On Thursday 8 December, two new bills were introduced into Parliament to support the Water Services Entities Bill, which has passed its Third Reading.
You can learn more about both bills via the links below.
The Minister of Commerce and Consumer Affairs announced the introduction of the Water Services Economic Efficiency and Consumer Protection Bill. The key elements of the Bill are set out below, by the Ministry of Business Innovation & Employment (MBIE).
“Economic and consumer protection regulator
The Bill appoints the Commerce Commission as the economic and consumer protection regulator for the four new water services entities. A Water Services Commissioner will also be established within the Commission to reflect the unique nature of the water sector and the importance of Te Mana o te Wai.
The Commission is well placed to take on this role, as it can draw on its existing regulatory functions and its knowledge of competition, economic regulation, fair trading and consumer protection. Appointing a Water Services Commissioner within the Commission will further ensure that economic regulation and consumer protection are given the focus and prominence required, and will provide consumers and industry with a key contact point.
In its economic regulation role, the Commission will obtain and publish information about the water services entities so that consumers and other interested parties have accurate information on how their supplier is performing. The Commission will be responsible for setting performance requirements and quality standards for the water services entities, which may include requirements relating to asset management and investment proposals. The Commission will also be able to apply price-quality regulation, thereby limiting the amount of revenue the entities can earn and overseeing their expenditure to ensure money is used efficiently and prices are reasonable.
In its consumer protection regulator role, the Commission will set a minimum service code to ensure New Zealanders can expect high levels of service. Further, an independent consumer disputes resolution scheme will be appointed to ensure that disputes are resolved quickly and fairly, and the mandate of the Consumer Advocacy Council will be extended to advocate on behalf of three waters consumers.
Timeline
The Commerce Commission and the water sector will need to undertake significant preparatory work before economic regulation commences. This includes collecting information from councils and the four water services entities to develop input methodologies – the rules, requirements and processes that will underpin economic regulation.
The Commission will be working with industry to build its capability in complying with the requirements and will need to follow a fair process in implementing this new regulation. Introducing price-quality regulation before it is confident in the data could lead to unintended consequences relating to over- or underinvestment in water infrastructure.
For this reason, Cabinet has agreed to a staged approach to the implementation of economic regulation so that this can be worked through effectively. The Commission will be developing regulatory rules from 1 July 2024 once the water services entities are operational, with information disclosure and quality-only regulation implemented from mid-2027.
You can find out more about the changes and read the Cabinet papers and supporting documents here.”
