recycling person ' and that is 'owned or controlled by the person by whom those premises are owned'. So, for example, a golf cou rse with a sewer mining facility on its own land, which only uses the recycled water on that land, would not need a WICA licence.
any codes developed by the Department of Water and Energy. These may cover issues to do with marketing , customer transfers and conduct of the water industry. Once developed, Sydney Water is also likely to be subject to these codes.
On the other hand, if the recycled water is to be supplied to other land, such as in a new residential development, the distribution pipeline is likely to cross multiple properties so a licence would be required.
Additional requirements apply to retailers who service 'small retail customers'. A small retail customer is a person who receives less than 15 megalitres of water per year or discharges less than 10.5 megalitres of wastewater per year (to or from all premises that the person owns, leases or occupies). The requirements mainly relate to the terms of a contract between a licensee and a small ret ail customer. They also include restrictions on the disconnection of small retail customers from water or sewer services.
Licence Conditions There are certain standard conditions for WICA licences. Some conditions are specifically for network operators while ot hers are for retail suppliers. Some conditions are specific t o water supply services and others to sewerage services. The conditions are mostly specified in the Water Industry Competition (General) Regulation 2008. One of the standard conditions is that a network operator who supplies recycled water must prepare and comply with a water quality plan, which det ails how the Australian Guidelines for Water Recycling will be implemented. The licence holder also has to prepare and implement an infrastructure op erating plan. The plan should include provisions on how the licence holder will ensure the safe and continued operation of the infrastructure, and arrangements for alternative water supplies when the infrastructure is inoperable. It is important for an existing provider like Sydney Water that these plans are comprehensive and effective. While Sydney Water supports competition, the objective should be to make the water industry more efficient and effective rat her than create additional costs. For example, the maintenance practices for a private recycled water system could affect Syd ney Wat er if it creates unanticipated pressure on the potable water system. A standard cond ition for a retail supplier is to prepare and implement a retail supply management plan. In the case of a licence to supply recycled wat er, the plan needs to cover things like how the licensee plans to deal with events that may affect its ability to supply recycled water. A retai l supplier also has to com ply wit h certain codes of conduct. The retailer must establish its own codes on customer complaints and debt recovery. The licensee also has to comply wit h
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Licence Applications Applications for WICA licences are made to IPART. Application forms and information are available on IPART's web site. Consideration of the application by IPART involves public exhibition of aspects of the licence that are not commercial-in-confidence. Interested parties, such as Sydney Water, may make a submission on the application. The application may also be reviewed by technical consultants. IPART may then make a recommendation to the Minister for Wat er as to whether a licence should be issued and on what terms. Sydney Wat er is likely to make submissions on licence applications where the proposed activities have the potential to affect Sydney Water's costs or operations. The implications of WICA licences for Sydney Water will vary depending on the activity being licensed. Sydney Water will therefore assess the implications and possible responses on a case-by-case basis.
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Significant implications could potentially arise if the Minister for Water declares Sydney Water to be a 'retailer of last resort ' (ROLR) in relation to all or part of its area of operations. If the Minister declares a 'supply failure' in relation to a licensed retail supplier, the licence-holder must cease supplying water or providing sewerage services and the ROLR must t ake over. This has the potential to be a significant obligation for Sydney Water. The extent of the obligation will depend on the nature and location of services provided by a retail supplier who 'fails'. It wi ll also depend on the network operator supplying infrastructure services to the failed retailer.
Conclusion Increased private involvement in the urban water sector could emerge in ways others than those outlined here. Possibly the most likely scenario is that developers provide services to new development areas. They might provide integrated water, wastewater and recycled water services. Or they might just provide recycled water services and leave water and wastewater service provision to Sydney Water. While many of the opportunities created by WICA wi ll not involve Sydney Water directly, in most circumst ances, a key issue for Sydney Water wi ll be to ensure that its responsi bilities and those of the WICA licence holder are clearly delineat ed. This is necessary to ensure that risks to public health, the environment and infrastruct ure can be managed. It will be particularly important to control t he risk of cross connections between the recycled wat er and potable water supplies. The market wi ll ultimately determine the level and form of competition that emerges from WICA. There may be competition for certain segments of the market. But competition within the market, particularly for the supply of bulk water, may require further institutional changes. While WICA may not be the end point in institutional reform in the water industry it is an important and comprehensive start.
The Author Sally Walkom is Manager, Regulatory Projects in the Regulatory Strategy and Pricing team, Sydney Water. Email Sally.Walkom@sydneywater.com.au.
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