MY ACCOUNT
STORAGE LEVELS
WATER DATA
ANNOUNCED ALLOCATIONS
RAB Irrigation Price Review
Sunwater will submit a proposal to QCA for consideration of a regulated asset base methodology for renewals recovery.
Glossary
| Annuity contribution/allowance (also see renewal funding below) | A revenue allowance to recover renewals expenditure across a 30-year period (in net present value terms) as a constant annual amount. Requires a 30-year forecast of renewals expenditure. |
| Building blocks/building blocks method | A method of determining the revenue a regulated business can earn for the services it provides. The ‘building blocks’ currently used to calculate the revenue Sunwater should earn reflect the recovery of lower bound costs and comprise operating expenditure (opex) and an annuity allowance (less any revenue offsets). It does not include any allowance for the cost of building the original scheme capital infrastructure (these allowances would be included in an upper bound context). |
| Capex | Abbreviation for capital expenditure. All expenses incurred by a business in acquiring or maintaining fixed assets, such as land, buildings, and equipment. |
| Customer and Stakeholder Project (CASPr) | A project – now closed – to replace and consolidate existing systems with an integrated solution for customer and stakeholder relationship management, water accounting and billing. |
| Consumer Price Index (CPI) | A measure of inflation. During a pricing review, various measures of CPI are used to ensure a business is compensated for uncontrollable economy-wide changes to the price of cost inputs over time. |
| Depreciation | In regulatory terms, depreciation is the allowance a business receives from its customers (via prices) to pay off the principal component of its original capital investment. It is typically calculated as the value of the original investment divided by the life of the asset. |
| Fixed price/charge (Part A/Part C) | A price charged to a customer based on the amount of Water Access Entitlement held. It is set at a level intended to recover the fixed costs associated with operating, maintaining, administering and renewing the bulk water supply scheme (Part A charges) or distribution system (Part C charges). |
| Lower bound prices | Prices that exclude any costs associated with the construction of assets before 2000. |
| Opex | Abbreviation for operating expenditure. All expenses required to run a business’s operational activities. Opex is recovered dollar-for-dollar from customer prices in the year expended, compared with capex which is recovered over the life of the asset. |
| Queensland Competition Authority (QCA) | The economic regulator in Queensland tasked with ensuring monopoly businesses do not abuse their market power. QCA does this through price setting or monitoring roles across naturally monopolistic industries like water, rail, energy and ports, ensuring prices are competitive and access is fair. |
| QCA guidance | The formal guidance issued by QCA that sets the parameters and expectations for a price submission. |
| Regulated asset base (RAB) | The current value of the regulated assets plus capital works planned for the price path period, with each capital works project depreciated according to its asset type and project life. |
| Renewal costs | Costs associated with extending the life of long-term assets. This may include preventative maintenance and/or the building of new assets. |
| Renewal funding methodology/renewal cost recovery | The method used to calculate the way renewal costs are recovered from customers. Sunwater currently applies an annuity methodology. |
| Tariffs | Prices assigned to water services provided by a public utility. |
| Target prices | Prices designed to achieve the lower bound revenue recovery. Sunwater will propose price targets for each tariff group in its price submission. |
| Transition price | Where an irrigation price is below the cost reflective price, it is referred to as a ‘transition price’. Proposed transition prices are calculated in accordance with the pricing principles set out in the Notice of Referral. Both cost-reflective and transition prices are shown for tariff groups where historical or proposed price increases trigger application of the pricing principles. Where the principles are not triggered, irrigation prices are said to be cost-reflective and no transition price applies. |
| Variable price/charge (Part B/Part D) | A price per megalitre of annual usage, intended to recover the variable costs associated with the actual delivery (usage) of water from a bulk water supply scheme (Part B charges) or distribution system (Part D charges). |
| Weighted average cost of capital (WACC) | A method of determining the rate of return a business should earn on its investments. |