Best practices in the definition of water services tariff structures

Cristina Landeiro Rodrigues

9th IWA World Water Congress & Exhibition

Lisbon, September 2014

Overview:

1. Water Services’ Regulation Water Services’ Principles

Regulation of Water Services in Portugal

ERSAR’s Tariff Guidelines

2. Compliance Questionnaires Compliance Questionnaires

Results

3. Conclusions and Next Steps

Best practices in the definition of water services tariff structures

Best practices in the definition of water services tariff structures

Water management systems

Economic Regulation

Water services’ principles

WASTEWATER

WATER

1. Water Services’ Regulation

Best practices in the definition of water services tariff structures

1. Water Services’ Regulation

Water management systems

Natural monopolies

Abuses of dominant position

X inefficiency

Asymmetric information

Economic efficiency

Best practices in the definition of water services tariff structures

1. Water Services’ Regulation

Water services’ principles

Universal access (PEAASAR II: 95% W & 90% WW)

Quality (Indicator AA04 – Safe water)

Continuity (Indicator AA03 - Supply failures)

Affordability (Indicator AA06 – Affordability)

Equity (Special tariff schemes for low income families

and large families)

Best practices in the definition of water services tariff structures

1. Water Services’ Regulation

Operates at national level (mainland only)

Regulates all operators (bulk & retail; concessions,

delegations and municipalities)

Has administrative and financial independence

(6M€/year – 0,7% sector’s turnover; 68 employees)

Articulates with other authorities (APA, AdC, DGS, etc.)

Promotes stakeholders’ participation (Advisory board)

Best practices in the definition of water services tariff structures

1. Water Services’ Regulation

ER

SA

R’s

Ta

riff G

uid

elin

es

Service Tariff Domestic end users Observations

Wa

ter

Fixed Two levels

For consumers with a meter exceeding

25 mm the value is equal to the non-

domestic fixed tariff

Variable Four increasing blocks

1.st block =< 5m3

5m3>2.nd block<=15 m3

15m3>3. rd block<=25 m3

4.th block > 25m3

Wa

ste

wa

ter

Fixed One level

Variable Four increasing blocks

90% of the water consumption

Blocks are equal to the ones applied in

the water services

Auxiliary Services

should only be charged when requested or in result

from breach of contract by the end-user

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

WATER

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

WASTEWATER

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

Results for water services

70%

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

Results for water services

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

Results for wastewater services

68%

Best practices in the definition of water services tariff structures

2. Compliance Questionnaires

Results for wastewater services

Best practices in the definition of water services tariff structures

3. Conclusions and Next Steps

After 5 years

Need to hasten this process: binding Tariff Code.

New process of tariff setting is being developed:

Operators’ ask ERSAR’s opinion about proposed

tariff

Municipality approves tariffs’

and justifies major dissonances with ERSAR’s opinion

Operators report approved tariffs to

ERSAR

ERSAR conducts audits to assess

tariff’s compliance

In case of a relevant breach of binding rules ERSAR may

impose corrections

Thank you for your attention

cristina.rodrigues@ersar.pt