This report, which has been prepared by the Centre for International Economics (CIE), examines State Water’s and DNR’s approaches for forecasting consumption in the 2006/07 pricing determination. State Water’s approach involves forecasting consumption as the long run average usage less one standard deviation. DNR, however, has not commented on forecasting methods as it is proposing a fixed charge per unit of entitlement. Submissions on this report must be received by no later than COB 27 March 2006.