Integrating land use and water cycle infrastructure planning. Graeme Ballard 12 July 2011

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1 Integrating land use and water cycle infrastructure planning Graeme Ballard 12 July 2011

2 Unitywater One of the 3 Distributor-retailer water utility businesses established in SEQ in July 2010 Water and waste water service provider for Moreton Bay and Sunshine Coast Regional Council areas Wholly owned by the two Councils but independently operated with own Board and legislated functions and powers

3 Scale Residents served 670,000 Customers 262,000 Trunk & reticulation water mains 5174 kms Trunk and reticulation sewers 4945 kms Value of assets - $2 billion Capital works - $200 million per year

4 Functions Water and sewage distribution Includes sewage treatment Excludes bulk water storage, distribution and treatment Charging User tariffs Infrastructure charges Planning and regulatory functions, including DA

5 Planning & DA Interim arrangements until 1 July 2013 Delegated assessment model for DA DRs made IDAS concurrence agencies for all assessable development Mandatory delegation of functions back to relevant councils Administrative arrangements between Councils and DRs about how functions carried out Infrastructure charging DR function for water and sewerage infrastructure Admin arrangements or delegations with Councils about how functions carried out Impact mitigation conditions Council function under delegated assessment model Land use planning/pip Council function Admin arrangements with Councils about W&S inputs and inputs into DR network planning

6 Planning & DA after 1 July 2013 Development assessment Utility model To be defined, including relationship to IDAS Examples interstate a guide e.g. Vic, NSW Planning concept stage (RoL, MCU) likely part of IDAS Works stage likely outside (Vic and NSW treat as a commercial contract matter between developer and utility) Some issues Jurisdiction at RoL and MCU stages price signaller only? Type and extent of input into RoL and MCU connections policy Land use and network planning PIP still key infrastructure planning mechanism in planning scheme Water Netserv Plan to be the key planning document for DRs Alignment required on planning assumptions in both plans Infrastructure charging Current capped regime expires in 2013 Replacement and relationship with tariffs and new Price Path approach unclear at this stage

7 Economic regulation of water Local government responsibility SEQ DR water and sewerage pricing was subject to QCA price determination Fairer Water Prices Amendment Act shifted responsibility back to local governments Subject to QCA price monitoring Cost drivers Compliance Growth Renewals Improvements Expenditure must be robustly justified to be reflected in price Prudence and efficiency test

8 W&S infrastructure has significant cost impacts E.g. sewage treatment infrastructure Higher standards of treatment (e.g. 3/1 N/P concentrations) now required Nil discharge target by 2026 Substantial increase in costs to achieve higher treatment standards Can increase funding gap, particularly in infill areas, and lead to higher user charges Cost of living/affordability impacts Other lower cost but sustainable options may be possible Lower quality effluent Recycling through wetlands Nutrient offset works (land rehab and/or riparian veg restoration)

9 Total Water Cycle Planning Environmental Protection (Water) Policy Local governments for DR to prepare TWC plans Integrated approach to land use and infrastructure planning Reduce demand on potable water Improve water quality in waterways Reduce energy consumption Improvements Optimal mix of policy, regulation and infrastructure to achieve objectives Science-based planning process Least cost sustainable solutions for water cycle management, including sewage treatment and effluent use

10 The DR dimension Water Netserv Plan Legislative requirement under DR Act Key planning and management tool for DRs Must align with land use and growth managements intentions of State and Local Governments (Regional and local plans) Must have regard to Total Water Cycle Plan of Local Govts Netserv plan describes Growth and investment strategy of DR Operations to optimise performance, reduce service costs and remain environmentally compliant Charges for services and infrastructure Maintenance and renewal strategies for assets Unitywater proposes TWCP as central document for justifying service areas, service types and service standards Key input into Capital and operational expenditure decisions

11 The planning opportunity Regional Planning EPP Water QCA price monitoring State Total Water Cycle Plan Total Water Cycle Plan Planning scheme (inc PIP) Local Govt Compliance Growth Renewals Improvements Water Utility Water Netserv Plan Water Netserv Plan Water price path/water price mitigation plan Prudent and efficient expenditure

12 National dimension The urban water sector is receiving confused messages about its role in contributing to water sensitive or liveable cities. Opportunities to deliver integrated urban water cycle solutions and adopt water-sensitive urban design mean water planning is central to urban planning. However, institutional arrangements are generally not yet clear about the role of the sector. National Water Commission April 2011 Regulatory arrangements governing urban water quality with the aim of protecting public health and safety and the environment have served Australia well in the past, and our nation s drinking water is generally safe and of a very high quality. However, there is concern about some matters... Wastewater treatment and disposal standards are often overprescriptive, input focused, and set without enough consideration of the costs that they impose. Frameworks for water quality regulation, particularly for integrated water management, are jeopardised by insufficient and diffuse technical expertise and inconsistent approaches to their implementation. National Water Commission April 2011 Infrastructure Australia Communicating the imperative for action: report to COAG (June 2011) National Water Commission Urban water in Australia: future directions (April 2011) Productivity Commission Current investigation into Australia s urban water sector In the water sector, the case for reform is becoming increasingly clear and strong... Infrastructure Australia June 2011

13 Conclusions Present regulatory framework is not consistent or easily navigated Overlapping and unclear roles and responsibilities Water utilities (DRs) subject to economic pricing principles Impacts on decisions and costs - prudent and efficient Regulatory compliance fundamental but it is a price driver, e.g. existing treated effluent discharge targets (2026 nil discharge) not achievable and may not be needed in all cases and there are diminishing returns in targeting point source discharges over diffuse sources Total Water Cycle Planning provides a robust science-based planning and management approach that could/should be a principal mechanism for sustainable water cycle management TWC Planning provides a robust tool to inform land use and water infrastructure planning processes Opportunity to provide a tangible, workable model to address national urban water agenda issues