SEQ retail water price monitoring 2013–15

Status
Past review
Final report
31/03/2014

We released a final report on the prices, costs and revenues of five south east Queensland retailers—Unitywater, QUU, Logan Water, Redland Water and Gold Coast Water.

The final report is in two parts:

  • Part A provides an overview of key findings across south east Queensland.
  • Part B is comprised of five reports, one for each retailer under review.

Fact sheets help to explain the final report. Submissions on the draft report are also available.

Following publication of the final report, we issued errata to correct for data errors in information submitted by Redland City Council and Unitywater.

We released a draft report on the prices, costs and revenues of Unitywater, QUU, Logan Water, Redland Water and Gold Coast Water on 31 January 2014.

The report was in two parts:

  • Part A provided an overview of key findings across south east Queensland.
  • Part B is comprised of five reports, one for each retailer reviewed.
    Reports on the prudency and efficiency of operating and capital costs from our consultant (SKM) are also provided below, along with fact sheets which help to explain the draft report.

Submissions in response to the draft report closed on 28 February 2014.

We estimated a benchmark weighted average cost of capital (WACC) of 6.57% (post-tax nominal) for the 2013-15 price monitoring period. This WACC was used to calculate the maximum allowable revenue in our price monitoring reports. However, the retailers retain control over their actual WACC assumptions and prices.

2010-13

2013-15

Risk-free rate
4.91%
2.76%
Market risk premium
6.0%
6.0%
Debt beta 0.11 0.11
Asset beta 0.35 0.35
Equity beta
0.66
0.66
Cost of Equity
8.85%
6.69%
Debt margin
4.78%
3.73%
Cost of Debt
9.69%
6.49%
Capital structure (% debt) 60% 60%
Benchmark WACC
9.35%
6.57%

The QCA’s WACC estimate draws upon the analysis in Appendix B: WACC in our price monitoring final report for 2010–11. We updated the risk free rate and the cost of debt parameters based on independent advice.

We monitored the price of water and sewerage services in south east Queensland for the two year period commencing 1 July 2013.

These services are provided by five monopoly providers: Unitywater, Queensland Urban Utilities (QUU), Gold Coast City Council, Logan City Council and Redland City Council.

The Ministers directed us to:

  • provide information to customers about the costs of providing services
  • treat bulk water costs as a ‘cost-pass-through’ item
  • monitor the change in prices for residential and non-residential customers
  • monitor revenues against costs
  • monitor the entities’ rates of return against a benchmark WACC.

Report and papers

Date
Title Document
12 May 2014 Final report Errata to Final Report – 12 May 2014 pdf, 430.26 Kb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part A – Overview pdf, 715.39 Kb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part B – Unitywater pdf, 2.11 Mb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part B – QUU pdf, 1.54 Mb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part B – Logan Water pdf, 1.23 Mb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part B – Redland Water pdf, 1.29 Mb
31 March 2014 Final report SEQ Price Monitoring Final Report – Part B – Gold Coast Water pdf, 1.44 Mb
Date
Title Document
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Overview pdf, 518.68 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Unitywater pdf, 437.46 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – QUU pdf, 457.01 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Logan Water pdf, 436.66 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Redland Water pdf, 476.17 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Gold Coast Water pdf, 434.46 Kb
Date
Title Document
24 March 2014 Submission A R West Submission on Draft Report pdf, 141.38 Kb
24 March 2014 Submission Unitywater Submission on Draft Report pdf, 9.55 Mb
24 March 2014 Submission Redland Water Submission on Draft Report pdf, 105.80 Kb
24 March 2014 Submission R Koerner Submission on Draft Report pdf, 35.29 Kb
24 March 2014 Submission QUU Submission on Draft Report pdf, 3.55 Mb
24 March 2014 Submission Logan Water Submission on Draft Report pdf, 652.88 Kb
24 March 2014 Submission Gold Coast Water Submission on Draft Report pdf, 235.80 Kb
24 March 2014 Other documents DEWS advice on pass through of bulk water costs pdf, 338.69 Kb
Date
Title Document
06 February 2014 Draft report SEQ Price Monitoring – Part A – Overview pdf, 283.18 Kb
06 February 2014 Draft report SEQ Price Monitoring – Part B – Unitywater pdf, 1.88 Mb
06 February 2014 Draft report SEQ Price Monitoring – Part B – Queensland Urban Utilities pdf, 1.47 Mb
06 February 2014 Draft report SEQ Price Monitoring – Part B – Logan Water pdf, 1.21 Mb
06 February 2014 Draft report SEQ Price Monitoring – Part B – Redland Water pdf, 1.28 Mb
06 February 2014 Draft report SEQ Price Monitoring – Part B – Gold Coast Water pdf, 1.42 Mb
Date
Title Document
31 March 2014 Other documents SEQ Price Monitoring Media Release pdf, 113.73 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Overview pdf, 691.34 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Unitywater pdf, 452.52 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – QUU pdf, 536.44 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Logan Water pdf, 552.68 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Redland Water pdf, 589.67 Kb
31 March 2014 Fact sheet SEQ Price Monitoring Fact Sheet – Gold Coast Water pdf, 449.88 Kb
Date
Title Document
06 February 2014 Consultant report SKM – Operating and Capex assessment – Unitywater pdf, 3.19 Mb
06 February 2014 Consultant report SKM – Operating and Capex assessment – Queensland Urban Utilities pdf, 3.39 Mb
06 February 2014 Consultant report SKM – Operating and Capex assessment – Logan Water pdf, 2.37 Mb
06 February 2014 Consultant report SKM – Operating and Capex assessment – Redland Water pdf, 2.28 Mb
06 February 2014 Consultant report SKM – Operating and Capex assessment – Gold Coast Water pdf, 2.80 Mb
Date
Title Document
15 February 2013 Consultant report PricewaterhouseCoopers pdf, 198.78 Kb
15 February 2013 Consultant report Evans and Peck pdf, 260.44 Kb
Date
Title Document
12 April 2013 Other documents SEQ Price Monitoring Information Requirements for 2013-15 pdf, 133.92 Kb
12 April 2013 Other documents Templates for QUU and Unitywater – Information Requirements for 2013-15 xls, 6.15 Mb
12 April 2013 Other documents Templates for Councils – Information Requirements for 2013-15 xls, 6.19 Mb
Date
Title Document
22 January 2014 Submission A R West Submission pdf, 3.75 Mb
22 January 2014 Submission Redland Water Submission – Data Template xls, 3.75 Mb
22 January 2014 Submission Unitywater Submission (Part B – Data Template) xlsm, 4.43 Mb
22 January 2014 Submission Unitywater Submission – Part A pdf, 11.19 Mb
22 January 2014 Submission Queensland Urban Utilities Submission (Part B – Data Template) xlsm, 9.38 Mb
22 January 2014 Submission Queensland Urban Utilities Submission – Part A pdf, 587.48 Kb
22 January 2014 Submission Queensland Council of Social Services Submission pdf, 255.71 Kb
22 January 2014 Submission Logan Water Submission – Part B – Data Template xls, 6.39 Mb
22 January 2014 Submission Logan Water Submission – Part A pdf, 770.80 Kb
22 January 2014 Submission Gold Coast Water Submission – Part B – Data Template xls, 6.12 Mb
22 January 2014 Submission Gold Coast Water Submission – Part A pdf, 3.99 Mb
22 January 2014 Submission R Koerner – Submission 11 pdf, 105.61 Kb
22 January 2014 Submission R Koerner – Submission 10 pdf, 3.52 Mb
22 January 2014 Submission R Koerner – Submission 9 pdf, 13.55 Kb
22 January 2014 Submission R Koerner – Submission 8 pdf, 156.79 Kb
22 January 2014 Submission R Koerner – Submission 7 pdf, 2.29 Mb
21 January 2014 Submission R Koerner – Submission 6 pdf, 459.58 Kb
15 August 2013 Submission R Koerner – Submission 5 pdf, 13.44 Kb
15 August 2013 Submission R Koerner – Submission 4 pdf, 1.27 Mb
15 August 2013 Submission R Koerner – Submission 3 pdf, 2.39 Mb
15 August 2013 Submission R Koerner – Submission 2 pdf, 909.06 Kb
15 August 2013 Submission R Koerner – Submission 1 pdf, 1.10 Mb
Date
Title Document
06 February 2014 Minister’s direction Ministers’ – Direction Notice pdf, 55.62 Kb