Public Policy and Regulation of Water Services in Portugal

Transcription

1 Public Policy and Regulation of Water Services in Portugal Jaime Melo Baptista Research-Coordinator National Laboratory of Civil Engineering (LNEC) Portugal Turin School of Local Regulation International Summer School on Regulation of Local Public Services Turin, 10 September 2015

2 The importance of water

3 The importance of water "The Earth is blue", Yuri Gagarin, aboard the Soyuz-R-7, ,600 million years

4 The importance of water The view of Yuri Gagarin seemed to indicate that Earth has almost limitless reserves of water, but the reality is different, especially if we talk of fresh water, which we can use more easily. Total water (salt + fresh) Fresh water Fresh water of rivers

5 The importance of water What s the Earth Worth? (TV Chanel History, 2015) 4,600 million years

6 The importance of water What s the Earth Worth? (TV Chanel History, 2015) Water: 5,618 x USD Fossil fuels (crude and shale oil, coal, gas): 716 x USD Timber: 270 x USD Base metals (iron, copper, zinc): 135 x USD Rock (granite, limestone): 93 x USD (17) Rare hearth elements (Scadium...): 24 x USD Precious metals (gold, silver, platinum): 15 x USD Food (meat, fish, vegetables): 2,5 x USD Diamonds: 0,5 x USD Note: 1 x = 1,000,000,000,000 USD = 1 trillions USD According this assessment, water is the most valuable tangible resource we have in Hearth.

7 What is the question we need to face at the international level about water services?

8 Question we need to face Why people have so different water supply and sanitation conditions around the world?

9 Question we need to face The public water services: Essential for the social and economic development. They have major implications for the quality of life, environment and public health. Several international initiatives: Millennium Development Goals and the anticipated Sustainable Development Goals. UN resolution 64/292 of 2010 recognizing water and sanitation as a human right. The Lisbon Charter for Guiding the Public Policy and Regulation of Drinking Water Supply, Sanitation and Wastewater Management Services. Governments must create a public policy with the necessary conditions to attend the population.

10 The IWA Lisbon charter for public policy and regulation of drinking water supply, sanitation and wastewater management services

11 Lisbon Charter IWA decided to approve a Lisbon Charter: With the principles for good public policy and effective regulation of water services; Declaring the respective rights, duties and responsibilities of the governments and public administration, regulatory authorities, service providers, and users.

12 Lisbon Charter Preamble: The number of countries with regulators is increasing. In September 2014, the First International Regulators Forum, jointly organized by IWA and ERSAR, brought together 100 (out of 164) water services regulators. Principles for public policy: Water services are essential for sustainable development. The provision of water services should preserve accountability and transparency. Service provision should take into account the financial, social and environmental aspects. Effective service provision relies upon the collective actions of interdependent stakeholders.

13 Lisbon Charter Principles of effective regulatory frameworks: Regulation should be a part of public policies; Ensure that all contributors to the service have clear objectives and means of action; Ensure an integrated regulatory approach; Ensure an adequate level of institutional, functional and financial independence; Providing separation between technical and political dimensions; Ensure accountability and public scrutiny of activity; Promote the constitution of a competitive market; Fosters a culture of comply standards and good practices; Contribute to modernisation of public administration.

14 Lisbon Charter Responsibilities of governments/public admin.: Adopt strategic plans for the sector; Establish and strengthen the legal framework; Define the governance models of water services; Create and guarantee an effective institutional framework; As part of this, design the regulatory frameworks; Define goals and set realistic and measurable targets; Ensure access to reliable information; Ensure equality and non-discrimination in access; Prioritise marginalized user groups; Establish a fiscal framework and adequate tariff policies; Provide and manage efficiently financial resources; Improve the structural efficiency of the services; Develop the economy in the water sector; Promote awareness and participation of users; Support human resource capacity building; Provide the means for conflicts resolution; Promote research and innovation.

15 Lisbon Charter Responsibilities of regulatory authorities: Ensure that services are carried out in compliance with legislation and existing contract; Supervise the application of tariff schemes; Promote the provision of suitable quality of service; Promote the quality of drinking water; Address the interface between service providers and users; Clarify the rules of the sector based on regulations; Contribute to fair and open competition between service providers; Collect, analyse and disseminate accurate information; Promote research and innovation; Impose appropriate and proportionate sanctions.

16 Lisbon Charter Responsibilities of the service providers: Operate in accordance with the policies and comply with legal, contractual and regulatory frameworks; Improve operational efficiency and structural efficiency; Implement pricing policies; Contribute to human resources capacity; Verify the integrity of their processes; Aspire to operating beyond compliance. Responsibilities of the users: Effectively exercise their rights and duties; Assur efficient use of water; Avoid inappropriate behaviours. Common responsibilities: All stakeholders should have an ongoing and open dialogue and share information.

17 Public policies for water services

18 Public policies for water services Adoption of strategic plans for the sector: Formulation of national strategies with stable implementation. Definition of goals & measures. Annual monitoring of implementation and public reporting. Definition of the legislative framework: Approving legislation (framework for services and regulation, tariffs, quality of service, water quality, etc.). Clarification of rules governing the sector. Issuing regularly sound recommendations for the sector. Definition of the institutional framework: Definition of responsibilities of owner and operator of the service. Definition of responsibilities of authorities on water services, environment, water resources, public health, and competition.

19 Public policies for water services Definition of the governance of the services: Public, private or public-private governance. Political decisions must be based on sound studies. Healthy competition between models. Definition of quality of service targets: Quality of service based on performance indicators. Annual assessment of the quality of service for each operator. Annual benchmarking between operators. Assessment of the evolution for each indicator. Promoting water quality for human consumption Monitoring compliance in real time. Annual assessment of the water quality for each operator. Annual benchmarking between operators. Assessment of the evolution of the water quality on time.

20 Public policies for water services Definition of the tariff policy: Promoting (a trend toward) full cost recovery. Promotion of efficient and affordable tariffs + social tariffs. Annual assessment of economic performance of operators. Annual benchmarking between operators. Assessment of the evolution of the performance. Management of the financial resources: Large investment in water infrastructures. Management of important financial resources. Creation of an internal market. Construction of the infrastructures: Planning, design, financing, construction and operation of water systems.

21 Public policies for water services Improving the structural efficiency: Current trend to aggregate those local operators. Smaller number of large and modern regional operators. Improving the operational efficiency: Improve of efficiency by the utilities (commercial water losses, physical water losses, energy efficiency, human resources, etc.). Human resources capacity building: Skilled human resources. Experience on planning, design, financing, construction and operation of water infrastructures with appropriate technologies.

22 Public policies for water services Promotion of research and development: Activity on research and development with increasing links between university and industry. Increasing participation in international R&D projects. Development of the economic activity: Improving the development of the water economic sector. Generating new activities with the creation of employment. Introduction of competition: Competition encourages innovation and technical progress. In the case of natural or legal monopolies, it must be promoted virtual competition, ex. through benchmarking. In the case of private involvement, competition in the market (tender procedures for the allocation of delegations, concessions and the provision of services).

23 Public policies for water services Protection, awareness and involvement of users: Assessment of the economic accessibility to the service based on an indicator of affordability. Creation of tools to protect consumers in general. Right to be served when the public system is available. Right to be served within few days of subscription request. Right to have a 24h x 365 days of service. Creation of tools to protect poor consumers. Right to benefit from a social tariff (poor families). Right to benefit from a family tariff (large families). Provision of information: Providing rigorous and comprehensive information to all. Guaranteeing ease-of-use by less informed consumers.

24 Public policies for water services The success of a public policy: The success depends on the ability to manage the implementation of all these components with a effective global and integrated approach. The role of the regulation: Regulation should be seen as a component of public policies on water services, one out of various. But has a very important role given the fact that it promotes or controls most of the remaining components.

25 The results of the public policy for water services in Portugal

26 Resultados da política pública dos serviços de águas e resíduos em Portugal? Water supply: 81% 95% 50% 98,2% 630 8

27 Resultados da política pública dos serviços de águas e resíduos em Portugal? Pollution abatement: 28% 79% 22% 100% 28% 78%

28 Resultados da política pública dos serviços de águas e resíduos em Portugal? Pollution abatement: 55% 99% 17% 95%

29 What regulatory model for the water services?

30 Regulatory model for water services We can approach regulation of the water services in different ways. In Portugal we decided to implement regulation: With an integrated (holistic) approach. Operating at national level (mainland). Regulating all the utilities, regardless the governance model (State-owned, municipalowned and private). Adopting a collaborative and pedagogic regulation.

31 Regulatory model for water services Regulatory Integrated Approach (RITA- ERSAR regulation model): Structural regulation of the sector: Contribution to the organisation of the sector. Contribution to the legislation of the sector. Contribution to the information of the sector. Contribution to the capacity building of the sector. Behavioural regulation of the utilities: Legal and contractual regulation. Economic regulation. Quality of service regulation. Drinking water quality regulation. User interface regulation.

32 Structural regulation of the sector Contribution to the sector organisation: Cooperation with Government in the formulation of the national strategies. Proposal of measures with the aim of resolution of dysfunctions. Monitoring and regular reporting on the degree of implementation of the national strategy. Contribution to the legislation of the sector: Proposing new legislation. Proposing the upgrading of legislation. Approving regulations. Issuing recommendations.

33 Structural regulation of the sector Contribution to the information of the sector: Providing rigorous and comprehensive information to all stakeholders. Reducing information asymmetry. Guaranteeing ease-of-use information for consumers. Contribution to the capacity building of the sector: Promotion of innovation and technology in partnership with research centers and universities. Edition of free technical guides for the utilities. Promotion of training events.

34 Behavioural regulation of utilities Legal and contractual regulation: Analysing the creation of new utilities. Analysing tender processes. Analysing contract documentation. Analysing contract modifications. Approving utility contracts with consumers. Monitoring contractual compliance. Promoting the conciliation. Analysing contract terminations. Assessing the global situation annually. Disseminating information annually. Regulatory live cycle

35 Behavioural regulation of utilities Economic regulation: Defining tariff principles and rules. Analysing proposals for updating tariffs. Allowing contradictory from the utility. Approving the tariffs. Auditing utility, monitoring tariff application. Requesting utility and validating input of data. Accessing the performance of the utility. Allowing contradictory from the utility. Benchmarking utilities. Accessing the evolution. Disseminating information annually. Regulatory annual cycle

36 Behavioural regulation of utilities Economic regulation: The regulator may use various economic regulation models, involving greater or lesser regulatory intervention, as a function of the legal and contractual context: Indirect economic regulation. Economic regulation through contract. Economic regulation through cost plus. Economic regulation through revenue cap. Economic regulation through price cap.

37 Behavioural regulation of utilities Annual assessment of the economic performance for each utility Annual benchmarking between utilities regarding the economic performance Assessment of the evolution for the economic performance

38 Behavioural regulation of utilities Quality of service regulation: Defining indicators for quality of service. Defining targets for those indicators. Requesting utility to input of data. Validating data (1st stage - at office). Validating data (2nd stage - local audits). Accessing the utility s performance. Allowing contradictory from the utility. Benchmarking between utilities. Accessing the evolution on time. Disseminating information annually. Regulatory annual cycle

39 Behavioural regulation of utilities 2 sets of 16 performance indicators have been defined, applied to all the utilities of water supply and wastewater:

40 Behavioural regulation of utilities Annual assessment of the quality of service for each utility Annual benchmarking between utilities regarding the quality of service Assessment of the evolution for each indicator of quality of service

41 Behavioural regulation of utilities Drinking water quality regulation: Defining indicators / targets for water quality. Approving the monitoring program. Auditing utility and laboratory. Receiving on time incompliances information. Monitoring the resolution of compliances. Asking utility to input data from the last year. Validating data. Accessing the utility s performance. Allowing contradictory from the utility. Benchmarking utilities. Accessing the evolution on time. Disseminating information annually. Regulatory annual cycle

42 Behavioural regulation of utilities Annual assessment of the water quality for each utility Benchmarking between utilities and assessment of the evolution for the water quality

43 Behavioural regulation of utilities User interface regulation: Guaranteeing the information to the consumer. Guaranteeing the right to consumer complaining. Receiving the complaint in 10 days max. Contacting both parts. Recommending the solution. Suggesting court if someone do not agree. Monitoring the set of complaints annually. Disseminating information annually. Regulatory annual cycle

44 Regulatory model for water services Regulatory Integrated Approach (RITA- ERSAR regulation model): Structural regulation of the sector: Contribution to the organisation of the sector. Contribution to the legislation of the sector. Contribution to the information of the sector. Contribution to the capacity building of the sector. Behavioural regulation of the utilities: Legal and contractual regulation. Economic regulation. Quality of service regulation. Drinking water quality regulation. User interface regulation.

45 REGULATORY MODEL Regulatory model for water services Regulatory model of ERSAR: Structural regulation of the sector Regulation of operator behavior Contribution to the organisation of the sector Contribution to the legislation of the sector Contribution to the information of the sector Contribution to the capacity building of the sector Legal and contractual regulation Economic regulation Quality of service regulation Drinking water quality regulation User interface regulation

46 Regulatory model for water services The success of regulation depends on the ability to manage the implementation of its components, ensuring an effective regulatory integrated approach (ex. RITA-ERSAR model)

47 Quality of service assessment system

48 REGULATORY MODEL Regulatory model for water services Regulatory model of ERSAR: Structural regulation of the sector Regulation of operator behavior Contribution to the organisation of the sector Contribution to the legislation of the sector Contribution to the information of the sector Contribution to the capacity building of the sector Legal and contractual regulation Economic regulation Quality of service regulation Drinking water quality regulation User interface regulation

49 Quality of service assessment system Quality of service regulation: One of the components of the regulation model. Regulatory goals: Safeguard the provision of suitable quality of service by the utilities to the users, under the terms of applicable legislation and the specifications of the regulator. Safeguard compliance with public service obligations, in terms of: universal access; adequacy of the quantity, quality and continuity of services; structural and operational efficiency of the utilities.

50 Quality of service assessment system The quality of service assessment system has the following characteristics: The system is fed with data: Internal, relating to the utility and system. External, relating to the region of the utility. These data can progress into: Performance indicators; Profile of the utility. Profile of the system. Contextual factors. The system requires reference values and brackets: Reflecting the desirable levels of service for each quality of service indicator. Defined according to area, ex. areas which are mainly urban, those moderately urban and those mainly rural.

51 Quality of service assessment system The quality of service assessment system: Quality of service assessment system Quality of service indicators Data necessary for assessment Profile of the utility Profile of the system Reference values and brackets Contextual factors Interpretation of the indicators to assess the quality of the service

52 Quality of service assessment system Assessment of the quality of the service is carried out based on the interpretation of the indicators: Comparing the calculated values with the previously defined reference values and brackets. Attributing good, average or unsatisfactory performance. Receiving additional support from the profile of the utility, the system profile and other contextual factors, which enable a better interpretation for each situation. Based on information validated, the regulator should process the definitive data, and produce: An individual assessment of each utility for the various indicators, with meaningful symbols. An assessment for each indicator at a national level and benchmarking comparing groups of similar utilities. Assessment of the historical evolution of each indicator at the national level, as regards groups of utilities, and at the level of each utility.

53 Quality of service indicators

54 Quality of service indicators It should be the responsibility of the regulator: To define the assessment system, according to the country s context and its level of development. To define the quality of service indicators. To define reference values or brackets that reflect realistic objectives to be achieved by the utilities. The indicators are important regulation instruments, as they enable: Assess performance based on clear definitions in a common language. Analyse the evolution over time Improve the quality of service and greater effectiveness and efficiency of the utilities. Standardize the collection of information. Express a right of the users of having access to reliable and easily interpreted information.

55 Quality of service indicators The quality of service indicators may cover three major assessment areas: Social sustainability, divided into service accessibility to users and quality of service provided to users. Sustainability of service management, divided into economic sustainability of the service, infrastructural sustainability of the service and productivity of its human resources. Environmental sustainability, divided into efficiency in the use of environmental resources and prevention of pollution.

56 Quality of service indicators The selection of proposed indicators should take into account: Requirements regarding each indicator, individually. Requirements relating to the set of indicators. Individually, each indicator requires: Rigorous definition, attributing concise meaning and unequivocal interpretation; Possibility to be calculated in total by the utilities without significant additional force; Possibility to be verified during audits; Simplicity and easy to interpret; Quantified, objective and impartial measurement on a specific aspect of quality of service, so as to avoid subjective or distorted judgments.

57 Quality of service indicators Collectively, the indicators should be defined so as to ensure the following requirements: Suitability regarding the representation of the main aspects of quality of service, thus enabling global representation; Absence of any overlapping meaning or objectives between indicators; Reference to the same period of time, with the assessment period adopted by the utility generally being that of one calendar year; Reference to the same geographical area, which should be clearly delimited and coincide with the area served by the utility; Applicable to utilities with varied characteristics and level of development.

58 Quality of service indicators The most important component of this system is the quality of service indicators, which: Quality of service indicators are quantitative assessment measures of efficiency and effectiveness for certain aspects of the service : Efficiency measures the extent to which available resources are used in an optimised manner for service creation. Effectiveness measures the extent to which realistically defined management objectives are met. As a whole, the indicators should cover the most important aspects of quality of service in a way that is intended to be correct and balanced.

59 Quality of service indicators The aim is to simplify an analysis which by its nature is complex: Each indicator contributes to the quantification of performance within a given perspective, within a given area and for a given period of time. It is inevitably a partial vision of the global reality and in does not incorporate all of its complexity. As such, its use out of context may lead to incorrect interpretations. It is necessary to analyse indicators as a whole, with knowledge of cause, and linked to their context.

60 Quality of service indicators Quality of service indicators are normally expressed by ratios between data from the utility: They may be undimensional (ex. expressed in %) or dimensional (ex. expressed in /m3). The denominator for the calculation must represent one dimension of the system or utility being analysed (ex. the number of service connections, the size of the pipes or collectors). It must be avoided the use of denominators which may vary significantly from one year to another year due to factors external to the utility. Each indicator is the result of a processing rule, specifying: The data necessary for the calculation. The unit in which it should be expressed. The respective algebraic combination.

61 Quality of service indicators In Portugal: ERSAR defined, in partnership with the LNEC, one set of 16 indicators for each service. They are applied to all operators of water services regardless the ownership and their management model. They are described in Technical Guide 19, Guide for assessing the quality of water and waste services provided to users - 2nd generation assessment system, 2014 edition.

62 Quality of service indicators Quality of service indicators for the water supply service: Social sustainability Physical accessibility of the service (%) Economic accessibility of the service (%) Occurrence of supply interruptions [No. / (1000 connections x year)] Quality of supplied water (%) Reply to written suggestions and complaints (%) Service management sustainability Coverage of total expenses (-) Effective connection to the service (%) Non-revenue water (%) Adequacy treatment capacity (%) Mains rehabilitation (%/year) Mains failures [No./(100 km x year)] Adequacy of human resources (No./1000 connections) Environmental sustainability Water losses [l/(water connection x day) ] Fulfilment of the water intake licensing (%) Energy efficiency of pumping installations [kwh/(m3 x 100 m)] Disposal of sludge from the water treatment (%)

63 Quality of service indicators Some of those indicators relates with efficiency: coverage of total expenses non-revenue water adequacy treatment capacity mains rehabilitation adequacy of human resources water losses energy efficiency of pumping installations. Others are related with effectiveness: physical accessibility of the service economic accessibility of the service occurrence of supply interruptions quality of supplied water reply to written suggestions and complaints effective connection to the service mains failures fulfilment of the water intake licensing disposal of sludge from the water treatment.

64 Quality of service indicators Quality of service indicators for the waste water management service: Social sustainability Physical accessibility of the service (%) Economic accessibility of the service (%) Flooding occurrence [No./(1000 connections x year)] Reply to written suggestions and complaints (%) Service management sustainability Coverage of total expenses (-) Effective connection to the service (%) Adequacy of treatment capacity (%) Sewerage rehabilitation (%/year) Sewer collapses [No./(100 km x year)] Adequacy of human resources [No./(100 km x year)] Environmental sustainability Energy efficiency of pumping installations [(kwh/(m3 x 100 m)] Appropriate disposal of collected wastewater (%) Emergency control discharges (%) Wastewater analysis (%) Compliance with discharge parameters (%) Disposal of sludge from the wastewater treatment (%)

65 Quality of service indicators Some of those indicators relates with efficiency: coverage of total expenses adequacy of treatment capacity sewerage rehabilitation adequacy of human resources energy efficiency of pumping installations. Others are related with effectiveness: physical accessibility of the service economic accessibility of the service flooding occurrence reply to written suggestions and complaints effective connection to the service sewer collapses appropriate disposal of collected wastewater emergency control discharges wastewater analysis compliance with discharge parameters disposal of sludge from the wastewater treatment

66 Data necessary for assessment

67 Data necessary for assessment Data necessary for assessment: Data form the basic component for the construction of a quality of service assessment system. The utility needs to collect, compile and send to the regulator a set of internal data. The regulator should supplement these data with any necessary external data. Each item of data should be in accordance with the definitions published by the regulator. Self-evaluation by the utility of the quality of the database is indispensable. The quality of the data should be explained in terms of the accuracy of data and the reliability of the information source.

68 Data necessary for assessment Accuracy of data: Scale and Error associated with the data supplied 0-5% Less than or equal to ± 5% 5-20% Greater than ± 5%, but better than or equal to ± 20% 20-50% Greater than ± 20%, but better than or equal to ± 50% % Greater than ± 50%, but better than or equal to ± 100% % Greater than ± 100%, but better than or equal to ± 300% > 300 % Greater than ± 300% Reliability of the information source: Scale and Concept associated *** Data based on exhaustive measurements, faithful recordings, procedures, research and investigations which are suitably documented and recognised as being the best calculation method. ** Generically as before, but with some non-significant gaps in the data, such as part of the documentation being missing, calculations being old, or based on unconfirmed records, or also some extrapolated data having been included. * Data based on estimates and extrapolations from a limited sample.

69 Data necessary for assessment Data for drinking water supply quality of service: Identification of the utility Identification of the utility (-) Model of governance (-) Bulk system(s) used (-) (only for the utilities of retail systems) Typology of the area served (-) Shareholder composition (-) Contract term (-) Dwellings Dwellings with effective service (No.) Dwellings with non-effective available service (No.) Existing dwellings (No.) Complaints Complaints and suggestions (No./year) Replies to complaints and suggestions (No./year) Failures and malfunctions Failures in supply (No./year) Failures in main pipes (No./year) Water balance/water volumes Water which entered into the system (m3/year) Authorised consumption (m3/year) Revenue water (m3/year) Non-revenue water (m3/year)

70 Data necessary for assessment Actual losses (m3/year) Abstracted water in licensed abstractions (m3/year) Abstracted water (m3/year) Treated water exported (m3/year) Control of water quality Mandatory analyses carried out on water quality (No./year) Analyses carried out on parameters with a parametric value (No./year) Mandatory regulatory analyses on water quality (No./year) Analysis carried out in compliance with the parametric value (No./year) Energy Energy consumption for pumping (kwh/year) Standardisation factor (m3/year x 100 m) Own production of energy (kwh/year) Energy consumption (kwh/year) Infrastructures and their use Total size of main pipes (km) Average length of main pipes (km) Main pipes rehabilitated in the last five years (km) Connection pipes (No.) Groundwater abstractions (No.) Surface water abstractions (No.) Pumping stations (No.) Water treatment plants (No.) Other treatment plants (No.) Storage tanks (No.)

71 Data necessary for assessment Reserve water capacity for supply and distribution (m3) Overuse of treatment plants (m3) Underuse of treatment plants (m3) Total capacity of treatment plants (m3) Management and infrastructure knowledge index (-) Treatment sludge Sludge with suitable destination (t/year) Initial stored sludge (t/year) System produced sludge (t/year) Sludge from other systems (t/year) Final stored sludge (t/year) Economics Income and total gains ( /year) Total costs ( /year) Average cost for water supply service ( /year) Average disposable family income ( /year) Tariff approved ( /m3) Certifications Environmental management system certification (-) Quality management system certification (-) Occupational health and safety management system certification (-) Other certifications (-) Human resources Water supply service staff (No.) Outsourced water supply service staff (No.)

72 Data necessary for assessment Data for waste water management quality of service: Identification of the utility Identification of the utility (-) Model of governance (-) Bulk system(s) used (-) Typology of the area served (-) Shareholder composition (-) Contract term (-) Dwellings Dwellings with effective service (No.) Dwellings with non-effective available service (No.) Dwellings serviced by individual waste water solutions (No.) Dwellings with available untreated drainage (No.) Existing dwellings (No.) Equivalent population Equivalent population with satisfactory treatment (valid discharge licence) (e.p.) Equivalent population with satisfactory treatment (expired discharge licence) (e.p.) Equivalent population serviced by treatment plants (e.p.) Complaints Complaints and suggestions (No./year) Replies to complaints and suggestions (No./year) Failures and malfunctions Flooding (No./year)

73 Data necessary for assessment Outflows functioning unsatisfactorily (No.) Structural collapses in main pipes (No./year) Control of water quality Analyses requested (No./year) Analyses carried out (No./year) Waste water and energy Invoiced waste water (m3/year) Collected waste water (m3/year) Volume of waste water treated and supplied to another body (m3/year) Volume of waste water treated and for own use (m3/year) Flow rate measurement index (-) Own production of energy (kwh/year) Energy consumption (kwh/year) Energy consumption for pumping (kwh/year) Standardisation factor (m3/year x 100 m) Infrastructures and their use Total length of main pipes (km) Average length of main pipes (km) Main pipes rehabilitated in the last five years (km) Connection lines (No.) Pumping stations (No.) Waste water treatment plants (No.) Collective septic tanks (No.) Treatment plants with valid discharge licence (No.) Overuse of treatment plants (m3) Underuse of treatment plants (m3)

74 Data necessary for assessment Total capacity of treatment plants (m3) Submarine outfalls (No.) Outflow pipes (No.) Unmonitored outflow pipes (No.) Management and infrastructure knowledge index (-) Treatment sludge Sludge with suitable destination (t/year) Initial stored sludge (t/year) System produced sludge (t/year) Sludge from other systems (t/year) Final stored sludge (t/year) Economics Income and total gains ( /year) Total costs ( /year) Average cost of waste water service ( /year) Average disposable family income ( /year) Tariff approved ( /m3) Certifications Environmental management system certification (-) Quality management system certification (-) Occupational health and safety management system certification (-) Other certifications (-) Human resources Waste water staff (No.) Outsourced waste water staff (No.)

75 Profile of the utility

76 Profile of the utility Profile of the drinking water supply utility: Identification of the utility (-) Governance model (-) Contract term (-) Shareholder composition (-) Existing dwellings (No.) Activity volume (m3/year) Typology of the area served (-) Bulk system(s) used (-) Environmental management system certification (-) Certification of quality management systems (-) Other certifications (-) Profile of the waste water management utility: Identification of the utility (-) Model of governance (-) Contract term (-) Shareholder composition (-) Existing dwellings (No.) Dwellings serviced by individual waste water solutions (No.) Activity volume (106 m3/year) Typology of the area served (-) Bulk system(s) used (-) Environmental management system certification (-) Certification of quality management systems (-) Occupational health and safety management system certification (-) Other certifications (-)

77 System profile

78 System profile Profile of the drinking water supply systems: Surface water abstractions (No.) Groundwater abstractions (No.) Water treatment plants (No.) Network length (km) Density of connection branches (No. of connection /km network) Pumping stations (No.) Tanks (No.) Treated water reserve capacity (days) Own production of energy Index of all infrastructural knowledge and management of patrimony (-) Profile of the waste water management systems: Waste water treatment plants (No.) Total length of main pipes (km) Submarine outfalls (No.) Pumping stations (No.) Own production of energy (%) Use of treated waste water (%) Discharge licensing (%) Index of all infrastructural knowledge and management of patrimony (-) Index of flow rate measurement (-)

79 Contextual factors

80 Contextual factors Contextual factors: The contextual factors are important component in quality of service assessment system. The utility and system profiles already take into account the main contextual factors. However, the assessment system should foresee the possibility of including other contextual factors. They do not affect the assessment, but may be taken into account in the forming of judgment. Utilities should identify, for any indicator, additional contextual factors determinant in the interpretation. The contextual factors to be specified should not be subject to any predefined format, but should refer to auditable information.

81 Reference values and brackets

82 Reference values The regulator must: Specify quality levels and brackets for aspects related to the quality of service. Adjust the goals of the indicators to address new emerging challenges. Use of semaphore codes for easier perception: Ex 1. AR02 - Economic accessibility of the service (%) Ex 2. AR01 - Physical accessibility of the service (%) APR - rural area; AMU - moderately urban area e APU - urban area Specify compensation in the event of non-compliance.

83 Reference values Levels and brackets for the quality of service indicators of drinking water supply: Physical accessibility of the service (%): For mainly urban areas served: Good quality of service [95; 100] Average quality of service [80; 95[ Unsatisfactory quality of service [0; 80[ For moderately urban areas served: Good quality of service [90; 100] Average quality of service [80; 90[ Unsatisfactory quality of service [0; 80[ For mainly rural areas served: Good quality of service [80; 100] Average quality of service [70; 80[ Unsatisfactory quality of service [0; 70[ Economic accessibility of the service (%) Good quality of service [0; 0.50] Average quality of service ]0.50; 1.00] Unsatisfactory quality of service ]1.00; + [ Occurrence of supply interruptions [No. / (1000 connections x year), for the utilities of retail systems] Good quality of service [0.0; 1.0] Average quality of service ]1.0; 2.5] Unsatisfactory quality of service ]2.5; + [

84 Reference values Quality of supplied water (%) Good quality of service [98.50; ] Average quality of service [94.50; 98.50[ Unsatisfactory quality of service [00.00; 94.50[ Reply to written suggestions and complaints (%) Good quality of service 100 Average quality of service [85; 100[ Unsatisfactory quality of service [0; 85[ Coverage of total expenses (-) Good quality of service [1.0; 1.1] Average quality of service [0.9; 1.0[ or ]1.1; 1.2] Unsatisfactory quality of service [0.0; 0.9[ or ]1.2; + [ Effective connection to the service (%) Good quality of service 100,0 Average quality of service [90; 95[ Unsatisfactory quality of service [0; 90[ Non-revenue water (%) Good quality of service [0.0; 20.0] Average quality of service ]20.0; 30.0] Unsatisfactory quality of service ]30.0; 100.0] Adequacy treatment capacity (%) Good quality of service [90,100] Average quality of service [70,90[ Unsatisfactory quality of service [0,70[

85 Reference values Mains rehabilitation (%/year) Good quality of service [1.0; 4.0] Average quality of service [0.8; 1.0[ or [4.0; 100[ Unsatisfactory quality of service [0.0; 0.8[ Mains failures [No./(100 km x year)] Good quality of service [0; 30] Average quality of service ]30; 60] Unsatisfactory quality of service ]60; + [ Adequacy of human resources (No./1000 branch connections) For mainly urban areas served: Good quality of service [2.0; 3.0] Average quality of service [1.5; 2.0[ or ]3.0; 3.5] Unsatisfactory quality of service [0; 1.5[ or ]3.5; - ] For moderately urban areas served: Good quality of service [2.0; 3.5] Average quality of service [1.5; 2.0[ or ]3.5; 4.3] Unsatisfactory quality of service [0; 1.5[ or ]4.3; - ] For mainly rural areas served: Good quality of service [2.0; 4.0] Average quality of service [1.5; 2.0[ or ]4.0; 6.0] Unsatisfactory quality of service [0; 1.5[ or ]6.0; - ] Water losses [l/(water connection x day)] Good quality of service [0; 100] Average quality of service ]100; 150] Unsatisfactory quality of service ]150; + ]

86 Reference values Fulfilment of the water intake licensing (%) Good quality of service 100 Average quality of service [90,100[ Unsatisfactory quality of service [0.90[ Energy efficiency of pumping installations [kwh/(m3 x 100 m)] Good quality of service [0.27; 0.40] average efficiencies between 68 and 100%) Average quality of service ]0.40; 0.54] (average efficiencies between 50 and 68%) Unsatisfactory quality of service ]0.54; + [ (average efficiencies below 50%) Disposal of sludge from the water treatment (%) Good quality of service 100 Average quality of service [95, 100[ Unsatisfactory quality of service [0, 95[

87 Reference values Levels and brackets for the quality of service indicators of waste water management: Physical accessibility of the service (%): For mainly urban areas served Good quality of service [90; 100] Average quality of service [80; 90[ Unsatisfactory quality of service [0; 80[ For moderately urban areas served Good quality of service [85; 100] Average quality of service [70; 85[ Unsatisfactory quality of service [0; 70[ For mainly rural areas served Good quality of service [70; 100] Average quality of service [60; 70[ Unsatisfactory quality of service [0; 60[ Economic accessibility of the service (%): Good quality of service [0; 0.50] Average quality of service ]0.50; 1.00] Unsatisfactory quality of service ]1.00; + [ Flooding occurrence [No./(1000 connections x year)]: Good quality of service [0; 0.25[ Average quality of service [0.25; 1.0[ Unsatisfactory quality of service [1.0; + [

88 Reference values Reply to written suggestions and complaints (%): Good quality of service 100 Average quality of service [85; 100[ Unsatisfactory quality of service [0; 85[ Coverage of total expenses (-): Good quality of service [1.0; 1.1] Average quality of service [0.9; 1.0[ or ]1.1; 1.2] Unsatisfactory quality of service [0.0; 0.9[ or ]1.2; + [ Effective connection to the service (%) Good quality of service ]99; 100] Average quality of service [95.0; 99.0[ Unsatisfactory quality of service [0; 95] Adequacy of treatment capacity (%): Good quality of service [80; 100] Average quality of service [60; 80[ Unsatisfactory quality of service [0; 60[ Sewerage rehabilitation (%/year): Good quality of service [1.0; 4.0] Average quality of service [0.8; 1.0[ or ]4.0; 100[ Unsatisfactory quality of service [0.0; 0.8[ Sewer collapses [No./(100 km x year)]: Good quality of service 0.0 Average quality of service ]0.0; 2.0] Unsatisfactory quality of service ]2.0; + [

89 Reference values Adequacy of human resources [No./(100 km x year) for the utilities of retail systems]: For mainly urban areas served Good quality of service [5.0; 10.0] Average quality of service [2.5; 5.0[ or ]10.0; 12.5] Unsatisfactory quality of service [0; 2.5[ or ]12.5; + [ For moderately urban areas served Good quality of service [5.0; 11.0] Average quality of service [2.5; 5.0[ or ]11.0; 14.0] Unsatisfactory quality of service For mainly rural areas served Good quality of service [5.0; 12.0] [0; 2.5[ or ]14.0; + [ Average quality of service [2.5; 5.0[ or ]12.0; 15.5] Unsatisfactory quality of service [0; 2.5[ or ]15.5; + [ Energy efficiency of pumping installations [kwh/(m3 x 100 m)] Good quality of service [0.27; 0.45] average efficiencies between 60 and 100%) Average quality of service ]0.45; 0.68] (average efficiencies between 40 and 60%) Unsatisfactory quality of service ]0.68; + [ (average efficiencies below 40%) Appropriate disposal of collected wastewater (%) Good quality of service 100 Average quality of service ]100; 95] Unsatisfactory quality of service ]95; 0]

90 Reference values Emergency control discharges (%): Good quality of service ]90; 100] Average quality of service ]80; 90] Unsatisfactory quality of service [0; 80] Wastewater analysis (%): Good quality of service 100 Average quality of service [95; 100[ Unsatisfactory quality of service [0; 95[ Compliance with discharge parameters (%): Good quality of service 100 Average quality of service [95; 100[ Unsatisfactory quality of service [0; 95[ Disposal of sludge from the wastewater treatment (%): Good quality of service 100 Average quality of service [95; 100[ Unsatisfactory quality of service [0; 95[

91 Activities, procedures and instruments

92 Activities, procedures and instruments Regulatory activities and procedures: The regulator should ensure the existence of a suitable system to assess quality of service. Based on that system, it should annually carry out a quality of service regulation cycle. In this cycle, the regulator should follow a specific, clear and rational regulatory procedure. This regulatory activity should be carried during the year of reference and after the year of reference (ex-post).

93 Activities, procedures and instruments In the period corresponding to the reference year: The utility carry out, during the year, ongoing collection of the internal and external data necessary to assess its quality of service. In the period following the reference year (ex-post): The utility send to the regulator the internal and external data. The regulator carry out a first validation, through cross analysis. The regulator carry out the final validation, through local audit. The regulator process the data and interpret it, with regard to the reference intervals and the existing contextual factors. The regulator open a contradictory period. The regulator process the definitive data and interpret the results, with: individual assessment of all the indicators for each utility with semaphoric codes, global assessment for groups of utilities per each indicator, or benchmarking, also with semaphoric codes, assessment of the evolution of the indicators by each utility, region and country. If justified, the regulator open infringement proceedings against the utility. The regulator publicly disclose the results of this regulatory component.

94 Activities, procedures and instruments Stages of quality of service regulation cycle

95 Activities, procedures and instruments Metric benchmarking: Used to describe systems of measuring relative performance of utilities. Uses a relatively small number of measures. Requires careful selection of the indicators to be used. It is essential to obtaining reliable and meaningful data. It is essential clarity and soundness of the targets. It represents a very useful incentive to management It must take into account the differences in context and operational conditions of each utility. Trends in performance of each utility, which show improvements over time, can be more meaningful than absolute performance figures. Process benchmarking: Used to lean from the best utility. Uses a much more detailed measures compared with metric benchmarking.

96 Regulatory synergies

97 Regulatory synergies Quality of service regulation articulates closely with other components of the regulation model. Contributes to the legal and contractual regulation: Identify any need for strategic reforms. Identify any need to modify legislation. Identify any need to carryout studies or training in this area. Contributes to the economic regulation Identify the need for investment to improve quality of service. Cross checked for validation, interpretation and analysis. Contribute to the drinking water quality regulation: Cross checked for validation, interpretation and analysis. Contributes to the user interface regulation: Cross checked for validation, interpretation and analysis.

98 Information as a regulatory tool

99 Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format (

100 Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format (

101 Annual benchmarking for all the operators for each performance indicator Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format (

102 Geographical distribution for each performance indicator Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format (

103 Time evaluation for each performance indicator Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format (

104 Information as a regulatory tool Information available in the Annual Report of the Water and Waste Services In Portugal in paper and digital format ( Increase in the number of responses from operators Improvement in data collection quality and quantity had an impact on quality of service assessment

105 Information as a regulatory tool Information available in the site of ERSAR, digital format (

106 Information as a regulatory tool Information available in the site of ERSAR, digital format ( Annual assessment of the quality of service provided by each operator

107 Information as a regulatory tool Information available in the site of ERSAR, digital format (

108 Information as a regulatory tool Information available in the smartphone (

109 Awards of Quality of Service

110 Awards of Quality of Service Preamble: ERSAR has the statutory obligation to: Disseminate information concerning high performance cases; Raise the community awareness to quality issues. ERSAR & partners assign annually the "Awards of Quality of Service in Water and Waste".

111 Final remarks

112 Final remarks Based on 12 years of experience in Portugal, we can identify positive impacts of regulation: It is a powerful tool for an effective public policy. It promotes or controls most of the components of the public policy. It promotes short / medium / long term technical approach instead of short term politic approach. It guaranties stability across time. It introduces efficiency and effectiveness. It guaranties more harmonization in the sector. It guaranties independence from stakeholders. It guaranties more transparency in the sector. A Regulatory Integrated Approach with a collaborative and pedagogic environment can be an effective model.

113 Thanks for your attention