Queensland Urban Water Industry KPI Reporting. Innovation Event November 2015

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1 Queensland Urban Water Industry KPI Reporting Innovation Event November 2015

2 Disrupt or be disrupted, the venture capitalist Josh Linkner warns in a new book, The Road to Reinvention, in which he argues that fickle consumer trends, friction-free markets, and political unrest, along with dizzying speed, exponential complexity, and mindnumbing technology advances, mean that the time has come to panic as you ve never panicked before.

3 OECD and G20 Countries Over 50 jurisdictions > 30 have economic regulation

4 Economic Regulation pricing regulation is not a priority, By connections ensuring consistent services in spite of variability in size and structure, competition performance monitoring benchmarking comms & transparency, balancing conflicting regulatory requirements, basis for successful contracting-out (Rouse, 2009), capital investment oversight. clarity on the conditions on which contracts are based; due consideration where there is poor information on condition; a system for integrated planning; the framework for periodic reviews of contracts; and mandatory consumer consultation and transparency. Water benchmarking. Source: Walter et al. (2009).

5 Performance Reporting Widespread International: common in many jurisdictions Performance benchmarking, National: Competition NPR reporting, by comparison OTTER analysis (Tas), State-wide Comparative comparitive efficiency reports (NSW) analysis. State: Various performance reporting schemes in the last decade, QCA monitoring in SEQ, new KPI framework. Performance reporting is typical, Methodologies are varied, Queensland is catching up. Infrastructure Australia National Water Commission Productivity Commission

6 How are we doing?

7 Integrated Quality Control <2006: Numerous requirements Real water losses, per scheme 2007: SWIM: passive data transfer 2009: preliminary QA web forms 2011: public reporting (17 >35) : user-defined bounds, limits and alarms 2015: Mandatory KPI reporting

8 Simplification still needed

9 Financial Sustainability

10 Cross-industry analysis regional STPs Volume and type of treatment Volume and type of recycling Volume and type of discharge CAPEX $/kg N reduced Annual OPEX/EP ($) Population served (000s)

11 Longitudinal Analysis Standards Population 450 Asset life years Expectations Bores Sewerage Water Schemes Storages

12 Where to next?

13 The future - what can we do? Economic Regulation DEWS - collaboration Optimise indicators Customers DEHP LGAQ program Category Demographic Water Source Geographic Governance Compliance costs Cost Driver Population size Population growth rate Population density Number of communities served Cultural drivers of demand Socio-economic Number and nature of industry customers Age/history of community Source infrastructure Number and reliability of sources Raw Water costs Raw Water quality Topography Distance to nearest regional centre Climate Catchment characteristics Management/ political Management Capacity Scope of operations Capital planning Financial structure Levels of service Statutory planning / management Environmental standards Health standards Economic regulation Design Standards

14 qldwater is an initiative of: Rob Fearon

15 This paper empirically analyzes the efficiency of urban water utilities using stateof-the-art methodology combining data envelopment analysis (DEA) and a twostage double bootstrap procedure.

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17 Regional Queensland 63 utilities over 370 towns 88% potable supplies >50% have <500 people Population (000's) NSW Vic Qld WA SA NT Tas ACT Source: ABS

18 Regional Annual Revenue

19 Annual Revenue $6 million 4,654 connections RAPAD is 1.6 x the size of Victoria $22 million 15,360 connections