New requirements for WICA utilities to publish prices
1 Purpose of this information
This fact sheet is intended to provide guidance on the requirement to publish 4-years of standard contract charge pricing and notify customers of variations to these prices for private water utilities (WICA utilities) licensed under the Water Industry Competition Act 2006 (WIC Act).
2 WICA utilities have new requirements to publish prices
The amended WIC Act introduced new requirements for WICA utilities to publish and notify customers and IPART of certain charges and changes to charges.
2.1 Requirement to publish and notify IPART of standard contract charges
The amended WIC Act introduced new requirements for licensees to publish and notify IPART of standard contract charges. Licensees must publish these charges on their website for the current financial year and subsequent 3 financial years, including the date from which any varied charges apply.
Licensees must also notify IPART of the publication of standard contract charges through WILMA and re-notify each time the published charges are updated or varied. Figure 1 outlines the requirements for standard contract charges.
To comply with this requirement, a licensee needs to update and notify IPART of published charges at least annually (unless a licensee publishes more than 4 years of charges at a time). A licensee will become non-compliant with the WIC Act from the start of a new financial year if the charges for the new fourth financial year have not been published and notified to IPART.
Additional charges (non-standard contract fees), which can include indicative amounts or maximum fees, do not need to be notified to IPART. However, a licensee is still required to make information about these additional charges easily accessible on its website. Figure 1 outlines the requirements for additional charges.
Additionally, licensees are required to publish any rebates, refunds, discounts or similar payments available to customers for the current financial year.
Figure 1 Requirements for standard contract charges and additional charges
2.2 Requirement to notify IPART and customers of variations to published prices
Licensees are required to notify IPART of any variations to published prices for standard contract charges, including the reason for the variation, prior to the variation taking effect.
A licensee must also provide at least 3 months’ written notice to customers of certain increases to published prices for standard contract charges, unless IPART approves a shorter notice period. This notice can be provided to customers in a statement of account or on a bill requiring payment.
The following price increases are exempt from the requirement to notify customers:
- consumer price index (CPI) increases (see section 2.2.1)
- public water utility prices for comparable services (see sections 2.2.1 and 2.2.2)
- prices set by a monopoly declaration determination by IPART (see section 2.2.1).
A licensee can also apply to IPART for a shorter notice period for an increase. IPART will review applications for a shorter notice period on a case-by-case basis. IPART can approve a shorter period of notice to customers on an ongoing or one-off basis.
The WIC Act requires a licensee to publish, on its website, the date from which any variation to charges applies. The licensee must also publish the new price.
While the legislation is not specific, IPART considers that this 3-month period is calculated from the date the customer begins incurring the new charge, rather than from when a charge is to be invoiced or the invoice is payable. For example, if a licensee intends to increase the price of a standard contract charge starting 1 September, they will have to provide their customers with written notice of the changed price on or before 1 July (3 months prior). When increasing prices by CPI, licensees must use the most recently published quarterly All Groups Index for Sydney, published by the Australian Bureau of Statistics (ABS).
2.2.1 Exemptions to these requirements
Consumer price index increases
A licensee is not required to provide notice of a pricing increase payable by a customer if the increase is less than the most recently published quarterly CPI rate by the ABS at the time the new price applies from. For example, if a licensee intends to increase their prices by CPI from 15 August, they would apply the CPI rate from the published June quarter as it would be the most recently published quarterly rate.
Policy of maintaining price parity with a regulated public water utility for comparable services
A ‘regulated price parity arrangement’ is when a WICA licensee has a policy of matching their standard contract charges with the pricing of a comparable service of a public water utility whose services are subject to price determinations by IPART. A licensee is not required to provide notice of a pricing increase payable by the customer if the price increase does not exceed the relevant IPART-determined price for a public water utility.
Regulated price parity arrangements have other notification requirements when a pricing determination is being investigated (see section 2.2.2).
Determination of pricing for a declared monopoly service
For WICA utilities which have been declared as a monopoly service by the Minister for Water, IPART may, on referral by the Minister, determine a pricing methodology under the WIC Act. To date, IPART has determined a pricing methodology only for the Sydney Desalination Plant.
2.2.2 Other notification requirements for licensees with price parity arrangements
If a licensee has a regulated price parity arrangement, they have different notification requirements when varying standard contract charges. If IPART commences an investigation for the purposes of a price determination for a comparable service of the public water utility relevant to the licensee’s price parity arrangement, the licensee must notify their customers within 28 days that:
- the investigation has commenced
- the standard contract charges will not exceed the maximum price or methodology determined by IPART for a comparable service.