SAWRD20 Intra-period Mechanism: Stage One

Project Released: 27 Sep 2021
Project Closes: 27 Sep 2021
Contact: Vashti Maher

Overview

The current SA Water Regulatory Determination (SAWRD20) provides for an intra-period review mechanism. That mechanism sets out a process whereby SA Water can apply for additional expenditure – incurred within this regulatory period but not included within the current determination’s revenue controls – to be included in the revenue controls in the next Regulatory Determination (commencing July 2024).

However, the mechanism is of limited scope: it only applies if strict criteria are met, including that the expenditure was not reasonably foreseeable at the time the current determination was made, is major, non-discretionary and relates to robustly scoped capital expenditure that SA Water cannot fund by re-prioritising other expenditure within the current revenue cap.

Final

Final

How the intra-period mechanism works

The mechanism has two stages.

SA Water may submit proposals for stage one assessment and pre-approval based on the criteria set out in SAWRD20. No additional revenues are approved at this stage.
SA Water may submit an application in relation to any proposals that have been pre-approved at stage one, seeking inclusion of prudent and efficient expenditure in the next determination. The Commission will consult publicly before deciding whether or not it will approve the proposal.

Outcomes from stage one

The Commission has pre-approved one proposal in the Upper Spencer Gulf and proposals for two state infrastructure projects where construction will impact SA Water assets (Table 1).

_{Table 1: Stage one pre-approved proposals under the SAWRD20 intra-period project review mechanism}

Stage one pre-approved proposals
South Road Torrens to Darlington project extension
Gawler Railway Electrification project
Upper Spencer Gulf supply augmentation project

Next steps – stage two

As noted, stage one pre-approval does not guarantee that SA Water will be allowed to recover any costs associated with that proposal.

The stage two assessment will consider the prudence and efficiency of the proposal, using the criteria set out in SAWRD20. If proposed expenditure gains both stage one and stage two approval, the costs will be recoverable in SAWRD24.

SA Water may submit a stage two application for pre-approved proposals at any time prior to the commencement of the next regulatory period in 2024.

Any stage two applications received will be published on the Commission website for stakeholder review and comment.