wsaa members meeting update 10 february 2011 perth ross young executive director water services...

WSAA Members Meeting Update

10 February 2011Perth

Ross YoungExecutive Director

Water Services Association Australia

WSAA Structure

Board

Ross YoungExecutive Director

Asset Management Committee

Environment & Sustainability Committee

Water Quality & Health Committee

Amy DoylePersonal Assistant to the

Executive Director

David CoxManager, Technical

Services

Adam LovellManager, Strategy &

Policy

Grant LeslieManager, Business

Services

• Codes

• Metering

• Technical Networks

• Product Appraisals

• Design Assurance

• Asset Management Program

Kristy DrzewuckiProgram Coordinator -

Environment & Sustainability

• Policy analysis & development

• Regulatory issues

• Strategic WSAA programs

• R&D/collaboration

• Financial & risk management

• IT

• Corporate Safety & Wellbeing

• Business processes and policies

• Business development (external sales, tools etc)

• Benchmarking and NPR

• Water industry capability and capacity

Carl RadfordProgram Manager –

Asset Creation

VACANTSydney Administration

Barbara CrawfordManager.,

Communications

VACANTProgram Coordinator -Water Quality & Health

David YatesFinance Administrator

Jaimie HicksProgram Coordinator -

Asset Management

Evelyn RodriguesProgram Coordinator -

Research & Development

Jason RobertsonPortal Administrator

Peter GeeProgram Manager –

Performance Improvement

Danielle RocheProgram Leader – Asset

Management

Mike BusettiProgram Leader -

Metering

Productivity Commission Inquiry

WSAA presented its submission the Productivity Commission public hearing in Canberra on 29 November 2010.

77 submissions have now been received.

Key topics that appear to be interesting to the Productivity Commission include:

Council managed water utilities in regional NSW and QLD

Who makes the key decisions to augment supplies

The relationship between the economic, public health and environmental regulators

Interest in setting up a trial of a competitive framework at the wholesale level

Many submissions promoted scarcity pricing

PC key inquiry dates

Receipt of terms of reference 22 July 2010

Roundtables October 2010

WSAA tour for the PC of Melbourne’s water and wastewater infrastructure

28 October 2010

Due date for submissions 5 November 2010

Initial public hearings November/December 2010

Release of draft report March 2011

Draft report public hearings May 2011

Final report to Government July 2011

Productivity Commission WorkshopInsights into domestic water consumption from merging utility

billing data with Census collection district data

ABS data from 2006 Census.

Includes socio-economic index (SEIFA) compiled by the ABS.

There are four SEIFA and each measures advantage and disadvantage in different ways.

Water utility data from YVW and SEW for 2005-06 and 2009-10.

Preliminary findings On average, water and wastewater bills represent a small

proportion of household income.

Household size and income have significant positive influence on per capita consumption.

The age profile of the household also influences water consumption with households comprising age groups 4 to 19 and 44 to 64 being highest users.

Dwelling type and tenure appear to have limited influence on water consumption.

There appears to be greatest awareness among the more highly educated or skilled of the benefits of conserving water.

Household size is the most influential determinant of household water consumption.

Productivity Commission WorkshopInsights into domestic water consumption from merging utility

billing data with Census collection district data

PC staff presented on models developed for Melbourne and Perth’s water supply systems.

Issues raised at the workshop include: The 10 year period was too short for water planning. Environmental flows and flood protection have been ignored. What happens to carry over storage and in particular evaporation loss? Both models hinge on inflow probabilities on a high, medium and low

range. Scenarios could well be a better approach than using probabilities. It is not clear what problem the models are attempting to address.

Productivity Commission WorkshopModelling framework policy and sensitivity analysis

Engineers Australia (EA) National Infrastructure Report Card

The National Infrastructure Report Card was launched by EA on 24 November 2010 at the National Press Club in Canberra.

WSAA appointed ‘observers’ in each of the State and Territory Report Card processes.

WSAA has concerns about the EA process: Overall water rating was C in 2005 and this rating increased to C+ in 2010.

Potable water was rated B- in 2005 and was also rated B- in 2010 despite over $30 billion being spent on new water sources.

How the State and Territory scores are aggregated at the national level is unclear and a methodology should be made public.

WSAA will be making representations to EA on our concerns

Engineers Australia Infrastructure Report Card

Infrastructure Type

National ACT NSW SA TAS VIC WA

Water overall C+

Potable Water B- B- B- B B- C B-

Wastewater B- C+ C+ B- C B- B

Lowest rating network

RailD+

RailF

RailD-

Stormwater & Local Roads D

RailF

RailD

Telecommunications & Local roads C-

Highest rating network

PortsAirportsPotable waterWastewaterGasB-

Electricity B+

Airports B

Gas B+

Airports B

Airports B

Wastewater B

Future Directions for the Australian Urban Water Sector

NWC Stakeholder Workshop

Aims of the workshop To test the validity of preliminary findings from

the ‘Developing Future Directions for the Urban Water Sector’ Project.

This project seeks to identify the scope of further reforms in the urban water sector.

Assessment of the case for reform

Key proposition 1: There are opportunities for further reform to improve urban water outcomes by:

Addressing shortcomings exposed by drought to meet future challenges

Maximising existing opportunities to empower customers and deliver better services to meet their needs

Key proposition 2: Lack of clarity and agreement about the objectives of the urban water sector and an associated lack of clarity around the boundaries of the sector is the major barrier to change.



Key proposition 3: The Australian urban water sector needs reforms that ensure that:

Objectives are clear and agreed

Institutional roles and responsibilities are clear

Refinements are made to the mix of market, planning and regulatory policy settings to better achieve desired outcomes.

Key proposition 4: There are merits to the national approach to reform but changes to the framework are required to improve its effectiveness.



Suggested objective to “protect public health and safety, provide secure and reliable water services, be environmentally sustainable and achieve economic efficiency”.



Areas of agreement



Security of supply• No policy bans

• Clearer security standards

• Clearer roles

• Implement agreed planning principles

• New risk based assessment tools

Environmental and public health• Full assessment of costs and benefits of IWM and regulation

• Recycling with multi-barrier risk based approach

• Better regulation

• Regional / rural

Aspects of pricing and competition• Third party access

• Cost reflective pricing (e.g. wastewater)

• Independent economic regulation

Areas requiring further analysis Potential for market-oriented approaches and

competition Debate about types of options and benefits

Agreement that: Main benefits are in bulk supply National connected market not possible May be lower hanging fruit in some places Phased implementation is wise More work in detailed design is required



Areas of passionate disagreement Integrated water management, water sensitive

cities, and liveability

Restrictions and technical water use efficiency

The role of pricing

Central planning versus choice and differentiated service offerings



Areas where there was a lack of clarity include:

Sustainability and water sensitive cities

Restrictions and conserving water

The role of pricing



NWC position There are fundamental differences in objectives

and system boundaries whether water conservation is an objective in its own

right

the balance between individual and collective customer needs

how customer service and broader community and environmental outcomes are balanced

the extent to which the urban water industry should be responsible for broader objectives



Key areas for in institutional reform Supply-demand planning and investment

Independent economic regulation

Demand management

Broader sustainability outcomes

Regional urban water in some jurisdictions

Role of government in funding investments



Pricing reform Recommitment to principles of pricing reform

Pricing for efficiency and financial viability Other measures for equity (e.g. CSOs)

Full implementation of agreed and priority reforms Independent economic regulation as prerequisite

Rigid LRMC pricing and IBTs exposed during drought More flexible approaches and flexible regulation? Scope for market price signal for bulk supply



Improved planning

Improved processes and techniques are essential Risk-based portfolio approaches to supply-demand

planning• Extreme variability is business as usual in Australia

Removal of artificial policy barriers

National urban water planning principles supported



Improved water quality and environmental regulation

Principles for better regulation Outcomes not input focused Risk-based Targeted and proportionate to the problem Cost-effective

Regulatory streamlining – (e.g. recycling) A possible case for greater national consistency

Report to be released in late March early April



Other related projects

The Committee for Economic Development of Australia (CEDA) has announced a project titled Australian Water Resources, in partnership with Uniwater and Harvard University.

Ken Matthews is the Chair of the strategy and John Langford and Michael Porter make up the team.

Volume 1 covers how both rural and urban utilities have adapted to scarcity and will be released by June 2011.

Volume 2 looks at optimising institutional arrangements and reform frameworks and scheduled for completion in early 2012.

Infrastructure Australia is currently developing a plan of action in response to PriceWaterhouseCoopers’ Review of urban water security strategies report.

Other related projects (cont.)

Infrastructure Australia released ‘Regional Towns Water Quality and Security Review on 31 January 2011

The key recommendations are:

1. Mandate compliance with Australian Drinking Water Guidelines through legislation or regulation

2. Implement a nationally consistent Best Practice Management Framework for all regional water utilities

3. Move toward more cost reflective pricing water pricing

4. Develop a more highly skilled workforce to operate and maintain water systems in regional water utilities by developing a nationally consistent trade qualification

5. Reform the governance structure of regional water utilities in NSW and Queensland

WSAA ProjectsCapital Prioritisation Guidelines and Principles 18 participants have completed a detailed questionnaire. Several economic regulators have been interviewed. 20 case studies will be developed that identify best practice. A workshop for all participants on 25 February 2011 at Sydney Water. Finalised principles and guidelines are expected by April 2011.

Customer Services Performance Improvement Project Project will commence in August 2011 and completed in December 2011. A consultant will be appointed in late February 2011. All WSAA Members and suitable water utilities world wide will be invited to

participate.

National Performance Report (NPR) NPR is expected to be released in early April 2011. Key areas of focus will include pricing, financial performance, CAPEX and

OPEX and recycling. Format of comparative section of the report to be

improved.

General Update Singapore PUB wish to organise mid year workshops based on topics rather

than individual workshops with each utility. WSAA has committed to assist in organising these workshops.

WSAA has a 1 day stream at OzWater’11: the changing nature of the industry and Cities of the Future are the two key topics.

Sydney Water’s price elasticity of residential demand study is due for release in mid February.

A national smart water meter technology trial strategy proposal has been completed to ensure that meter functionality does not differ apart from the environmental factors such as terrain, meter installation and location.

The WSAA Mutual Aid Guidelines have been invaluable during the recent floods and cyclones on the east coast of Australia. Thanks to all Members of the Water IAAG.

General Update (cont.) Global Water Research Coalition Report ‘Energy Efficiency in the

Water Industry: A Compendium of Best Practice and Case Studies’ has been released outlining how utilities around the globe are becoming more energy efficient. Key conclusion include:

Up to 15% of wastewater energy demand can be offset by biogas generation.

Pumping of drinking water represents 70% of water supply energy demand and at least 30% for wastewater.

Up to 60% of energy demand in wastewater is used in the aeration process.

Energy savings from pumping vary widely but overall savings of between 5 and 30% of current energy demand appear achievable.

Savings arise from improved maintenance and the closer matching of pumps to their duties.

Electronic copies of the report to be distributed to WSAA Members when available.

Cities of the FutureSustainable Population Strategy for Australia

• WSAA providing submission including water/population occasional paper

• 3 panels: Bob Carr, Heather Ridout and Graeme Hugo Infrastructure Australia - Urban Design Protocol

• nationally consistent urban design language and policy framework

• http://www.majorcities.gov.au/discussion_paper Integrated Resource Planning (NWC/ISF)

• Launch March 8 in Canberra by Parliamentary Secretary• Series of road shows around the country

Carbon and Energy Policy, Regulation and Research

Accounting for renewables under NGERS

Scope 1 direct emissions of methane and nitrous oxide

National Carbon Offset Standard

PMSEIC – Challenges at the Energy/Water/Carbon Intersections

CSIRO Water and Energy report Mk II• Based on 09/10 NGERS supplied data; includes

desalination

Carbon and Energy Policy, Regulation and Research

CSIRO Water and Energy report Mk II – early trends• Based on 09/10 NGERS supplied data; includes

desalination; recent water demand figures• In SEQ desalinated and recycled water made up around

10% of the water supplied in 2009/10, with the treatment energy for these ‘rainfall independent’ water sources constituting more than 40% of the total energy for water supply treatment and pumping.

• The utilities in this project serve a population of over 15 million (~70% of total Australian population) and the total utility annual energy demand was 7.6 PJ. In comparison the total Australian domestic annual energy demand is approximately 8,300 PJ.

Carbon and Energy Policy/Regulation Water Industry Guidelines for Energy and GHG reporting

• Urban water industry specific guidance for meeting emissions reporting regulation

• Specialist calculator to be compatible with Fed Gov’s OSCAR

Carbon and Energy Factsheets/Wiki• Plain English fact sheets including glossary• Carbon offsets, renewable energy, NGERS and energy pricing• Now available on WSAA members website

Cost of Carbon Abatement • 13 members with licences; Case study presentation at Ozwater• Occasional paper to be developed

Water Quality IssuesRelease of the Australian Drinking Water Guidelines

• Late February/early March• Probably by Fed Health Minister; in conjunction with

Community Water Planner

Water Treatment Alliance Tools to be released shortly – filtration and disinfection

NWC – Urban water quality regulation

USEPA developments• Fluoride; chromium VI; perchlorate

Research Collaboration Update

International Collaboration Highlights over last 6 months

Improved awareness of use of research• 95 people requested access – increase of 20%• 158 research reports downloaded from WERF

Improved tech transfer• Conference with WateReuse Association in November – 200

attendees from 7 different countries.• 54 staff from 16 members logged onto the WERF 2010

Research Forum• WERF SIMPLE webcast for WSAA members

Influencing the research agenda• WSAA members represented on 5 out of the 6 new WERF

program areas teams

Research Collaboration UpdateCompletion of an R&D survey

• 17 WSAA members completed the survey• Compared R&D expenditure, structure within an organisation

and how costs are measured Additions to the list of WSAA Member projects

• Details of over 400 projects; Available on the Member only section of the WSAA website

Improved communication between Australian Research Funders• CoE (Water Recycling, Desalination), WQRA, UWSRA, Smart

Water Fund with plans to include Goyder• Align planning cycles, work together on common areas of

interest, avoid duplication of researchCentres of Excellence for Desalination and Water Recycling

Questions?

wsaa members meeting update 10 february 2011 perth ross young executive director water services...

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