queensland’s water sector: a 30-year strategy

Department of Energy and Water Supply

Great state. Great opportunity.

Queensland’s water sector: a 30-year strategyDiscussion paper: Shaping our water future

CS1994 12/12

© State of Queensland, Department of Energy and Water Supply, 2012.

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Queensland’s water sector: a 30-year strategy Discussion paper: Shaping our water future i

Ministerial statement

Shaping our water future

Every Queenslander expects and relies on secure supplies of high-quality water and sewerage services to support their livelihoods and lifestyles. In 2012 there is an expectation that these services will be provided without detriment to the natural environment, at the lowest possible cost, by skilled and accountable professionals.

Government, in responding to these needs and expectations, wants active discussion and participation in creating a new path for Queensland’s urban water future in urban, rural, regional and remote communities.

Government understands its leadership responsibility in a sector that impacts on the health, wellbeing and prosperity of all Queenslanders, no matter where they live, and which underpins business, agriculture and the sustainability of the natural environment.

The vision that we want to test with our water champions, the community, local government and the private sector is to:

Create a Queensland water sector with the capability to deliver integrated catchment-based recreation, water supply, sanitation, irrigation and environmental services at lowest cost.

This vision cannot be created and achieved by government alone and this discussion paper is seeking your input and innovative ideas (big and small) to help realise our water future. Future generations will judge us by our actions today.

To achieve this vision we need to challenge the current arrangements, and this may include:

•creating stand-alone, financially self-sustaining, scalable water supply and environmental service entities based on catchments

•establishing simple regulatory frameworks that incentivise innovation to reduce cost pressures and enhance liveability and the environment

•recognising the role of catchments, urban and rural run-off and sewage treatment in the overall health of water supplies and our waterways

•empowering consumers to encourage smarter use of water and signal fair pricing

•establishing a recognised and respected industry underpinned by a nationally based skills framework, with commonly defined roles and career opportunities

•creating greater opportunity for private sector involvement and investment

• fostering more sophisticated integration of water and sewerage services planning in regional planning

• introducing long-term urban water planning that takes account of the variable nature of our climate and smoothes the price path for consumers

•providing greater opportunity for rural water users to maximise the potential of their entitlements and irrigation infrastructure.

In realising the vision the following guiding principles are to be considered:

•public accountability

•user pays

•operation of infrastructure which best meets the interests of business and the community.

ii Queensland’s water sector: a 30-year strategy Discussion paper: Shaping our water future

In Queensland, urban water and sewerage services have historically been provided by local governments. However, in many parts of the state, infrastructure is reaching the end of its life and requires expensive upgrade or renewal. New, tighter environmental licensing to protect the health of our waterways is further driving the need for significant infrastructure upgrades. Retaining skilled water professionals to operate these increasingly complex operations is difficult. Growing populations, particularly along the coast, are increasing demand for new water and sewerage services at ever increasing costs.

Continuous urban growth in South East Queensland is placing pressure on water quality in streams and bays. This, together with the response to the last big drought, has seen massive expenditure on infrastructure. This has led to increased debt which is driving up costs, masking the advances gained on water security and overshadowing the benefits gained from the scale and focus of new council-owned water businesses. Previously under-resourced smaller regional councils now benefit from the expertise and funding of these larger specialised businesses.

This discussion paper identifies issues, challenges and, importantly, opportunities to realise the vision. As with the corresponding and related 30-year electricity strategy, we are looking for community, business, water champions and interested people to come forward and get involved by providing feedback and input to this important initiative. The strategy for our future will be completed after the feedback is received. This government wants to work with all to ensure a sustainable and affordable water future.

Honourable Mark McArdle MP Minister for Energy and Water Supply

Queensland’s water sector: a 30-year strategy Discussion paper: Shaping our water future iii

Contents

Ministerial statement i

Achieving a 30-year water strategy 1Two-phase process 1Aim of this discussion paper 1Structure of this discussion paper 1

Part 1 Our water vision—shaping our water future 2Challenges 2Current state and future needs 3Transition to the future 5

Light-handed regulation 5Water business sustainability 6Professional recognition 8Innovation 8Integrated planning 10Empowering customers 12Pricing 13Hardship concessions 13Further ideas 13

Part 2 Queensland’s water sector 14Our water resources 14

Where our water comes from 14Water quality 15Water reliability 16Sewage management 16

Water sector participants 17Service providers 18Consumers 19

Households 19Agriculture 20Resources sector 20

Next steps 22Be part of the solution 22

Queensland’s water sector: a 30-year strategy Discussion paper: Shaping our water future 1

Achieving a 30-year water strategy

Two-phase process

The 30-year strategy is being developed in two phases. Phase 1 is the release of this discussion paper for public consultation for a three-month period. Phase 2 will be the development of the strategy itself. The information received during the public consultation process will influence the strategy and the vision for the water sector.

Aim of this discussion paper

The aim of this discussion paper is to generate discussion on:

•where we are now

•where we want to go

•what needs to be done to achieve our water vision.

The focus of this paper is on water and sewerage service providers as the cornerstone of the water sector and their role in the supply of water for human needs. This paper does not directly discuss:

•water resource planning processes which decide how much water is taken and how it is shared between human uses and the environment

•broader environmental issues, such as water quality objectives

•national water frameworks.

Structure of this discussion paper

The discussion paper has been divided into two parts.

•Our water vision focuses on what the future may look like, and discusses what needs to be done to achieve our water vision. It puts forward some ideas for the future, and includes selected case studies.

•Queensland’s water sector focuses on consumers and service providers, as well as the broader water sector. It provides background material on some of the water issues facing Queensland.

This discussion paper may not have canvassed all issues that you are interested in. You can raise other issues as part of your feedback on shaping our water future.

Phase 1Queensland’s water sectordiscussion paper2012

Phase 2A 30-year strategy forQueensland’s water sector2013

2 Queensland’s water sector: a 30-year strategy Discussion paper: Shaping our water future

Part 1 Our water vision—shaping our water future

Challenges

The water sector is facing challenges in terms of its ability to manage Queensland’s water supplies and its water and sewerage infrastructure. Some of these include:

•competition for water between the agriculture, manufacturing, mining and urban sectors (water security and reliability)

•water pricing and the financial viability of service providers (affordability)

•prescriptive and onerous regulatory requirements (regulatory burden)

•climate variability (water security and reliability).

Significant growth in population, urbanisation, industry and agriculture has occurred recently in Queensland and is likely to continue.

By 2042, Queensland’s population is expected to be at least 6.6 million, compared to 4.4 million in 2008–09, and we will need to find water for that growth. Similarly, growth in the agriculture, resources, tourism and construction industries is expected to continue.

Water will be needed to support the Queensland Government’s commitment to support a four-pillar economy, including the intent to double food production by 2040.

Queensland population and water use, 1983 to 2042

Note: 1 gigalitre is 1 billion litres of water.

Sources:

‡ Australian Bureau of Statistics 2008, Population projections Australia 2006–2101, cat. 3222.0 (based on series C). * Australian Government 2009, Water resources – allocation and use, <http://www.anra.gov.au/topics/water/allocation/index.html>. # Department of Environment and Resource Management 2012, Water in Queensland, Queensland Government, p. 16.

1247 gigalitres*

3350 gigalitres#

161% increase

Growth also occurred in the resources, agriculture and construction sectors during this time.

? gigalitres2.4 million

Population

Total water use

1983–84 2008–09 2042

4.4 million‡

83% increase

6.6 million‡

50% increase

http://www.anra.gov.au/topics/water/allocation/index.html


We need to have a strong and resilient water sector to ensure future water and sewerage services are available at a low cost to customers.

Our water vision is to:

Create a Queensland water sector with the capability to deliver integrated catchment-based recreation, water supply, sanitation, irrigation and environmental services at lowest cost.

Current state and future needs

The following table summarises the current state of the water sector and what is needed for the future.

What we have today What we need tomorrow

Climate-dependent water supplies

• Reliance on climate-dependent supplies (e.g. rivers and groundwater)

• Difficulty for some service providers to plan for climate variability, including cycles of drought and flood

• Seasonal shortages in some communities

• Limited use of alternative water supplies (e.g. recycled water, stormwater, desalination, coal seam gas water) by the agriculture, mining and urban sectors

Diverse and reliable water supplies

•Water supply and sewage management solutions that are adaptable and resilient to climate and future changes in water needs

•Greater community understanding of the role of alternative water supplies

•New opportunities for recycling schemes and storage and distribution infrastructure for agriculture and mining

Varying capability of some service providers

• Lack of critical mass or scale necessary to deliver water and sewerage services

• Difficulty in attracting and retaining skilled staff

•No recognised water sector skills or competency-based framework

• Increasing skill shortages as the ageing workforce retires

• Limited understanding of prices and the cost of delivering water and sewerage services

• Limited application of economics in water supply and sewage management decisions

• Rising costs associated with meeting increasing community expectations on water quality and service standards

• Under-investment in skills and infrastructure

• Limited cohesive planning for infrastructure needs, including new developments and renewals

Efficient and effective services

• Investment in people, skills and capacity, and better use of local expertise and skills

• Clear recognition of water professionals with the potential for competency-based training and/or water industry award

• Better synergies across neighbouring local governments and service providers

• Regional alliances or similar approaches to collaboration to implement innovative, local, shared-cost alternatives and to build capacity and skills

• Consideration of social, economic and environmental costs and outcomes and cumulative impacts

• Creation of a more professional water sector through better engagement and collaboration

• Better investment in infrastructure, skills and levels of service (no subsidies)

•Greater private sector involvement

Complex regulation

• Complex institutional/regulatory frameworks with multiple departments, each having differing roles

Light-handed regulation—performance reporting

•More flexible institutional arrangements and regulatory frameworks

• Flexible frameworks to support innovative, localised solutions


What we have today What we need tomorrow

Unfulfilled customer expectations

•High expectations of reliability and service quality with weak recognition of costs

• Varying service standards

• Limited awareness of how the costs of water and sewerage services influence price

Empowered customers to encourage smarter water use

• Engaged community members that have their say on customer service standards

•Greater understanding of costs of water and sewerage services

• Better engagement between service providers and community and industry to promote understanding of the water cycle and environmental impacts

• Customer input into affordable, locally relevant water supply and sewage management solutions

• Cost-reflective pricing

• Better demand and supply measures, including signals to consumers (e.g. billing)

• Tenant billing

Unsustainable or inequitable hardship assistance

•Higher number of people having difficulty paying for water and sewerage services

• Complaints handled by individual service providers

• Applications for hardship assistance made to each utility (e.g. water, electricity, gas, telephone)

Sustainable hardship assistance

• Better application of concessions

• Access to independent dispute resolution

• Streamlined application process for hardship assistance across utilities and improved consistency across the different hardship programs

Planning focused on water and sewerage services

• Planning focused on individual urban developments and not catchment based

• Service providers focused on their local needs for water and sewerage services

• Various planning approaches for new (greenfield) and existing (infill) developments

• Urban development pressures

Proactive planning of water supply and sewage management

•Movement towards total water cycle management

•Nutrient trading

• Catchment-based or cost-effective decentralised solutions

• Integrated planning for water and energy

• Cooperation in the planning and delivery of catchment-based scalable water and sewerage solutions

Immature technology and mixed delivery of innovation

• Limited understanding of the connections between food, energy and water

• Limited information on energy and water footprint

• Potential regulatory barriers to innovation and localised solutions

• Limited re-use and recycling

Cost-effective and proven technology (no subsidies)

• Investment in smart technology, future innovation and research, and use of trials

• Investigation of options for predictive technology for water in the home (similar to energy) to help customers modify their water use behaviour

• Integrated water and energy planning in water supply and sewage management

Traditional infrastructure solution

• Traditional infrastructure solutions and reliance on subsidies

Expertise-based decision-making

• Decisions based on expertise in water and sewerage service solutions

• Incentives for innovation to influence decisions on water and sewerage service solutions


Transition to the future

The question we can now ask is: how do we move from where we are today to where we need to be?

We all need to work together to decide on what needs to be done—by when, by whom and at what cost—to create a water sector that can support our future economic, social and environmental wellbeing.

For example, if we are seeking a more light-handed approach to regulation, how do we ensure that a service provider fully considers water security and the potential to share resources and expertise with neighbouring service providers?

Some priority areas and possible ideas are discussed below.

Light-handed regulation

The water sector covers a range of activities such as water supply, natural resource management, land use planning, public safety and environmental protection. Eight Queensland Government departments currently have a direct portfolio interest in these activities, placing numerous regulatory obligations on the water sector.

In consultation with water service providers and the broader water sector, the Department of Energy and Water Supply (DEWS) is investigating the benefits of moving away from a rigid process of approving plans1 (with the associated costs of regular reporting and compliance programs) to business-based performance reporting.

Reporting on specific performance measures would be mandated and others might be voluntary, depending on the size of the service provider. A service provider could be required to report and self-rate its performance against a number of key performance indicators, which could include, for example, time frames for connections, complaints resolution, customer service standards, and community engagement on key water supply and sewage management projects. Information on key areas of improvement for the next 12 months would also be included when reporting against performance. This report would need to be endorsed by the service provider and made available to the public.

As our population grows, there is also a greater need for sewage treatment plants and networks to be more efficient, and to plan for future growth. Current regulatory obligations may restrict collaboration between neighbouring local governments and innovation in waste disposal and re-use (e.g. nutrient trading, bubble licensing).

Have your say

What needs to be done to create a light-handed regulatory model?

How can we maintain the integrity of the regulatory framework (e.g. drinking water quality, environmental protection, public health) while reducing the regulatory burden?

What needs to be regulated?

What can move towards self-regulation?

A number of government departments regulate or have an interest in water and sewerage services. In what ways could this be better steamlined?

1 Part of current regulatory obligations for a service provider.


Water business sustainability

Small and medium service providers find that the size of their organisation affects their capacity to deliver services, because of the following factors:

• low revenue base and difficulty in investing in people and solutions

•difficulty attracting and retaining staff

•difficulty responding to regulatory obligations, increases in cost of water and community expectations

• insufficient staff numbers to manage the service.

These issues are exacerbated in certain remote indigenous communities where reliable services are costly to supply and there is no rates base, little engagement with the real economy, and significant challenges in attracting, accommodating and retaining skilled staff.

Regional alliances

The Queensland Water Regional Alliances Program (Q-WRAP) is a local government led initiative. Its purpose is to investigate a range of matters, including possible institutional models, for urban water supply outside of South East Queensland. As part of this, the program allows for review and support processes in three pilot regions for an analysis of potential collaboration. Currently, selected councils in Far North Queensland and Central West Queensland have confirmed participation in the program.

Source: Local Government Association of Queensland & Queensland Water Directorate 2011, Queensland – Water Regional Alliances Program, <www.qldwater.com.au/QWRAP>.

Have your say

How do we facilitate the sustainability of service providers, particularly those who already have difficulties with revenue, resources and/or skills to maintain networks and deliver water supply and sewerage services?

www.qldwater.com.au/QWRAP


Queensland’s population by region, 2011 and 2031

Sources:

* Australian Bureau of Statistics 2008, Population projections Australia 2006–2101, cat. 3222.0 (based on series C).

# <http:oesr.qld.gov.au/subjects/demography/population-projections/tables/proj-pop-series-sd-qld/index.php>.

Kilometres

0 500

Far North

North West

Brisbane

SouthEast

Wide Bay–Burnett

DarlingDowns

Fitzroy

South West

Mackay

Central West

Northern

Cooktown

Cairns

Dalby

Gold Coast

Bundaberg

Gladstone

Weipa

Townsville

Innisfail

Longreach

Toowoomba

RockhamptonEmerald

Normanton

Mackay

RomaCharleville

Charters Towers

Mount Isa

Bowen

Goondiwindi

Queensland’s population: 2011 and 2031*

2011: 4.5 million 2031: 5.9 million

Population by region: 2011 and 2031#

South East2011: 3 052 0002031: 3 973 000

Wide Bay–Burnett2011: 296 0002031: 388 000

Far North2011: 278 0002031: 336 000

Darling Downs2011: 243 0002031: 314 000

Fitzroy2011: 228 0002031: 308 000

Northern2011: 236 0002031: 312 000

Mackay2011: 178 0002031: 250 000

North West2011: 34 0002031: 35 000

South West2011: 26 0002031: 27 000

Central West2011: 12 0002031: 12 000


Professional recognition

Fulfilling current and future needs of Queensland’s water sector requires the continuous development of a workforce which is adequate in size, capable in skill and strong in leadership.

It is therefore critical that the water and sewerage services, either within local government or other service provider models, give clear recognition to water professionals. One possibility could be to create a water industry award in Queensland. An industry award could cover employers and employees involved with storage, manufacturing (e.g. desalination), transportation and supply of water and sewerage services. It would include recycling of sewage and stormwater. An award approach would ensure consistency in skills and minimum wages and facilitate an appropriate water sector professional training program.

Have your say

What other options exist for creating a professional, resilient and well-respected water sector?

Innovation

Queensland’s regulatory framework must consider outcomes, rather than solely focus on infrastructure and impose compliance. Prescriptive regulatory outcomes can restrict innovation in comparison to outcomes-based regulation. For example, if outcomes-driven, a service provider building a sewage treatment plant may be required to show that it has an overall neutral effect on the environment by undertaking other activities to offset the level of pollution or discharge. The service provider may pay another party (e.g. a farmer) to implement certain actions that benefit the receiving environment or downstream water supply source.

Innovation is not the end result. Innovative techniques and technology should be trialled and implemented to benefit the water and sewerage service. Innovation has the potential to reduce business costs by deferring new infrastructure or reducing maintenance costs. However, innovation needs recognition, because it is often only through recognition that innovation becomes accepted and new technologies become established operating practice (e.g. resource recovery).

An example of innovation in resource recovery

Adapted from Prosser, IP 2011, Water: Science and Solutions for Australia, CSIRO Publishing, p. 86.

Water supply EffluentWaste

Blackwater andgreywater

a. Conventional

b. Resource recovery

Stormwater

Biosolids

City Wastewatertreatment

Water supply Wastewater

Waste

Greywater

Stormwater

BiosolidsCity

Greywaterrecycling

Resource recovery

Blackwater

Energy and fertilisers


Providing an award for innovation and business excellence would recognise local achievement, leadership and innovation of service providers.

Oxley Creek biosolids facility

In 2008, sewage treatment plants (STP) in the Brisbane City Council area were upgraded to improve nutrient removal. However, the upgrade also resulted in an increase in the amount of sludge, or biosolids, which requires greater treatment before being disposed of.

A large-scale biosolids facility was built at Oxley Creek. This is now the centralised treatment point for five STPs in the surrounding region. In its first four months of operation, the facility reduced volume of waste and disposal costs by 70 per cent, resulting in a saving of $80 000 per month.

Source: Barr, K, Solley, D, Starrenburg, D & Lewis, R 2008, ‘Evaluation, selection and initial performance of a large scale centralised biosolids facility at Oxley Creek Water Reclamation Plant, Brisbane’, Water Science Technology, vol. 57, iss. 10.

Our waste has value

The supply of phosphorus, a critical nutrient for plant health, has reached its limit. Queensland farmers purchase phosphorus on the world market at significant costs.

In our towns and cities, phosphorus is removed from our sewage every day, at a significant cost to the community, before it is released to the environment.

Imagine if we could reduce the cost of removing phosphorus from waste, increase its availability to farmers through an alternative water source such as recycled water, while at the same time protecting the environment.

Have your say

How do we encourage and reward innovation?

Integrated planning

Better planning for new developments, both in new and established suburbs, is essential so that residents can be provided with necessary services (e.g. energy, water, sewerage, transport) at least cost to the community, service providers and the state.

Planning for water and sewerage services is often considered from a service provider perspective rather than from a whole-of-catchment perspective. For example, if there are several service providers in a single catchment, current regulations require that they each have a plan for drinking water and a discharge licence for any sewerage infrastructure they operate. Catchment-wide approaches can encourage more cost-effective and innovative solutions, reducing the burden on individual service providers.

Total water cycle management

In 2011, the Moreton Bay Regional Council Total Water Cycle Management (TWCM) Strategy won a state award for excellence. The strategy focuses on how to maintain or enhance the existing social, environmental and economic values of the region. A number of possible solutions to achieve these goals are identified, including greater use of recycled water and other alternative water sources; increased resource recovery; use of fit-for-purpose water (e.g. use non-potable water when appropriate); implementation of urban water design principles and rural best management practices; and capping of population growth within the catchment area.

Source: Spiire, Case study: MBRC Total Water Cycle Management Strategy, <www.ewater.com.au/casestudies>.

www.ewater.com.au/casestudies


Water sensitive communities and regions

The Bridgewater Creek Wetland was constructed at Coorparoo to improve the quality of stormwater leaving this urban catchment. Brisbane City Council worked closely with the community during the project, which converted a concrete channel to an artificial wetland that treats stormwater, mitigates flooding, improves the recreational amenity of the area and provides educational and research opportunities.

Source: Healthy Waterways 2011, Bridgewater Creek Wetland, <http://waterbydesign.com.au/bridgewater-creek-wetland>.

Have your say

Do our future needs work together or do they conflict?

How do we encourage integrated catchment-based services and better long-term planning?


Catchment includes different local government areas (LGAs):• multiple water and sewerage service providers, some of which are local governments• multiple users within a single catchment.

Catchment-wide approach with LGAs acting together.

Planning and infrastructure solutions decided in isolation:• local governments focusing on their local needs• short-term planning.

New urban development happening outside designated planning areas, resulting in extra infrastructure spending on water, sewerage, transport, electricity etc.

Catchment-wide approach for integrated, long-term planning with regards to urban development, shared utilities, transport etc.

Development restricted to designated planning areas and occurs over phases.

Shared infrastructure and resource solutions:• regional alliances• shared water and sewage treatment plants.

Reliance on traditional climate-dependent water sources (e.g. rivers, groundwater).

Reliance on traditional sewage treatment and disposal methods.

Multiple service providers.

Funding obtained from various sources.

Infrastructure, including its operation, and stormwater services are funded through:

• utility charges• general rates• infrastructure charges/developer contributions• levies• federal and Queensland government grants, subsidies.

Scalable water supplies and environmental services based on a catchment-wide approach:

• light-handed regulation• water–energy connections• nutrient trading• resource recovery.

Diverse and reliable water supplies (e.g. stormwater, desalinated water, recycled water).

Uncertainty about how water and sewerage services will be funded.

Potential for stand-alone water businesses to supply services to a catchment.

Potential for a consolidated funding approach.

Now

Catchment

Integrated planning

Innovation

Funding

Future


Empowering customers

Customers need to be informed about water and sewerage services and need to be engaged about new developments, service standards and prices. They should be able to have a clear process to complain about poor services and have recourse to independent dispute resolution if required.

Customers in larger urban centres may be able to read their meters and submit that reading online to their service provider. They may be able to select a service and payment plan that best suits their needs. This could also include more frequent billing or meter readings. How often we receive our water bills can also influence our water consumption through greater awareness. It also helps us to more quickly detect any leaks.

As demand for water increases, sources such as desalinated water, recycled water and stormwater need to be considered as substitutes. All of these are currently used in Queensland. These sources improve water reliability but are expensive. This cost will need to be spread across the community and other users. Water use comparisons, costs of water and pricing structure are critical to help households make informed decisions and encourage smarter use of water.

Currently, most tenants are not required to pay for their water and sewerage services—these are generally the responsibility of landlords. There are differing views within the community about whether, like electricity, tenant billing should be rolled out to all metered premises. This would allow a price signal to be passed to the user (i.e. a user sees what they use and pays for that usage). Landlords often argue that they should not be responsible for high water use and that tenants should pay at least for the consumption charge. If however, tenants do pay their water bill, they should be treated like any other customer who can complain about their bill and seek access to hardship provisions.

Energy and water metering ideas

Most households and businesses have both an electricity meter and a water meter. Some also have a gas meter. Customers pay for separate meter readings and receive separate bills. One possible future, noting that much of the technology is already available, is for customers (if they choose) to be responsible for meter reading. Customers could submit their readings at a self-service website, or email a photo of the meter read to their provider. Potentially, there could be one utility meter which could be added to as a service was required.

Community empowerment—increasing customer choice

Western Water, a Victorian service provider, is identifying ways for the customer to have more control over their water service. Options include:

• a self-service website where customers can view their water usage, a breakdown of water charges and billing history

• paperless billing so that customers can choose how their bill is delivered and register for direct debit

• a self-read metering system that allows customers to self-monitor and report on their meter readings for increased frequency of billing and smarter use of water.

Source: Western Water, Water Plan 2008–2013, appendix C.

Have your say

How can service providers improve their engagement with their consumers?


Pricing

In most of our towns and cities, water charges are made up of two parts: the access charge represents the cost of the infrastructure needed to supply water to our homes while the volumetric or consumptive charge represents the actual volume of water used. In some rural and remote communities, the access charge includes a ‘free allowance’; once this volume of water is used, an excess water charge is applied.

A significant proportion of a service provider’s revenue from supplying water comes from the fixed access charge, which is far greater than the amount charged per litre used. Therefore, if a household reduces its consumption, their water bill is unlikely to be reduced by the same percentage. Some may therefore argue that the current two-part tariff structure does not encourage or reward water-efficient behaviour.

Like water, the true cost of managing sewage disposal is not reflected in its pricing. For households there is a single sewerage access charge, regardless of the quantity generated.

Townsville City Council pricing

In 2011, Townsville City Council allowed residential customers to choose how they were charged for water. The Standard Plan, a fixed allocation model, provides a fixed allocation of water each year with volumetric charges for any excess water consumed. In the Water Watchers plan, a user pays model, customers pay an annual service charge and volumetric charges for all the water they consume.

The Water Watchers Choice has proven to be a more affordable option for customers who have a supplementary water supply or use a small volume of water (roughly 300 kL).

Source: Townsville City Council 2010, Water billing, <www.townsville.qld.gov.au/resident/water/billing>.

Have your say

In what way can water and sewerage access charges be structured to be more ‘cost reflective’ and encourage behaviour change in consumers and improved decision making of service providers?

Hardship concessions

Significant increases in the cost of living have meant that a number of consumers are experiencing difficulty paying their bills. Service providers offer varying levels of assistance, and there may be opportunities to improve the consistency of these programs or access to them.

Have your say

What improvements can be made to current hardship assistance programs to make them more uniform or consistent?

Are there opportunities to streamline the hardship application process across the different utilities (e.g. water, electricity, telephone)?

Further ideas

The previous discussion has canvassed a range of ideas and priorities to achieve our water vision. But there are many more that could be considered.

Have your say

Overall, what other changes need to occur to achieve our water vision in the:

• short term (2013–14)

• medium term (2014–19)

• long term (2019–42)?

www.townsville.qld.gov.au/resident/water/billing


Part 2 Queensland’s water sector

Water touches all aspects of our lives. We rely on water to maintain our lifestyle and economic growth, now and into the future. There is more to water than simply the end product. Decisions regarding water demand and supply, water pricing, water trading, water uses, sewage treatment, population, public and environmental health, climate, economic viability and energy use are all interrelated.

This is complicated further by the fact that in Queensland there are:

•many sources of water with different reliability and quality (including desalinated and recycled water)

•many providers of water and sewerage services

•many consumers (e.g. agriculture, mining, construction, tourism, urban users)

•many regulatory obligations managed by eight Queensland Government departments

•complex environmental pressures associated with managing water and sewage disposal

•continued advances in technology, research and innovation, often with limited uptake

•different and challenging climate conditions across the state

•different demographic patterns.

If we are to shape our water future, we must understand how water is delivered from catchments and aquifers to our towns and cities (i.e. water supply chain); how sewage is disposed of; how decisions on water supply and sewerage services are made; and how our activities affect the environment.

Our water resources

Where our water comes from

Water is found in our oceans, rivers, creeks, streams and groundwater aquifers, and moves continuously through the water cycle as illustrated below.

The water cycle

Adapted from Recycled water in Australia, <http://www.recycledwater.com.au/index.php?id=49>.

Precipitation (rain)

Run off WTP Sewage

Deep drainageGroundwater aquifer

Greywater

Industrial Amenity

DPSTP RTP

Transpiration

Irrigation

Residential

Evaporation

Recycled water

Drinkingwater

RTP = recycled water plantDP = desalination plant

STP = sewage treatment plantWTP = water treatment plant

http://www.recycledwater.com.au/index.php?id=49


In Queensland, about two-thirds of water used in our homes and by the agriculture, mining, manufacturing and commercial sectors comes from surface water supplies: our rivers, creeks and streams. The remaining third comes from aquifers such as the Great Artesian Basin.2

Queensland water sources

Although we have mainly used climate-dependent surface and groundwater sources in the past, we need to consider alternative water supplies such as recycled water, stormwater and desalinated water.

Water quality

The quality of water supplied to households differs across Queensland. Activities in the water supply catchment, including residential and non-residential activities such as agriculture and grazing, all affect the quality of the source water. This in turn influences the level of treatment and disinfection that is required to supply drinking water. In some cases, the water may be safe, but it may not look or taste pleasant. Statewide, service providers are required under legislation to monitor their drinking water quality to protect public health.

Drinking water sources in Queensland

2 The Great Artesian Basin (GAB) holds the largest groundwater reserve in Australia. Extending across 65 per cent of Queensland and covering a fifth of Australia, the GAB holds around 64 900 million megalitres of water. Around 10 per cent of the water used in Australia is sourced from the GAB; it is often used for towns and cities (urban water), and the pastoral and mining industries. Source: Department of Environment and Resource Management 2012, Water in Queensland, Queensland Government, p. 15.

Groundwater 33%

Surface water 63%

Desalinated water 1%Recycled water 3%

Groundwater 19%(artesian)

Surface water 55%

Desalinated water 2%Groundwater 24%(non-artesian)


Alternative water supplies such as stormwater or desalinated water can be used for a variety of purposes. Many islands in Torres Strait require desalinated water for their communities. In some parts of the world, such as Singapore, recycled water and desalinated water are the norm.

The benefit of these alternative supplies is that they are less affected by climate variability. However, there are costs associated with treating and transporting this water and these processes usually use a lot of energy. Inefficiencies and leaks in water distribution networks can also lead to inefficient use of energy. It follows that efficiency gains in water use will reduce energy needs, which in turn will lead to savings of water that otherwise would be used to generate power.

Taking account of water and energy use at the planning stage can increase productivity in the use of both resources. Water conservation can lead to energy savings and energy efficiency approaches will affect water demand.

Water reliability

A reliable water supply is important to all of us. Climate variability, the condition of infrastructure and lack of skilled staff can affect the reliability of supply. Floodwaters can inundate treatment plants and pipes, affecting both the quality and reliability of the water supply. Drought can lead to seasonal or prolonged water shortages.

The South East Queensland millennium drought saw water restrictions introduced. In other parts of Queensland, carting water or sourcing water from agriculture or other sectors to allow continued supply to townships may be viable options. But for a few parts of the state, not enough water is supplied to maintain health and wellbeing.

Although households can work towards reducing their water use, it is important to recognise that not all parts of Queensland can make big reductions, due to their local climate or lifestyle needs (e.g. evaporative air conditioners and dust suppression).

Greater pressure will be placed on our water resources as our population and economy grows. In order to address this, the government’s water resource planning process and regional water supply strategies identify the volumes available for use and potential long-term solutions to meet growing water needs.

Sewage management

Our day-to-day activities all generate waste that needs to be disposed of. In urban Queensland, household wastewater (e.g. from showers, sinks and baths) and sewage are usually disposed of through the sewerage network. But in many areas, on-site septic systems are used. In extreme weather events such as flooding or cyclones, large volumes of waste can be discharged to the environment at any one time.

Waste from households and commercial premises goes to a sewage treatment plant, and is treated according to the discharge licence conditions (in terms of pollutants) before being released to the environment. The discharge licence conditions set by the Queensland Government specify the level of treatment needed before disposal.

Population size, concentration of pollutants (e.g. trade waste or household) and the receiving environment (e.g. river or ocean) determine the infrastructure and treatment required. There are significant costs associated with the collection, transport and disposal of sewage. Like water, the true cost of managing the required infrastructure is not reflected in its pricing. For households there is a single sewerage access charge, regardless of the quantity generated. Sewerage access charges can account for between 34 and 54 per cent of households’ total annual water and sewerage bill.3

3 Based on a South East Queensland household consuming an average of 200 kilolitres per annum.


Water sector participants

The table summarises the roles and responsibilities of the key participants in our water sector.

Participant Key roles/responsibilitiesFederal Government • Establishes national frameworks for:

– multi-jurisdictional water systems such as the Murray–Darling Basin and the Great Artesian Basin

– the water reform blueprint (National Water Initiative dealing with water allocation, water pricing, urban water demand and water trading)

– WELS—water efficiency labelling and standards

• Provides climate and water forecasts and water information through the Bureau of Meteorology

Queensland Government • Through eight departments, manages various aspects of the water sector including regulations, approvals and licensing

• Establishes the regulatory frameworks for:

– water and sewerage service providers (DEWS) – environmental protection and water quality, including licensing of sewage treatment plants (Environment and Heritage Protection)

•Manages the water resource planning, water sharing and trading framework (Natural Resources and Mines)

• Supports the regional water planning process to provide water for current and future needs (DEWS)

Queensland Competition Authority

• Investigates and reports on the pricing practices of certain declared monopoly or near monopoly business activities of the Queensland Government and local governments at the direction of the Premier and Treasurer (the Ministers)

• Receives, investigates and reports to the Ministers on competitive neutrality complaints

Energy and Water Ombudsman Queensland

• Considers small customer disputes relating to water services in South East Queensland

Local governments • Plan and manage facilities and services for the community

• Provide a wide range of services, including water supply and sewage treatment (as water and sewerage service providers)

Water service providers • Supply water to their customers

• Sets the levels of service, including the price of water

•Manage and maintain their water service infrastructure

• Plan for current and future water supply needs (including new supplies or augmenting existing supplies)

• Comply with federal and Queensland government regulation or commitments

• Build skills and capacity and maintain financial sustainability

Sewerage service providers • Collect, treat and dispose of sewage

• Sets the levels of service, including the sewerage access charge

•Manage and maintain their sewerage infrastructure

• Comply with government regulation

• Build skills and capacity, and maintain financial sustainability

Consumers/industry • Create a market for water supply and sewerage services

• Expect certain levels of service from service providers

• Pay for water and sewerage services

Industry peak bodies • Advise and advocate on behalf of water sector stakeholders

Research organisations • Provide information on current and emerging issues and trends

• Develop new water and sewage management technologies


Service providers

Queensland’s water sector is diverse. There are around 162 registered water and sewerage service providers across Queensland—most of which are small and located outside South East Queensland. Service providers range from large utilities in South East Queensland serving around 1.3 million customers to small councils in rural and remote areas serving fewer than 150 customers. Service providers include local governments; government-owned corporations; water boards; drainage boards; bore water boards; statutory bodies; and private companies.

There are 79 drinking water service providers across Queensland—mostly local governments. They provide treated drinking water for household and other urban uses. Drinking water and non-potable water is supplied primarily through a piped water network.

Service providers4 are responsible for operating the storages that collect water from rivers or groundwater aquifers; treatment plants that treat the water to suit the end use; and pipes and other infrastructure used to deliver water to the customer. Service providers make day-to-day decisions about water supply; water quality; infrastructure maintenance and upgrades; provision of sewerage services; collection, treatment and disposal of sewage; and the price of their services.

Service provider challenges

Most service providers face common challenges including:

•climate variability (droughts, floods, extreme events) and its effects on water supplies and sewerage services

•complex regulatory obligations and requirements covering water supply and sewage disposal

•service-focused water supply and sewerage management as opposed to catchment-based or regional management

• limited skills, capacity and resources, including limited number of technical staff and locally trained officers and competition from other community facilities and services for resources.

4 Some households and businesses in parts of Queensland rely on private water supplies such as rainwater tanks or bores. These households and businesses are responsible for making sure their water supply is clean and safe. Some local governments, however, have regulatory responsibilities under the Public Health Regulation 2005 and the Food Act 2006 relating to these private water supplies.

Organisational size –skills, capacity,financial base

Local issues –roads, amenity

Legislativeframework

Climate variability(changing weatherpatterns increaserunoff or erosion)

Research anddevelopment

Newland use

activities/development New/recycled

water sources

Stormwater

Trade wastesewerage

Levels ofservice

Customers’ability to pay

Customerexpectations

and knowledgeof sector

Serviceprovider

Existing catchmentactivities – urban

development,agricultural activities,

mining etc.


Consumers

Households

Households in towns and cities are the second largest users of water after agriculture. In 2008–09, Queensland households consumed 308 gigalitres, or 308 billion litres of water.

Queensland water consumers

Source: ABS 2010, Cat. 4160.0.

In our homes, most water is used for purposes other than consumption (i.e. drinking). The diagram below shows how much water is used in a typical home in South East Queensland.

Household water use, South East Queensland

Source: Beal et al. 2011, ‘South East Queensland residential end use study’, Journal of the Australian Water Association, vol. 38, no. 1.

Agriculture 62.4%

Mining 3.7%

Other industries 6.8%

Manufacturing 6.0%

Forestry and Fishing 0.2%Household 11.8%

Water, electricity and gassupply production 9.0%

Irrigation 4%Clothes washer 22%

Bathtub 1%

Shower 29%

Leak 6%

Tap 19%

Dishwasher 2%

Toilet 17%


In 2008–09, Queensland’s per capita household consumption was well below the Australian average. Queenslanders are already being smarter about how they use water in their homes and gardens, and using water-efficient appliances.

But water is an important part of the Queensland lifestyle—in 2009, 280 500 homes had a swimming pool, or about 1 in every 6 homes. And 84 per cent of households (or 1.3 million) had a garden.

Water used in toilets, bathrooms and kitchens is collected, transported and treated along with human waste as part of the sewerage service provided to homes that are connected to a sewerage network.

Agriculture

Agriculture is the largest user of water in Queensland. The forecast agricultural production value for 2011–12 was $14.7 billion. The Queensland Government intends to double Queensland’s food production by 2040. This will mean intensifying existing areas or developing new areas, which will increase demand on water.

Allocations for agriculture are determined through the Queensland Government’s water resource planning process.

Agricultural activities rely heavily on climate-dependent surface and groundwater sources. The agriculture sector uses some alternative water sources such as recycled water, but could make greater use of these sources, depending on cost and availability.

The key water challenges facing the sector are:

•climate variability (e.g. Queensland’s high climate variability, cycles of flood and drought)

•over-allocation of water resources (e.g. the consequences of reduced water entitlements in those areas where existing water use exceeds the sustainable level)

•water security and reliability (e.g. having water available during droughts and competing with the mining and urban sectors for a reliable and secure water allocation)

•water trading (e.g. water trading markets currently exist only in priority areas; impact on agriculture from trading water permanently to other industries such as mining)

•environmental implications (e.g. addressing impacts on catchment condition associated with nutrient and sediment discharge, rising groundwater tables and salinity)

• innovative technology and research (e.g. profitability of research and development for on-farm efficiency, productivity, value adding and greater adoption of industry best practice)

•cost of water (e.g. varying ability to pay for implementing new farm management practices, new water sources and related infrastructure or compete for new entitlements)

• local service delivery capability (e.g. non-local government bulk water service provider structure).

Resources sector

The resources sector accounted for 8 per cent of Queensland’s total water consumption in 2008–09. Coal mining used 55 gigalitres, compared to 74 gigalitres for manufacturing (food, beverage, tobacco) and 41 gigalitres for metal industries. Electricity and gas used around 82 gigalitres.5

During 2009–10, the water used in the mining industry rose by 42 per cent, while water use in manufacturing fell by 6 per cent. Significant growth in the resources sector is anticipated over the next 30 years, particularly in the Galilee Basin.

Many towns and cities rely on mining to sustain their social and economic wellbeing. Continued growth relies heavily on climate-dependent surface and groundwater sources. Like the agriculture sector, alternative water sources such as recycled water, stormwater, desalinated water and coal seam gas water are yet to be fully utilised.

5 Department of Environment and Resource Management 2012, Water in Queensland, Queensland Government, p. 17.


Key challenges for this sector include:

•water security and reliability (e.g. competing with the agriculture and urban sectors to secure new water supplies)

• innovative technology and research (e.g. adopting innovative, scalable new infrastructure and technologies such as mobile water treatment, desalination water plants, re-use/recycling)

•alternative water sources (e.g. limited availability or access to alternative water supplies such as coal seam gas water, recycled water, stormwater or desalinated water)

•environmental implications (e.g. minimising the environmental footprint and effects on water quality from mine water discharges and surplus water such as from coal seam gas production)

•cost of water to the community (e.g. reducing the long-term cost on mining communities from new infrastructure solutions, such as dams or stranded water assets, once the mine closes)

•affordability (e.g. cost of funding new mining infrastructure)

•energy and water footprint (e.g. increased awareness of implications of energy use).


Next steps

The challenges facing the water sector tell us that there is an opportunity to look at:

•our regulatory framework to allow for greater flexibility, cohesion and reduced burden

• funding models and pricing structures

•organisational structure (owner versus operator) and financial stability of service providers

• incentives to innovate

•resource sharing

• investment in talent

•uptake of alternative water sources and efficiency gains.

This discussion paper focuses predominantly on service providers as the cornerstone of the water sector. However it is the environment that underpins our state’s economic growth, development and our diverse lifestyles. The quality of our water supplies and agricultural lands, the health of our ecosystems (including the health of all our waters), our resilience to climate variability—all depend on how we look after our environment and manage the environmental impacts into the future.

Managing our rivers, streams, groundwater aquifers, ecosystems and the health of our water sources to allow for continued use is everyone’s responsibility.

We must all work together—government, local councils, service providers, industry, researchers and the community—to improve how we use our water, to ensure the continued health of our water resources and environment, and to reduce our cost of living.

The opportunity now exists to shape our water future to help find the appropriate balance between growing our economy, protecting our environment and lifestyle and reducing our water and energy footprint.

Be part of the solution

Join us in shaping our water future. We invite you to provide ideas and suggestions.

This discussion paper may not have canvassed all issues that you are interested in. You can raise other issues as part of your feedback.

Please provide your feedback at:

•www.getinvolved.qld.gov.au

or

•www.dews.qld.gov.au

Submissions close on Friday 29 March 2013.

The feedback received will influence the development of the 30-year strategy for Queensland’s water sector in 2013.

www.getinvolved.qld.gov.au

www.dews.qld.gov.au

Great state. Great opportunity.

queensland’s water sector: a 30-year strategy

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