In September 2006 the NSW Independent Pricing and Regulatory Tribunal (IPART) released its determinations and report on 'Pricing arrangements for recycled water and sewer mining: Sydney Water Corporation, Hunter Water Corporation, Gosford City Council and Wyong Shire Council'.
One of the key principles underpinning IPART's approach to regulating pricing for recycled water services is full recovery of capital and operating costs of efficient service provision through a combination of developer charges and periodic changes.
For developer charges, IPART does not set actual prices but rather specifies a calculation methodology that must be used by Hunter Water to calculate developer charges. These charges recover part of the infrastructure costs incurred in servicing a new development.
IPART's Determination No. 8, 2006 Recycled Water Developer Charges requires water agencies to produce Development Servicing Plans (DSPs). A DSP is a document that details the extent of the geographical area covered, underlying technical and financial assumptions in terms of estimates for future capital and operating costs, and demographic assumptions in terms of forecasting future development.
The Developer Charge is calculated on an Equivalent Tenement (ET) basis. An ET is the annual recycled water consumption for an average residential customer (ie. 110kL/annum).