Transcript Dia 1 - Aqua Publica

Regionalisation of
(drinking) water price setting
in Flanders
APE water pricing seminar - Brussels December 4th 2014
Ingeborg Limbourg
WaterRegulator
General missions (Decree art. 12 § 1)
• To inventory, assess, advice and report on all matters
concerning water intended for human use
Specific tasks (Decree art. 12 § 2-7)
• Providing advice and submit proposals to the
Flemish government on:
• appropriate and effective mechanisms for harmonisation
• transparency and regulation on the production, the supply, the
pricing, the consumption, … of water intended for human use
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Regionalisation
6th state reform  came into effect on July 1st 2014
Price setting of drinking
water transferred from
Federal / Belgium to
Regional / Flanders level
‘VMM will organise the tariff regulation for the
integral water invoice.’
‘A uniform tariff structure for the integral water invoice
will be introduced.’
Policy statement of the Minister of Environment , Joke Schauvliege
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Competence moved
to the Flemish
Environment
Policy area
Ministry of Environment, Nature & Energy
Organisation
assigned to the
Flemish
Environment Agency
Current Price Setting
Integral water invoice
• Drinking water component (Distribution and supply of drinking water)
 Maximum price approved / determined by Federal Minister of Economy
 VMM (drinking) WaterRegulator is / was advising the price commission
 Topic of the regionalisation
• Waste water components (2)
•
Supra-Municipal contribution (Waste water treatment = 1 regional tariff)
•
Municipal contribution (Sewerage = maximum regional tariff * 1,4 )
Basic elements for tariff setting are embedded in the water decree
 Price (regional tariff) is set by the water suppliers under supervision of
 VMM Economic supervisor
 Regionalisation creates an opportunity for a holistic approach
of the integral water price
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Challenges in 2015
1. Develop a tariff regulation model
2. Introduce a uniform tariff structure
3. Translate into legislation
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Goal 01/01/2016
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Challenges in 2015
1. Develop a tariff regulation model
2. Introduce a uniform tariff structure
3. Translate into legislation
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Challenge 1
Tariff regulation model
• Preliminary study to investigate possible
methodologies (Completed mid 2014)
• Research done from the integral point of view
• in cooperation with our waste water colleagues but with the necessary
differentiation between drinking water and waste water
• Assessed results with a score card based on indicators that
supported our goal / principals
• fair, efficient, equitable and sustainable
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Tariff regulation model
Most promising
Best fitting =
highest score
2 best fitting:
• Performance standard
• Direct price setting
Most promising = Merge
with ‘extra’ elements
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Tariff regulation model
Most promising
• Results of the study in headlines
• Drafting a business plan by the supplier, including a price
path with an ‘average rate’ and indicating the ‘moving’ average for
a period of six years
• Checking annually and index automatically the tariff by the
regulatory authorities
• (possible) Adjusting the price path after a period of three
years by the regulatory authorities
The outcome of the study will be used for the elaboration of the
final solution (which might differ from the results above).
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Challenges in 2015
1. Develop a tariff regulation model
2. Introduce a uniform tariff structure
3. Translate into legislation
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Challenge 2
Tariff structure
• ‘A uniform tariff structure will be introduced for
the integral water invoice’
• Without (abolish) first 15 m³ drinking water free of charge
• With sufficient incentives for ‘sustainable water use’
• With attention for the vulnerable and ‘protected’ consumers
• With attention for ‘bulk’ consumers
• With (introduce) also a subscription fee for the sanitation component
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Challenge 2
Tariff structure
• Study investigating the possibility to uniform
tariff structures (by WaterRegulator - completed early 2013)
• Research done for drinking water component only
• Full cost recovery principle but No more, no less
• Several criteria (5) used for assessment of the results
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Challenge 2
Tariff structure
•  study updated to the current situation
• Work with the latest consumption and invoice data (2013)
• Focus on a direct link with tariff regulation
• Calculate impact for each possible scenario
•
per water supplier
•
per customer type
• Next step: expand all this to integral water invoice
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Challenges
1. Develop a tariff regulation model
2. Introduce a uniform tariff structure
3. Translate into legislation
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Challenge 3
Legislation
Already in progress:
• The transitional period is settled by means of a collective decree
• Process for the consultation of the stakeholders is started
• consultation ends early February, results late March
Next:
• Proposal (draft) for the necessarry adaptations to the decree
 Probably lay down the procedures of Tariff Regulation and Tariff
Structure into ‘Acts of the Flemish government’ and refer to those
acts in the decree
Goal
published regulations and detailed procedures January 1st 2016
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Thank you for your attention
For supplementary information please contact
[email protected]
WaterRegulator
A. Van de Maelestraat 96
9320 Erembodegem
Belgium
www.vmm.be
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