Last week we talked about the Independent Pricing and Regulatory Tribunal NSW (IPART) Review of Compliance and Enforcement Policy (read the full story here). We mentioned there that a key compliance and enforcement responsibility of IPART relates to Water Industry Competition Act 2006 (WIC Act) licensing.
Today, we look at the upcoming reform of WIC Act licensing contained in the Water Industry Competition Amendment (Review) Act 2014 No 57 (the ‘Amending WIC Act’). This amending Act, while passed into law in 2014, does not come into effect until an associated regulatory framework is ready to be enforced. Last month IPART gave an information session on progress to date, with the scheme intended to come in to effect in 2019.
Today we summarise the key changes introduced in the Amending WIC Act and how its associated framework will impact on water infrastructure providers in New South Wales.
The Amending WIC Act
The Amending WIC Act was introduced as a result of a mandatory five-year review of the WIC Act captured in the ‘Urban Water Regulation Review’ This review pushed for the development of a “regulatory framework that imposes appropriate risk-based requirements, capable of effectively and efficiently protecting public health, the environment and consumers, while minimising regulatory burden on water sector participants.”
The review emphasised the importance of:
- ensuring that recycling schemes include appropriate treatment standards and adequate end-use controls;
- increasing consumer protection, including compulsory assessment of scheme viability from the outset, and providing last resort arrangements in the case of failure;
- better integration of public health, environmental and consumer protection issues in an efficient and effective way;
- reducing red-tape through narrowing the licensing regime to focus on entities providing utility like services and those operating higher risk schemes.
In line with these proposals the Amending WIC Act introduced:
- A narrower scope licensing regime. Specifically, there will be four situations where operators of water industry infrastructure will need a licence:
(1) if providing water or sewerage services to 30 or more small retail customer premises (known as a Category A scheme);
(2) if operating large drinking water facilities (>500 kL/day);
(3) if operating large sewage treatment facilities (>750 kL/day);
(4) if providing other infrastructure as declared by the regulations.
- Bringing metropolitan councils’ operating schemes into the overall framework;
- A new licensing and approvals framework;
- A new compliance framework;
- New operator of last resort provisions.
The NSW Government is currently considering amendments to the Water Industry Competition (General) Regulation 2008 to reflect changes to the Amending WIC Act.
IPART is engaging in ongoing consultation and preparing processes in relation to:
- design approvals
- operational approvals
- new licences
- transitional arrangements for existing WIC Act licence holders, and
- last resort arrangements.
If you think we could be of any assistance in relation to existing, transitional or future licensing processes and exemptions for water infrastructure, please don’t hesitate to get in contact.