Economic regulation of water services – Commerce Commission
The Government has indicated the Commerce Commission will be the economic regulator for water services under the Government's Local Water Done Well (LWDW) regime. An overview of key activities and milestones for the implementation of LWDW is available on the Department of Internal Affairs website here.
The Commission is currently awaiting the Local Government Water Services Bill (LGWS) that will implement the full regulatory system. In the meantime, the Local Government (Water Services Preliminary Arrangements) Act 2024 enables the Commission to consult broadly on how it proposes to shape up its information disclosure regime.
Broader economic regulation of water in New Zealand
The Commission intends to design a regime that is flexible and proportionate, in line with councils’ different needs and situations. This will provide the clarity and stability local government water service providers need to make the best investment decisions.
The Commission’s initial focus is on setting information disclosure (ID) requirements. It will require water service providers to publish robust information about the planning, investment, and performance of their water and wastewater services. The LGWS Bill requires the Commission to set initial ID requirements within six months after the commencement of the legislation.
The Commission has been actively engaging with stakeholders in water and local government sectors to educate them on its role in economic regulation, including why its initial focus is to improve the information available to understand performance.
Crown monitor role and the Watercare Charter
The Government has appointed the Commission as the Crown monitor for the interim regulation of Watercare. In its capacity as Crown monitor, the Commission will monitor and report on Watercare's performance over the next three-years of the interim economic regulatory period of the Watercare Charter. The Charter came into effect on 1 April this year. This will apply until the full economic regulatory regime is in place. The Watercare Charter focuses on service improvements, while also enabling an average of $1.3 billion of capital expenditure by Watercare annually from 2025 to 2028. The Crown monitor role is targeted and specific to Watercare.
Economic regulation of Wellington Water
The Commission’s role in monitoring Wellington Water’s performance earlier was confirmed by the Government in March 2025. Bringing Local Water Done Well forward for the Wellington region means the Commission will be able to apply early economic regulation on Wellington Water. This will be achieved via ‘foundational information disclosure’. This is a type of economic regulation that requires specified water service providers to publicly
disclose information about aspects of their performance. The Commission’s disclosure requirements for Wellington Water will be targeted to help address key areas for improvement. Wellington Water will be subject to this foundational information disclosure until the enduring information disclosure regime is in place.
More information about the Commission’s role, including an FAQ, is available on its website here.