Last resort arrangements

9The Water Industry Competition Act 2006 (WIC Act) includes provisions that ensure the continued supply of water and sewerage services in the event that a licensed retail supplier fails or becomes unviable. These provisions, referred to as retailer of last resort arrangements, are designed to protect customers and are similar to those that apply in the energy industry.

The Department of Finance and Services is currently reviewing the adequacy of the retailer of last resort (RoLR) arrangements under the WIC Act.

While there are broad provisions for a retail supplier licensee failure, the WIC Act does not have any arrangements in place that would respond to a licensed network operator failure � operator of last resort (OoLR) arrangements. Therefore the review will also consider arrangements that should be in place to address a licensed network operator failure.

The Minister for Finance and Services can declare a public utility or a licensed retailer to be a retailer of last resort. The retailer of last resort must start supplying water or providing sewerage services when the Minister declares a supply failure in relation to a licensed retail supplier. The Minister can declare a supply failure if, for example, the licensee is unable to supply water or provide sewerage services to some or all of its customers. This could occur due to the commercial failure of the retailer. The former retailer�s customers then become the customers of the retailer of last resort for these services.

Compared to retailer of last resort schemes in the energy industry, the provisions under the WIC Act lack the necessary detail of a comprehensive retailer of last resort scheme. In addition, there are no provisions that would respond to a licensed network operator failure (an operator of last resort event) or a combined failure of a network operator and retail supplier.

The Department of Finance and Services has commenced a review to:

review the adequacy of the retailer of last resort provisions under the WIC Act and identify a preferred set of arrangements
identify a preferred option for operator of last resort arrangements.

Review discussion paper

As part of the review, the Department of Finance and Services has prepared a discussion paper to generate stakeholder feedback in relation to:

the principles and objectives that should underpin a retailer of last resort and operator of last resort scheme
the issues that must be addressed in developing the detailed provisions that will make up the retailer of last resort and operator of last resort scheme.

View the Discussion Paper (PDF 279 KB).

In August 2011, over 300 stakeholders were invited to comment on the discussion paper. The Department of Finance and Services received 19 submissions from government and private agencies, which are listed below.

Aboriginal Affairs (PDF 150 KB)
Active Bio-Culture (PDF 268 KB)
AquaNet (PDF 76 KB)
City of Botany Bay (PDF 642 KB)
Degremont (PDF 658 KB)
Dubbo Council (PDF 718 KB)
Green Building Council Australia (PDF 158 KB)
Hawkesbury Council (PDF 65 KB)
Hunter Water (PDF 113 KB)
Independent Pricing and Regulatory Tribunal of NSW (PDF 971 KB)
Local Government and Shires Association (PDF 112 KB)
NSW Office of Water (PDF 296 KB)
NSW Public Works (PDF 446 KB)
Office of Environment and Heritage (PDF 657 KB)
Public Interest Advocacy Centre (PDF 618 KB)
Sydney Catchment Authority (PDF 63 KB)
Sydney Water (PDF 138 KB)
Thredbo Ski Resort (PDF 218 KB)
Tweed Shire Council (PDF 128 KB)
Water Factory Company (PDF 740 KB)

More information

For all enquiries related to the last resort arrangements, please contact the Metropolitan Water Directorate, Department of Finance and Services, on (02) 9372-8646.