performance across a range of indicators. For example, the provision of reasonably priced good quality drinking water is the aim for all providers; however, this can be more difficult and costly for small and/or remote providers or providers with constrained water sources. Some providers have little control over some of these factors and these challenges must be taken into account when considering this report. For this comparative report, providers have been aligned to seven regionally based groupings for the purpose of comparisons. These groupings, detailed in Table 2, were established using a broad set of characteristics to enable comparisons that are more meaningful. There are some instances within the report however, where different groupings have been used for comparisons, or where the entire 76 providers have been compared where appropriate. We will continue to further define the comparison groups for future years.

Far North Queensland North Queensland

Aurukun Shire Council Mapoon Aboriginal Shire Council Burdekin Shire Council Mt Isa City Council

Burke Shire Council Mareeba Shire Council Charters Towers Regional Council Mount Isa Water Board

Cairns Regional Council Mornington Shire Council Cloncurry Shire Council Palm Island Aboriginal Shire Council

Carpentaria Shire Council

Napranum Aboriginal Shire Council Flinders Shire Council Richmond Shire Council

Cassowary Coast Regional Council

Northern Peninsula Area Regional Council Hinchinbrook Shire Council Townsville City Council

Cook Shire Council Pormpuraaw Aboriginal Shire Council McKinlay Shire Council

Croydon Shire Council RTA Weipa Pty Ltd Darling Downs South West Doomadgee Aboriginal Shire Council Tablelands Regional Council Bulloo Shire Council Quilpie Shire Council

Douglas Shire Council

State of Queensland - Department of Infrastructure, Local Government and Planning

Goondiwindi Regional Council Southern Downs Regional Council

Etheridge Shire Council Torres Shire Council Maranoa Regional Council Toowoomba Regional Council Hope Vale Aboriginal Shire Council

Torres Strait Island Regional Council Murweh Shire Council Western Downs Regional

Council Kowanyama Aboriginal Shire Council

Wujal Wujal Aboriginal Shire Council Paroo Shire Council

Lockhart River Aboriginal Shire Council

Yarrabah Aboriginal Shire Council Mackay, Isaac and Whitsunday

Central Isaac Regional Council Whitsunday Regional Council

Aurizon Operations Ltd Diamantina Shire Council Mackay Regional Council

Banana Shire Council Gladstone Area Water Board Wide Bay Burnett Barcaldine Regional Council Gladstone Regional Council Bundaberg Regional Council North Burnett Regional Council

Barcoo Shire Council Livingstone Shire Council Cherbourg Aboriginal Shire Council

South Burnett Regional Council

Blackall-Tambo Regional Council Longreach Regional Council Gympie Regional Council Wide Bay Water

Boulia Shire Council Rockhampton Regional Council South East Queensland

Central Highlands Regional Council Winton Shire Council

Central SEQ Distributor-Retailer Authority trading as Urban Utilities

Gold Coast City Council

Woorabinda Aboriginal Shire Council

Northern SEQ Distributor-Retailer Authority trading as Unitywater

Logan City Council

Queensland Bulk Water Supply Authority Redland City Council

Table 2: The providers within each of the seven groups of providers used when making comparisons for this report


A number of KPIs are concerned with collecting data on general service delivery across Queensland, including but not limited to:

• infrastructure for providing water or sewerage services (treatment plants, available storage, pipework)

• volumes of water sourced by providers from rivers, dams, bores, desalination, recycled water)

• numbers of properties serviced

• volume of water supplied to properties.

The data provided for these KPIs provides an interesting overview of water and sewerage services, but is also useful in combination with other KPI’s when considering financial sustainability and the availability and management of water to meet customers’ needs (water security). Across Queensland in 2015-16, sewerage services were supplied to 2 175 000 residential properties and 203 000 non-residential properties. The infrastructure providing these services includes 251 sewerage treatment plants and 33 936 km of pipework. Comparing to the data provided for the 2014-15 financial year, there are 673 114 more residential properties connected to sewer and 18 913 less non-residential properties serviced. There are an additional 35 sewerage treatment plants and an extra 11 200 km of mains as compared to the data reported in 2014-15. This data, if reported accurately over the past two reporting years, indicates a substantial investment in sewerage infrastructure and a large increase overall in the number of customers provided with a sewerage service across Queensland. With regards to water services in Queensland: • The volume of water sourced from surface supplies (lakes, rivers, dams) and the volume of water sourced from

ground water supplies (bores, aquifers) was 495 515 megalitres (ML) and 51 287 ML respectively. This represents a slight decrease of water sourced from both surface and ground supplies (between 1 and 2%) as compared to last year’s reporting and demonstrates the reliance of customers on the availability of surface supplies, which are generally more affected by conditions such as drought or heavy rainfall events.

• 2053ML of water is sourced through desalination of marine water. This was an increase of 43.4% compared to

the previous year’s reporting mainly due to the implementation of desalination by Torres Strait Island Regional Council.

• Figures 2 and 3 provide information on the percentage change in total volume of water sourced for each

service provider. Figure 2 shows which providers have increased the volume water they source while Figure 3 demonstrates which providers sourced less water as compared to their 2014-15 reported data.

• The volume of drinking water produced by all water treatment plants across Queensland was 568 119 ML

which represents a stable volume (increase of approximately 1%) compared to last year’s reporting. • 48 660 ML of recycled water is supplied to properties from 68 recycled water schemes located across

Queensland. Figure 4 shows the location of these recycled water schemes. The volume of recycled water reported represents a 30% increase compared to last year’s reporting and represents 12% of the volume of water supplied to non-residential connections.

• 576 782ML of all water sourced by providers was used for potable supply (residential and non-residential). Of

this volume, 299 788ML was sourced by Seqwater for eventual supply for South East Queensland customers, and the remaining 276 994ML was sourced by all other providers outside of SEQ. This represents a slight (0.6%) decrease in the volume sourced for potable supply, as compared to last year’s reporting.

• 346 000ML of water was provided to 2 747 000 residential properties connected to a water supply. As

compared to the 2014-15 data, there was a very slight decrease in the volume of water supplied however, the number of properties supplied increased by almost 1 million connections. The changes in these figures are likely to represent more accurate data collection for 2015-16 rather than an unreasonably significant reduction in water usage in light of substantial increase in connected properties. Figure 5 provides information on the percentage change in water supplied for residential purposes for each service provider.


• 66 369ML of water was calculated to be ‘non-revenue water’ (leakage within the system, firefighting, burst pipes etc.). This is an increase in volume of almost 18 000ML compared to the previous years’ data, however, when looking at overall water volumes, the percentage of non-revenue water is similar than that reported in 2014-15 and sits at approximately 10%, as seen in Figure 6.

• A cross check of the data reported across the volume sourced, the volumes supplied to residential and non-

residential use, and non-revenue water volumes has, however, revealed the accuracy of some reported data is questionable. Around half of the providers reported data that show clear discrepancies between the total volume sourced and how this water was distributed. One third of providers reported a discrepancy of more than 34%. These cross-check data are displayed in Figures 7, 8 and 9, with providers grouped according to the volume sourced.


Figure 2 Percentage increase in the volume of water sources by service provides for 2015-16 as compared to the volumes reported for 2014-15, colour coded by region

Figure 3 Percentage decrease in the volume of water sourced by providers for 2015-16 as compared to the volumes reported for 2014-15, colour coded by region


Figure 4 Location and size, by volume supplied, of recycled water schemes across Queensland, colour coded by region

Figure 5 Percentage change in the volume of water supplied to residential connections by each service provider based on data reported from 2014–15 to 2015–16


Figure 6 Volume of water supplied to residential and non-residential connections and volume of non-revenue water expressed as a percentage of the total water supplied

Figure 7 Water sourced and distributed 2015-16 – Providers that source less than 1000 megalitres per annum


Figure 8 Water sourced and distributed 2015-16 – Providers that source from 1000 megalitres per annum to 9 999 megalitres per annum

Figure 9 Water sourced and distributed 2015-16 – Providers that source 10 000 megalitres and over per annum

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Finance For this year’s report, the focus is on pricing and affordability. Providers submit data on their annual water and sewerage bill based on 200KL of consumption. As service providers use many different billing models, collecting information based on a standardised level of consumption enables a comparison of billing across Queensland. The chart below (Figure 10) shows the average annual consumption for residential connections in each providers area (in kilolitres) plotted against a notional price (what a household would pay if they used 200 kilolitres per annum in that council area). The chart shows that there is at best a very loose relationship between price and water use. Far western councils, in the main, use more water than coastal councils do. As outdoor water use is generally the greatest influence on household demand, that probably reflects the greater rainfall that gardens receive on the coast, but evaporative air-cooling systems are also considered a significant source of household demand in western Queensland. As an example of the limited influence of price alone, Mt Isa has the highest bill for 200kl consumption, but is toward the higher end of consumption. Figure 11 is a subset of the same chart, but restricted to councils consuming less than 800kl per annum to remove some of the outliers and allow more detail to be seen in the cluster of councils around 400kl consumption. Figure 12 is a further zoomed version showing that there is a clear lower limit to household consumption, with no provider reporting residential consumption less than 120Kl per household per year, and most of the SEQ providers reporting consumption around 150Kl per year. But consumption can vary widely despite very similar prices for instance, South Burnett has the lowest residential consumption at 124Kl per household, but charges a similar price for 200Kl consumption ($1450) to Gladstone which has consumption of 243Kl, and Townsville ($1498) with consumption at 369Kl.

Figure 10 Annual bill based on 200KL compared to consumption per connection


Figure 11 Typical bill vs residential usage

Figure 12 Typical bill vs residential usage


Figure 13 below plots the typical household water and sewerage bill (actual average consumption for the council) against 2011 median household income data (sourced from the 2011 census in 2011 dollars). This shows that there is little relationship between capacity to pay and water and sewerage bill size for most providers, although the providers with higher income resource towns tend to have higher bills.

Figure 13 Median Household income compared to the typical residential water and sewerage bill Figure 14 illustrates the reliance on water and sewerage revenue for each provider as a proportion of overall rates and utility revenues to show how much of providers’ income from its own ratepayers comes from water and sewerage compared to general rates and other charges. In general, water and sewerage revenue is around a third of overall revenue (median 34%), but for the larger councils it is often much higher. Townsville is the highest with slightly over half of council’s revenue from the population coming from water and sewerage charges. This does not include Financial Assistance Grants or other forms of grants that form a large proportion of revenue for many councils outside SEQ. Where the council purchases bulk water from a state owned entity such as Seqwater or Gladstone Area Water Board, a significant proportion of this revenue will be offset by payments to the bulk water supplier.

Figure 14 Water and sewerage revenue as a proportion of net rates and utility revenue


Water security Safe, secure and affordable water supplies are essential for social well-being and economic growth. Being responsive to population growth, economic development and climatic variability in Queensland, service providers must commit to long-term planning to ensure the ongoing continuity of their supplies to customers. Water planning is an activity that generally occurs out of public sight and mind. The water security KPIs allow service providers to communicate valuable information about their supply planning, including their insights on water availability and water demand over short- and medium-term outlooks. In this section, water security data is discussed around four main areas:

• a summary of the prevailing climatic conditions

• analyses of the short-term and medium-term water security outlooks

• water restrictions and level of service. Not all service providers were required to report against water security KPIs this year. For example, water security arrangements for providers in South East Queensland are managed by Seqwater under the SEQ water security program which is not reported through KPIs. However, some attempt has been made to integrate water security information from the SEQ program into this section in order to provide a whole of Queensland overview. Additionally, information used for this section was sourced from the comments made by providers against water security KPI’s, aggregating reported scheme data to obtain whole of provider information and disaggregating whole of service data into schemes where possible and necessary. This accounts for the differing numbers of providers and schemes within this section. Seventy-five service providers reported water security data, including data for SEQ, for a total of 308 separate schemes comprised of 259 potable water schemes, 45 raw or partially-treated water schemes, and 4 non-potable water schemes. While recognising that not all Queensland communities are serviced with potable water schemes, this section focuses on potable water schemes. Water availability during the reporting period The climate is changing across Queensland. Average temperatures across the state are currently 1°C higher than they were 100 years ago and modelling shows this is set to continue and weather patterns are likely to change.1 These changes will impact on water security both in terms of diminished water availability and increasing demand of water resources. It makes sense to take appropriate action to better manage these climate-related risks through cohesive supply, demand and contingency planning. Climate variability places continual pressure on service providers to ensure water supply security for their customers. Across Queensland, 2012 was the latest of six consecutive years of above average statewide rainfall including, in 2010, the highest January to December rainfall over the past 115 years. Three consecutive years of below average rainfall followed in 2013-2015, while 2016 brought droughts and flooding rains – depending on location. The Bureau of Meteorology reports that rainfall in 2016 was well above average in western Queensland and above average in central and southern districts. Extensive flooding occurred in catchments in the Gulf Country, Central West, Channel Country and parts of the Maranoa and Warrego in January, and from June to September in western, central and southern Queensland. Rain came non-seasonally. Across Queensland, winter was very wet, in fact the second wettest on record for Queensland, the wettest since 1912, and the wettest May to September on record. Conversely, parts of the Gulf Country, Cape York Peninsula, north tropical coast and areas of southeast Queensland recorded below average annual rainfall, driven in part by a dry start to the year in the southeast and far north, particularly from January to April. Some areas have experienced several consecutive failed wet seasons. 1 For more information visit the Australian Government Climate Change or Queensland Government Environment websites.


Mean maximum and mean minimum temperatures for 2016 were both above average for the State. Temperatures were very warm in the first part of the year, particularly from February to May. At December 2016, 86% of the state was drought declared. The Queensland Government’s Long Paddock website provides mapping of the drought situation in Queensland for each month of the reporting year. In the context of this variable and challenging climate, Queensland’s service providers have performed well to ensure a secure water supply outlook. Short-term water security outlook Short-term water security, that is, water security over the coming 12 months, is assessed through four KPIs that provide data on the remaining supply at the time of reporting, the anticipated water demand and capacity to meet that demand for the next 12 months and the available contingency supplies. Seventy-five providers, including data from SEQ, reported water security data for up to 259 potable water schemes. Additionally, 54 providers aggregated their scheme data in order to report results at service provider level. Remaining supply The assessment of water availability is designed to capture water ‘on hand’ in storages, and so excludes anticipated rainfall and water not yet produced by desalination, for example. Consequently, it is important to recognise that not having water in storage is not an indicator that a service provider will not be able to meet customer demand through other means of supply. Seventy-one providers reported on 249 potable water schemes. Of those reported, 88% of schemes had at least 12 months’ supply remaining, 7% of schemes had fewer than 12 months’ supply remaining, and 5% provided no response. Across all of the schemes for which responses were received, the mean volume of available supply reported was 25 months. Forty-nine of the 71 providers aggregated scheme data to whole of service provider level. Ninety-eight percent of these providers had at least 12 months’ supply remaining, with only one service provider reporting fewer than 12 months’ supply remaining. The mean volume of available supply reported was 20 months. The KPI requests providers to indicate the number of months of supply they have on hand. Observations of the data and feedback subsequently sought from providers suggests, that rather than calculate the total months of supply remaining, a large majority of providers gave a response that indicated a ‘sufficiency of supply’. For example, around one third of schemes were reported to have exactly 12 months’ supply remaining, while others responded in terms of having two, three, five years’ supply on hand, or ‘unlimited’ supplies. Anticipated water demand for the next 12 months Forecasting for the next twelve months for the respective schemes and understanding future demand should be an explicit aspect of supply planning. When anticipating water demand for the coming year a service provider may only identify minimal changes from the total volume of water it sourced in the current year. Alternatively, new developments may result in temporary or permanent demand increases. Seventy-one providers reported on 258 schemes. Of the 258 potable water schemes for which forecast demand data was received, the mean forecast demand for 2016-17 was 2 390 megalitres across regional Queensland (i.e. excluding SEQ data). When aggregated to service provider level, the mean forecast demand for 2016-17 across regional Queensland was 6 117 ML (or 11 932 ML including SEQ) and the median 2 356 ML (or 2 396 ML including SEQ). Median demand forecast means that half the water providers reported a higher demand forecast, and the other half reported a lower demand forecast. The difference between the mean and median forecasts reflects that Queensland has a large number of smaller schemes and a small number of quite large schemes. Total forecast demand for 2016-17 across these schemes is 616 784 ML. This comprises forecast demand of 325 933 ML for south-east Queensland (53% of forecast statewide demand) and 290 851 ML outside SEQ (47% of forecast demand). The 2016-17 forecast represents a 4.3% reduction in reported demand from that in 2015-16, with SEQ reporting an increase of 4.1% and regional Queensland providers reporting a net decrease


of 11.4%. Figures 15, 16 and 17 show the reported demand for 2015-16 and the forecast demand for 2016-17 grouped according to sourced volumes. These graphs demonstrate that some providers have large unexplained differences between the volumes reported for both years. Sixty per cent of providers forecast a reduction (average 20.5%) of their total water demand, 36% of providers forecast an increase (average 14%) in total water demand and 4% forecast no change. Across regional Queensland (excluding Seqwater), providers who responded to this item reported an annual water demand forecast for 2016-17 that was an average of 12% lower than the total volume of water they sourced in 2015-16. Data also indicates that about one third of providers report an expected annual change (increase or decrease) in the total volume that they will require of more than 24%. In 2014–15 providers predicted demands for 2015–16 that were, on average, 2.9% higher than the volume that they ultimately sourced and reported in 2015–16. By itself this is not remarkable, however, the 2014–15 estimates ranged from an underestimate at 6% of the next year’s actual demand to overestimate at more than 270% of the next year’s actual demand. Standard deviation of the error between the two years was 34.1%. This means that one third of providers were more than 34% off in their demand estimates from one year to the next.

Figure 15 Total demand reported for 2015-16 and estimated for 2016-17 for providers that source less than 1000 megalitres per annum

Figure 16 Total demand reported for 2015-16 and estimated for 2016-17 for providers that source from 1000 to 9999 megalitres per annum

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Figure 17 Total demand reported for 2015–16 and estimated for 2016–17 for providers that source 10000 megalitres and over per annum Capacity to meet the next 12 months’ demand Where a service provider reported that they had less than 12 months’ water supply remaining as at June 30, additional information is required to describe the capacity of the service provider to meet demand over the next 12 months. 59 providers reported that they would be able to meet their next 12 months’ demand across 189 potable water schemes. There were only six schemes where it was reported that the service provider would not be able to meet demand, Torres Strait Island Regional Council operates five of these schemes. Council is actively working towards managing this issue. Otherwise, Queensland’s registered providers reported no short-term supply shortfall against 98% of potable water schemes. Available contingency supplies The requirement to complete the KPI on available contingency supplies is formally triggered when less than six months’ supply are held in storage for a given scheme. Nonetheless, many providers voluntarily nominated to provide data on their contingency supply options and these are displayed in Figure 18.

Figure 18 Contingency supply options reported for potable water schemes (2015–16)

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28 service providers reported contingencies

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schemes

27 service provider gave no response


Short-term water security summary The reported short-term water security data indicate the large majority of Queensland’s water providers have performed admirably in challenging climatic circumstances. Providers are commended for ensuring 88% of schemes have at least 12 months’ supply remaining, and that 98% of schemes are expected to meet customers’ water needs over the coming 12 months. However, given the widely reported declines in demand for the 2016-17 water year, it may be worthwhile for providers to re-examine their methods to forecast supply and demand estimates. As part of this consideration, providers should respond to with their best estimate of the actual number of months of supply on hand. Providers should also consider cross-referencing their responses about expected future water demand with the volumes they report for other KPI’s seeking source and supply data. Including the total volume of water they sourced, and the volumes they supplied for residential use, commercial, municipal and industrial use, and non-revenue water losses, bearing in mind that this year’s water demand is used as the basis for the forecast for next year’s total demand or water sourced. Medium-term water security outlook Medium-term water security, that is a water security outlook with a five-year horizon, is similarly assessed through anticipated water demand for the year in five years’ time, capacity to meet next 5th year demand and planned supply system response 54 providers aggregated their scheme data in order to report results at WSP level. This section focuses on the provision of potable water services. Anticipated water demand for the year in five years’ time Forecasting a total volume to be sourced for the fifth year out from the current reporting year is more complicated than for the coming year. The factors and principles to be considered are the same—though actualities are more susceptible to potential variation. Responses were received from 70 providers across 257 potable water schemes. These data included forecast demand in south-east Queensland reported by Seqwater (which provides bulk water to the SEQ providers). Queensland’s providers are forecast to source a total of 737 827 ML of water in 2020-21. Of this estimate, 670 321 ML (91%) is associated with potable water schemes. Data suggests that the median forecast demand for a potable water scheme in 2020-21 is 140 ML and the average (mean) forecast demand is 2 608 ML. Forty-four percent of potable water schemes are reportedly expected to source less than 100 ML to meet demand in 2020-21 and 75% of potable water schemes to source less than 500 ML. Aggregated to service provider level, the median service provider forecast is for a requirement to source 2460 ML in 2020-21 and the average, 12 935 ML. Figures 19, 20 and 21 show the reported demand for 2015-16 and the forecast demand for 2020-21 grouped according to sourced volumes. Forty seven percent of providers forecast a reduction (average 4%) of their total water demand, 51% of providers forecast an increase (average 4.7%) in total water demand and 2% forecast no change. The standard deviation for the annual percentage change between the current and 5th year volumes reported for these two years is 7.0%. This means that about one third of providers report an expected annual change in the total volume that they will require of more than 7%. Across Queensland, the 2020–21 demand forecast reported represents an annual increase in demand of 0.7% from the current year. Once again, this forecast demand growth is driven by SEQ which posted a mean annual increase of 3.2% in bulk water demand, while regional Queensland providers reported a mean annual decrease of 1.3%.


Figure 19 Total demand reported for 2015–16 and estimated for 2020–21 for providers that source less than 1000 megalitres per annum

Figure 20 Total demand reported for 2015–16 and estimated for 2020–21 for providers that source from 1000 to 9999 megalitres per annum

Figure 21 Total demand reported for 2015–16 and estimated for 2020–21 for providers’ that currently source 10 000 megalitres and over per annum

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Capacity to meet the anticipated 5th year demand Seventy-one providers responded to this item across 258 schemes. Ninety percent of providers reported that they expect to have the capacity to meet demand in five years’ time. Six providers (8.6%) reported that all of their supply schemes were expected to face water supply shortfall in (or by) 2020-21 and the Regulator continues to work closely with these providers. An additional service provider reported that two of its seven supply schemes were expected to face a water supply shortfall in (or by) 2020-21 and this service provider has been identified to potentially participate in a Regional Water Supply Security Assessment with us. Planned supply system response The requirement to complete this KPI is formally triggered when a service provider considers that it will not be able to meet the 5th year demand forecast. Nonetheless, many providers voluntarily nominated to provide data on their future supply options and these are displayed in Figure 22.

Figure 22 Future supply options reported for potable water schemes (2015–16) Future supply options are somewhat distinct from the contingency supplies. Contingency supplies are used to meet a short-term supply shortfall, whereas future supply options are responses to longer-term trends, such as sustained growth in demand, the potential impacts of climate variability and the intention to roll out more information on community consultation and setting the level of service standards for bulk supply. Responses to the KPI on anticipated water demand in five years’ time were of uncertain quality. When providers better consider the factors contributing to their 5th year forecast there may be a more obvious need to also consider their future supply options. Medium-term water security summary The reported data indicate that some of Queensland’s water providers should probably reconsider some of the factors that drive their medium-term planning. For many providers, the reported annual percentage change in the volume of water they expect to source to meet customer demands is within probable bounds. However, one third of service providers report an expected annual change in the total volume that they will require of more than 7%. This may be excessive and inconsistent with recognised drivers of growth. Water restrictions and level of service Water restrictions are an accepted and economically efficient way of managing supply continuity at times of water scarcity and of achieving affordable supply security. The effectiveness of water restrictions in moderating demand can be understood in terms of three dimensions: frequency, severity, and duration.

16 service providers reported future option for

all schemes

2 service provider reported future

option for at least one scheme

16 service provider reported no future

option for any schemes

44 service provider offered No response


The frequency of a water restriction refers to the number of times that the water restriction occurs in a given period, or to the average recurrence interval with which it is expected to occur. The severity of a water restriction is typically expressed in terms of escalating ‘levels’ of restriction. Although water restrictions are often described in terms that make sense to households; for example garden watering is restricted to odd numbered households on particular days, providers should understand (and therefore construct) these levels of restrictions in terms of the demand reduction each is expected (or targeted) to achieve. Data were received from 75 of 76 providers for 263 of 264 potable water schemes including responses from SEQ providers. Duration of water restrictions The duration of a water restriction describes how long the restriction is imposed for. Data were received from 68 providers for 249 potable water schemes in the 2015-16 reporting year. Forty-nine providers reported that 187 schemes (71%) had no water restrictions in place, noting that permanent water conservation measures are not considered water restrictions. Figure 23 shows the 62 potable water schemes (23.6% of responses) that were reported as restricted for some portion of the year, including the 26 schemes (9.9% of responses) reported as restricted for the entire year. The mean duration of restrictions across these schemes was 9.8 months.

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Figure 23 Duration of restriction for restricted potable water schemes (2015–16) Because of the diversity and size of the areas serviced by some providers, and their reliance on different bulk water sources, 2015-16 returns included advice from some providers that they operated unrestricted schemes at the same time that they had restricted other schemes. Severity of water restrictions Of the data received from 41 providers for 115 potable water schemes in the 2015-16 reporting year, 25 providers reported that 48 schemes had water restrictions in place in the 2015-16 reporting year. Due to problems with the definition, mean severity of restrictions is not able to be reported in 2015-16. The number of schemes reported as restricted in this KPI is less than the number of schemes reported as restricted in the previous KPI. Cross-tabulating the data in both responses, a combined list was generated, for which 28 providers reported on 62 restricted potable water schemes. This simple cross-check shows that reporting against QG2.9 is incomplete. A number of communities appear to have observed severe restrictions in the past 12 months. Alternative sources may be required to supplement the water supplies for these communities to avoid social and economic hardship.


Restrictions and use of recycled water Figure 24 shows the overlap between providers with a recycled water program and providers that imposed restrictions in 2015-16. Of those that reported, seventy-seven percent of providers that reported recycled water programs also reported they did not impose restrictions in 2015-16. Seventy-nine percent of providers that reported imposing restrictions in 2015-16 did not have an active recycled water program. Thirty-four percent of providers failed to report on one or both these measures.

Figure 24 Percentage of providers with recycled water programs and water restriction programs Level of service The frequency, severity and duration dimensions of water restrictions are part of a larger water supply picture. Other significant parts of this picture include the unrestricted volume that a service provider ‘budgets’ for consumptive use and the amounts it charges consumers for access to and use of the water supply. These are central elements that contribute to the provider’s bulk water level of service (LOS) considerations. Like the Series 4 (customer) KPIs, LOS and Customer Service Standards (CSS) both address issues of continuity of supply to customers (among other things). However, CSS addresses continuity of supply in a context of treatment, reticulation and maintenance, whereas LOS addresses continuity of supply in terms of the cost of assuring bulk water availability. Like any budget, it requires balancing: if customers pay more than they can reasonably expect to receive more – or if they prefer to pay less, they should expect to receive a diminished service. Getting the balance ‘right’ across all these factors (unrestricted volume, frequency, severity and duration of restrictions, and cost of service) is not a ‘one right answer’ problem. Therefore, Level of Service standards should emerge from discussion and engagement between providers and their customers. Simply presuming the standards that should be targeted can result in a supply arrangement that is no one’s first choice, and which may place avoidable burdens on the provider and/or some or all of its serviced community.

Drinking water quality This is the first year that drinking water quality information has been included in the comparative report. Whilst there are no dedicated KPI’s for drinking water quality, this information is collected by us through other regulatory processes, such as annual reporting and incident reporting from providers. The decision to not include dedicated KPI’s for drinking water quality was made in consideration of the additional reporting burden this would place on providers, however, it was intended that drinking water quality information would be included in the comparative report. The information provided in this report is taken from mandatory drinking water quality incident reporting information. Figure 25 provides a summary of the number and type of incidents reported each month for the 2015–16 reporting year. The most commonly reported incident is the detection of Escherichia coli (E. coli) in treated drinking water; however, this is also the most commonly tested parameter across all providers.

Recycled water program and no restrictions 27%

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restrictions

8%

No recycled water program but with water restrictions 31%

Failed to report on either the recycled water program or

restriction program

34%


The detection of E. coli indicates faecal contamination of the water supply. The presence of E. coli in does not necessarily indicate that the drinking water is unsafe, however, it is a trigger for the provider to check that the water supply system is working properly. In general, more incidents are reported for drinking water sourced from surface supplies (rivers, dams, lakes) and during the warmer months and/ or when rainfall events are more frequent. Rainfall events and flooding cause a disturbance in the surface source supplies, which in turn, increases the difficulty in treating these supplies to an appropriate water quality standard. There are a number of areas across Queensland where surface supply disturbance due to rainfall events occurs each year and the subsequent treatment of the drinking water supply during these events is unable to adequately treat the drinking water supply to a suitable standard. As an emergency measure, these situations often result in ‘boil water alerts’ being issued to the community, however, it is expected that, where these circumstances prevail, providers are considering more sustainable, longer term solutions to ensure customer health is protected.

Figure 25 Type and number of drinking water quality incidents reported by month for the 2015-16 reporting year.

Future reporting A review of the data collected in the first year or reporting (2014–15) and further discussions with providers indicated that a number of the KPI’s were difficult to interpret or provided ‘nonsense’ data. Consequently, we established a Performance Reporting Steering Committee to assist with the review and amendment, where necessary, to KPI’s or the explanatory information. The committee included representatives from the department, the Queensland Water Directorate (Qldwater) and the following providers:

• Barcoo Shire Council • Mount Isa Regional Council • Cairns Regional Council • Queensland Urban Utilities • Charters Towers Regional Council • Seqwater • Gold Coast City Council • Toowoomba Regional Council • Gympie Regional Council • Townsville City Council • Mackay City Council • Wujal Wujal Aboriginal Shire Council

The goal of the steering committee was to facilitate a better understanding of KPIs, and address any anomalies between the National Performance Reporting Indicators and Queensland Government KPIs. It is hoped that the outcomes achieved by the steering committee will significantly reduce the time and effort needed by providers to produce and submit their required data, and improve the quality and reliability of that data.

queensland water and sewerage service provider ......financial year 2015–2016 june 2017 queensland...

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