Any entity or legal body responsible for regulating water and/or wastewater services within a country in Europe may apply for membership or observer status within WAREG.
Any Member of WAREG may contribute to the decision-making process and participate in the works of all organisational bodies established within WAREG.
Observers are invited to participate in only the WAREG Assembly. Still, they may, on invitation, be involved in studies, projects or other works carried within WAREG, although they are not included in the decision-making process.
Any national or regional Authority with economic competencies in the drinking water and wastewater sector is welcome to apply to become a Member or an Observer.
Water Regulatory Authority (WRA) is a public and independent regulatory authority, responsible for regulating the sector of water supply and wastewater disposal and treatment in a Albania. WRA has been established and functions based on law no.8102, dated 28.03.1996, on the “Regulatory framework of the sector of water supply and wastewater disposal and treatment“, as amended. The WRA’s mission is to ensure for all consumers in Albania, that water supply and sewerage service providers deliver the highest achievable quality at a fair price and in a financially sustainable manner. Water Regulatory Authority is headed by a five member National Regulatory Commission.The objectives of WRA are the following: Encouraging efficiency and efficient use of water, urging and supporting protection of environment and quality of water, protecting the consumer interests regarding tariffs and service conditions, quality, efficiency and continuity of the service for all consumers, guarantee the rights of complaint and standards of service, transparent activity and finding a fair balance between all actors in this sector, consumers, Government and the investors.
WRA is accountable to the Parliament and to the Council of Ministers of the Republic of Albania. Each year by January 31, WRA releases its annual report on the activity of Water Regulatory Authority and the situation in the water supply and sewerage sector. WRA’s financial audit is carried out by the Supreme State Audit Office of Albania.
Regulatory Model
The Flanders Regulation Authority (Water Regulator) is established according to the Decree on water intended for human use of 24 May 2002 a as sub-entity within the Flemish Environment Agency (VMM).
It became operational in 2010. The Regulation Authority has to inventory, assess, advise and report on all matters related to water intended for human use. The regulation unit has to report annually on its activities to the Flemish Parliament, the Social and Economic Council of Flanders and the Environment and Nature Council of Flanders.
Regulated sectors
The drinking water sector = 7 public companies whom cover the entire Flemish region.
Main responsibilities
The WaterRegulator carries out the tasks assigned to it in the Water Code. Taking into account the available resources, the focus is on the tariff regulation of the drinking water component, performance and efficiency comparison of the water companies and research to provide substantiated advice on economic aspects of the drinking water supply in Flanders.
Since 2016 the water companies cannot apply a tariff-increase or introduce new tariffs for charging the costs for the production and supply of water intended for human consumption to the subscribers without the prior consent of the WaterRegulator. The tariff regulation method is laid down in the Water Code and executive regulations. In a 6-year tariff plan, each water company estimates the resources that they reasonably considers necessary to carry out the drinking water activities. Through distribution keys, these costs are translated into the maximum rates charged be allowed to subscribers in the next 6 years.
Process benchmarking is imposed by the Water Regulator. The sector have to execute and finance it. The processes to be benchmarked are captured in five-year plans. The plan is draw up in consultation with the sector and the regulation Authority. One process is benchmarked each year. The following exercises have already been performed:
The process benchmarks each contain a quantitative and a qualitative analysis.
After each benchmark, each water company draws up an action plan that it updates at least annually. In the action plan, the water company translates the recommendations from the benchmark into concrete improvement actions within its own operations and formulates concrete objectives for the studied process. In consultation with the WaterRegulator, it has been determined which minimum indicators and performances must be monitored in the action plan.
The WaterRegulator also carries out studies related to its missions on its own initiative or at the request of the Flemish government. These are often in preparation of a -spontaneous or solicited- advice.
The Regulator
Single-water sector regulator (dedicated to drinking water only)
Year of establishment: 2010
Covers all water companies (100% public)
Number of employees: 5 employees
(research) Budget: 242.000Euros (2022)
Contacts:
Vlaamse Milieumaatschappij (Flemish Environment Agency)
WaterRegulator
Dokter De Moorstraat 24-26, 9300 Aalst
T 053 72 62 10
Mail: waterregulator@vmm.be
Website: Overzicht WaterRegulator — Vlaamse Milieumaatschappij (vmm.be)
Other relevant entities (situation 2022)
Federal level (Belgium)
Regional level (Flanders)
Local level
Sector
Sector Description
The Flemish (drinking) water sector is 100% in public hands. It consist out of 7 operators of a public network and they cover the entire Flemish area. There is a big diversity in terms of size and type of organization. The smallest one is a municipally owned company, the largest one is an autonomous Flemish public authority (= serving almost 50% of the population), the rest (6) are operating as inter-municipal partnerships. In the north of Flanders a Dutch company is providing water to +/- 2.000 Flemish customers.
In 2020, 296million m³ of drinking water was supplied to subscribers by these water companies.. All distributed drinking water is standard of very high quality and is available 24h / day and 7 day / week. The drinking water sector is 100% cost recovering.
Legal and institutional framework
The largest operator of a public network is an autonomous Flemish public authority. Its legal basis is reflected in its founding decree: the decree of 28 June 1983 on the establishment of the institution ‘Vlaamse Maatschappij voor Watervoorziening’ The commercial name was changed into ‘De Watergroep’ in 2013.
The majority of the active water companies are operating as inter-municipal partnerships. Inter-municipal partnerships have their legal basis in the decree of July 6, 2001 on the application of inter-municipal cooperation. They are ‘contracting associations’, meaning partnerships with management transfer to which the participating municipalities, can delegate the implementation of one or more clearly defined competences relating to one or more functionally coherent policy areas. They are subject to (Flemish) government supervision.
All water operators have to meet all the requirements and conditions described in the Water Code, the decree of July 18, 2003 and derivative regulation.
Market Structure
Currently there are 7operators, which cover 100% of the market. All of them are subject of regulation and tariff regulation by the Regulation Authority.
Ownership and management of services.
1 municipally owned company, 1 autonomous Flemish public authority, 5 inter-municipal partnerships
Regulatory Model
Energy and Water Regulatory Commission (EWRC) is a national regulatory agency and according to its statutes, exercises regulatory functions over 4 sectors: electricity, central heating, natural gas and WSS (water supply and sanitation) services. Initially the national regulator covered only energy sector (1999 – 2005), later in 2005 the WSS services were added to its competences. The EWRC`s mission is to ensure the quality and availability of public services to consumers, balancing the interests of suppliers and consumers. EWRC`s duties in regard to WSS services sector include approving the business plans of WSS-operators and the WSS services prices; performing off- and on-site inspections over the activity of WSS-operators and out court ruling on consumers complains against WSS-operators.
Bulgaria has mandatory rule regulation model for WSS-operators with 1 national regulatory agency.
The Law on Waters and the Law on Regulation WSS services (LRWSSS) provides the main legal framework for WSS regulation in Bulgaria. The law sets 7 goals: satisfying the consumers water needs giving priority to the drinking – household water supply of the population; ensuring of accessibility, reliability and security of WSS services; increasing the quality and the efficiency of the rendered WSS services; preventing the waste waters flowing out of the sewerage network, as well as discharge of drainage waters in it out of the provided in the technological process; reducing the total water losses of water; balancing the interests of the WSS operators and of the consumers; equality between the different groups of consumers with regard to the quality and the price of the WSS services. EWRC is public administration authority (collective body of 7 members) accountable to the Government. Each year by 31 January, EWRC adopts annual report, which is presented to the Government and published on the Regulators website.
Regulated sectors
Activities encompass the natural gas, electricity including renewable energy, heating, and WSS sector. Companies, operating on the energy sector are subject of license procedure; companies operating on the water sector are subject of approval of business plans.
Energy sector: Natural Gas Sector – Gas distribution is carried out by private regional and local companies, with one public provider of natural gas and one transmission system operator. Licenses, issued by the regulator, are 28 for the activities „natural gas distribution” and “natural gas supply by end supplier”. Electrical Power – towards 2014 the sector has two segments – regulated and liberalized market, organized on a different principle: the regulated market consumers buy at regulated prices, a common mix of energy and there is no obligation to balance, until the liberalized market consumers buy at freely negotiated prices, are obliged to announce a timetable for the supply and the market is subject to balancing. The state regulator sets: production quotas for the regulated market; prices on the regulated market (between producers and public supplier NEC; between NEC and end suppliers; for network services in the transmission and distribution systems; fees: green energy, brown energy, stranded costs); and quality indicators. Important role in the market plays the Electricity System Operator, which provides the link between the regulated and liberalized sectors. Its main task is centralized operational management, control and coordination of operation modes of the power system of Bulgaria. 4 electricity distribution companies operate on the country’s territory. Central heating – heating licenses are granted by the regulator of over 20 regional district heating companies. Other licenses are issued for heating in the composition of chemical, metallurgical, food processing, petrochemical and textile industries. Most of them have plants for cogeneration of electricity and heat. Heating companies are mainly in the big cities.
WSS services sector – 64 operators are active on the WSS market up to January 2015; they cover 100% of the market and have approved business plans and tariffs by the Regulator. There is no licensing for WSS operators in Bulgaria. Currently there are regional companies (with 100% or 51% of state ownership of the capital), small municipal companies, as well as small private operators. Only one large PPP (public–private partnership) is provided in the capital of Sofia.
Main responsibilities
EWRC`s responsibilities are provided by the Law on the Energy Sector (LES) and the Law on the Regulation WSS services (LRWSSS). They are published at: http://www.dker.bg/docsen.php?d=98
Tariff Setting
Price cap tariff regulation has been applied for WSS services. There are no different tariffs for low and high water consumption, but there are different tariffs for households and business in case of sewerage and wastewater treatment services.
As regard to the prices of WSS services: average price for WSS services 0.94 €/m3, where the average price for water delivery is 0.71 €/m3; for sewerage is 0.07 €/m3; and treatment – 0.16 €/m3.
The regulator is involved actively in the process of tariff settings – the WSS-operators filed to it applications for WSS tariffs, which it reviews, may change (if necessary) and approves.
Quality of Service
The Law on Regulation on WSS services gives a frame of 15 key performance indicators (KPI) for quality of service and WSS operator effectiveness. These 15 key PI are further elaborated in 72 sub-indicators, which are part of the business plans of WSS-operators. EWRC receives annual reports on the implementation of the business plans of WSS-operators, including the PI and perform its own analyses. Some of these analyses are published on its website.
The Regulator
Year of establishment: 1999 (energy sector), 2005 (WSS sector)
Characteristics: Multi-sector regulator, Independent National Regulatory Authority; Collective body
Legal basis: LES, LRWSSS, Law on the Energy from Renewable Sources, Law on the Waters
Number of employees: total – 128 positions (7 members of commission + 121 positions for administration); WSS sector: 2 members of commission + 16 employees.
Budget: 2 million Euros (2014).
Contacts: EWRC – State Energy and Water Regulatory Commission, 8-10, Blvd Donukov, Sofia / Bulgaria
Tel: + 359 2 988 2498
Fax: + 359 2 988 8782
Email: dker@dker.bg Website: http://www.dker.bg
Other relevant entities
For the Water sector:
Ministry of Regional Development and Public Works – it is responsible for the implementation of state policy on spatial planning, coordinates the activities of central and local executive authorities, local authorities and local administration; further it is principal of WSS operators/companies with a state participation in the capital. (http://www.mrrb.government.bg/)
Ministry of Environment and Waters – it is responsible for the integrated water management in the public interest – water quantities, permits for water abstraction and discharge, activity of waste-water treatment plants (sludge disposal)– (http://www.moew.government.bg/)
Ministry of Health – the protection of public health (http://www.mh.government.bg/)
Bulgarian Water Association – non-government organization (http://www.bwa-bg.com)
For the Energy sector:
Ministry of Energy – is responsible for development of a competitive internal and external integrated market, building a reliable infrastructure, security and diversification of sources and routes of energy resources, improving energy efficiency.
Sector Description
The WSS (water supply and sanitation) service coverage of the population is 99% for the water supply; 66% for the sewerage and 50% for the wastewater treatment. Volume of activity for 2012: Abstracted water volume – 934 million m3/y (52% surface and 48% underground water); Filed water, total – 947.92 million m3 /y; Delivered water to end users – 375.44 million m3 /y; Water losses – 572.48 million m3 /y (60%); Sewage water – 570.77 million m3 /y;Wastewater treatment – 475.88 million m3 /y; Average billed consumption – 136 l/p/d; Economic and financial data – Turnover – 273,708 million Euros (2012); Average WSS service price – 0.94 €/m3 ; Average annual invoice per customer – …Euros, Employment – 16 000 Employees.
Legal and institutional framework
The current legal framework in the water sector consists of: Law on the Waters and Law on the Regulation WSS Services. Provision of water supply and sewerage services in Bulgaria is natural monopoly, subject of regulation by 4 state institutions – the Ministry of Regional Development and Public Works, the Ministry of Environment and Waters, Ministry of Health and the State Energy and Water Regulatory Commission (EWRC/State Regulator). The Council of Ministers has general competence on policy and strategy adoption. Ministry of Regional Development and Public Works Ministry is responsible for the implementation of the state policy and as a principal of WSS operators/companies with a state participation in the capital. Ministry of Environment and Waters is responsible for the integrated water management in the public interest; Ministry of Health is responsible for the protection of public health. EWRC is responsible for approving the business plans of WSS-operators and the WSS services prices; performing off- and on-site inspections over the activity of WSS-operators and out court ruling on consumers complains against WSS-operator.
Market Structure
Currently there are 64 WSS operators, which cover 100% of the market. All of them are subject of regulation and tariff approval by the Regulator.
Ownership and management of services.
The ownership and management of the WSS services is mainly in the public sector – 84% of operators. Presently 64 WSS-operators cover the whole territory of the country – 54 WSS operators are with state, municipal or both ownership. 10 WSS-operators have private ownership – 2 of them partial private ownership /respectively 77,1% and 48% private, the rest is municipal ownership/, other 8 WSS-operators have 100% private ownership.
Country profile
Main indicators of the water sector
Volume of activity for 2012:
*Abstracted water volume – 934 million m3/y (52% surface and 48% underground water);
*Filed water, total – 947.92 million m3 /y;
*Delivered water to end users – 375.44 million m3 /y; * Water losses – 572.48 million m3 /y (60%);
*Sewage water – 570.77 million m3 /y;
*Wastewater treatment – 475.88 million m3 /y; *Average consumption – 136 l/p/d;
Economic and financial data:
Turnover – 273,708 million Euros (2012);
Average WSS service price – 0.94 €/m3 ;
Average annual invoice per customer – …Euros, Employment – 16000 Employees.
Evolution
Bulgaria joined the EU beginning of 2007. The national legislation corresponds to the Acquis communautaire. The country started reform in the WSS sector with amendments of the Law on Waters in 2009. The main characteristics of this reform includes:
Regulatory Model
The Danish Water Utility Regulatory Authority is responsible for the economic regulation of the water and wastewater companies in Denmark. The economic regulation covers the approximately 300 largest companies, that supply more than 200.000 m3 water, or are owned by the municipalities.
The water sector act was adopted in 2009, and the same year the minister for the Environment created the Water Utility Regulatory Authority.
The economic regulation in the water sector act covers:
In addition the municipalities are reporting to the authority according to the Act on Municipalities sale of water and waste water companies. The authority is independent of instructions on the handling of individual cases. The authority is located in the Competition and Consumer Agency.
The costs associated with the operations and decision-making are paid by the water companies covered by the law. Each year, the agency releases its annual operational and financial report and submits it to the minister for the Environment.
Regulated sectors
The water sector encompasses 2.500 water companies of which 230 is covered by the water sector act and 100 wastewater companies, all covered by the water sector act.
Main responsibilities
The executive order of the Danish Water Utility Regulatory Authority: https://www.retsinformation.dk/Forms/R0710.aspx?id=128504
Tariff Setting
The Danish Water Utility Regulatory Authority sets annual price caps on each company. On the basis of the price caps the company sets tariffs for the following year. The tariffs must be approved by the municipality.
The Regulator
Year of establishment: 2009
Characteristics: Single-sector regulator, Independent National Regulatory Authority; Number of employees: 13 employees; Budget: 1,6 million Euros (2015).
Contacts:
Danish Competition and Consumer Authority
Carl Jacobsens Vej 35
2500 Valby
Phone: +45 41 71 50 00
Fax: +45 41 71 51 00
Mail: kfst@kfst.dk Website: www.kfst.dk
Other relevant entities
The Nature Agency (www.nst.dk) under the Ministry for Environment is responsible for drinking water quality, and for the rules regarding which activities the companies can perform.
The Ministry of the Environment (www.mim.dk) is in charge of administrative and research tasks in the area of environmental protection and planning. In Denmark the administration at state level is managed by Ministry of the Environment. At regional and local level, much of the administrative responsibility has been delegated to municipalities.
The Ministry of Business and Growth (www.evm.dk) is responsible for a number of policy areas which are important for the general business environment, including business regulation, Intellectual Property Rights, competition and consumer policy, the financial sector and shipping.
Sector Description
The Danish water sector comprises a very large number of water companies covering over great diversity in terms of size, type of ownership and organization. The approximately 2.800 public water companies are spread over some 2.500 water companies and about 300 wastewater companies.
All the municipally owned water companies covered by water sector law , while a large part of the private water companies is below the threshold of 200,000 m3 of annual water production and are therefore not covered by the Water Sector Act.
Over recent years there has been an ongoing consolidation in the water sector. In 2003 there were 4.155 public entities in the water sector spread over 2.792 water companies and 1.363 waste water companies, while there are currently about 2.500 entities in total.
Legal and institutional framework
In the Water Sector Act’s objects clause ( § 1 ) it appears that “The law should help to ensure a water and wastewater supply of high health and environmental quality, which takes into account forsy -ing safety and nature and operated in an efficient manner that is transparent to consumers.”
In the text that formed the basis for the Water Sector Act, the following terms summarized as the main elements of the agreement:
Market Structure
The activities of water supply and wastewater management are mainly divided into two types of ownership: municipally owned water companies and private – and thus consumer owned – water companies. The extent of the different forms of ownership and boundaries in relation to water sector law are shown below.
| Drinking Water | Waste Water | ||||
|---|---|---|---|---|---|
| Type of ownership | Companies | Share of water production | Type of ownership | Companies | Share of water production |
| Municipality | 87 | Ca. 67 pct. | Municipality | 97 | Approx. 98 pct. |
| Private regulated | 135 | Ca. 20 pct. | Private regulated | 0 | – |
| Private – non regualed |
Ca. 2.300 | Ca. 10 pct. | Private – non regualed |
214 | Approx. 0,5 pct. |
Ownership and management of services.
Look at the table above.
Country profile
Area – 43.000 km2; Population – 5,6 million, Population density – 250 inhab/km2; Share of urban population – 85%; Number of households – 2.749.000. (2012); Average households’ size – 2,1 (2012); GDP per capita – 37.315 EUR (2011).
Main indicators of the water sector
Extracted water volume – 288 million m3; Wastewater treated– 350 million m3; Turnover – 2 billion Euros;
Evolution
As a consequence of the regulation tariffs are stabilized, more or less. Before the regulation was implemented in 2009 prices had increased over a period of approx. 5 years. Since 2009 investments, especially in waste water utilities, have increased, whereas operating expenses have fallen for both drinking and waste water utilities. The same development is expected in the short run. In the long run, the rate of the reduction in operating expenses is expected to decrease, and as a consequence there will be more focus on reducing cost of investments.
Regulatory Model
The Estonian Competition Authority (ECA) is a government agency, which operates within the area of government of the Ministry of Ministry of Justice, has a directing function and which exercises state supervision and applies enforcement powers of the state on the bases to the extent prescribed by law.
The ECA conducts state surveillance and issues precepts, for the performance of obligations, specified by law, in the sphere of competition, fuel and energy, public water supply and sewerage system, railway, airport and postal communication. ECA rights and obligations in terms of drinking water supply and wastewater treatment sectors regulation are defined in the Public Water Supply and Sewerage Act (ECA rights entered into force 01.11.2010; https://www.riigiteataja.ee/en/eli/505022015004/consolide).
Regulated sectors
The functions of the Authority are prescribed by Statutes of Estonian Competition Authority, Competition Act, Electricity Market Act, Natural Gas Act, District Heating Act, Public Water Supply and Sewerage Act, Aviation Act, Postal Act, Railways Act and encompass the natural gas, energy, electricity, district heating, water sector, railway, post and airport regulation (more or less) and overall supervision of these sectors.
Main responsibilities
The functions of the ECA are divided between main structural units: Competition Division (includes Supervisory Department and Merger Control Department), Regulatory Division (includes Water Department, District Heating Department and Department of Energy and Postal Communication).
The main functions of the Competition Division are exercising competition related supervision; control of concentrations in all economic sectors; analyzing competitive situations, counselling undertakings and raising competition related awareness. The main functions of the Regulatory Division are approving prices and methodologies of connection fees and solving problems of market participants about previous questions in different regulation areas.
Tariff Setting
Public Water Supply and Sewerage Act provides requirements for determining water price. ECA has to approve the water prices, when water company’s territory is situated in a waste water collection area with a pollution load of 2000 p.e or more (otherwise the local government has to approve the water prices).
The price of the water service has to afford water company to: 1) cover justified operational costs; 2) make investments to guarantee the sustainability of the existing public water supply and sewerage systems; 3) comply with environmental requirements; 4) comply with quality and safety requirements; 5) operate with justified profitability on the capital invested by the water company; 6) develop the public water supply and sewerage system in development areas started before 22 March 1999.
By Public Water Supply and Sewerage Act the recommended principles for calculation of prices for water services shall be prepared and disclosed on its website by the ECA and must take into account following:
Only technical losses are included in water price (commercial losses are not included).
Reasonable profit is calculated by multiplying the value of regulatory asset base (residual value of water management assets in accounting) with a justified rate of return (WACC), (assets created using EU funds are not included to the tariffs).
There are no differences in regulation of private and municipal owned water companies. Prices for water services shall not be discriminatory to different clients or groups. Prices for domestic customers (flat house or non flat house) are same to everyone, because the responsibility of water company ends at the boundary of the immovable (real estate). Between the flats water bill are shared by the condominium (not business of water company).
Quality of Service
Abstracted water volume (million m3): taken from all sources 1749,69578 million m3; Incl. used for water supply 97,55319 million m3.
Average consumption – 60 – 70 litres per person per day;
Sources of water in public water supply systems: 64% ground water; 36% surface water.
Water losses: ca 21% average.
98% of connected population are receiving drinking water that meets all the requirements (2015).
Water Act and secondary legislation on the basis of Water Act provides requirements for drinking water and wastewater treatment quality. The supplied water is safe and of a good quality, when it does not exceed the limits and specific indicators.
The municipalities are responsible for organizing water supply and wastewater collection and treatment in their administrative territory.
The Regulator
Year of establishment: 1993.
Characteristics: Multi-sector regulator, independent regulatory authority; Legal basis: Statutes of Estonian Competition Authority (last one entered into force 01.09.2015). Number of employees: approximately 46 employees (4 in water sector regulation), including 1 Director General (mandated for 5 years) and 2 Deputy Director General; Budget: 1,9 million Euros (2016).
Contacts: ECA – the Estonian Competition Authority, Auna 6, 10317 Tallinn, Estonia
Tel: +372 667 2400, Fax:+370 667 2401, Email: info@konkurentsiamet.ee Website: http://www.konkurentsiamet.ee
Other relevant entities
Local governments – responsible for municipal infrastructure – including the public water supply and sewerage development planning. Gives by a decision to a water undertaking rights to operate and approve the rules for connection and rules on use of the public water supply and sewerage systems in local area.
Ministry of the Environment – responsible for the regulation and sustainability of water resources and responsible for the regulation of environmental pollution.
Ministry of Health – establishes the requirements of quality and safety for drinking water.
Ministry of Economic Affairs and Communications – responsible for establishing regulation and the conditions of procedure for the establishment of temporary prices for water services for a water undertaking (in the cases it’s necessary).
Sector Description
In 2013, there were 59 agglomerations (waste water collection area) of more than 2000 population equivalent (p.e) and 455 agglomerations of less than 2000 p.e in Estonia. Approximately 70 water supplies (the biggest, that are situated in the waste water collection area of more than 2000 p.e) were serving more than 2000 inhabitants and the rest of them -130 water supplies (that are situated in the waste water collection area of less than 2000 p.e) were serving 50-2000 inhabitants altogether.
In 2015, 86% of Estonian population was connected to public water supply system and 83% was connected to public sewerage system.
In 2014, the water supplies sold ca 41,3 million m3 of drinking water and treated 43,5 million m3 of waste water in total.
In 2000-2015, 893 million € EU and state funds have been transferred to upgrade water management: Small Municipalities Investment programme (SMIP) carried out in 2000-2006, where 17 municipalities were involved − the total cost of the SMIP was approximately 35 million €; 2000(2004)-2006 EU programming period involved 80 municipalities − 239 million € from ISPA/Cohesion Fund allocated for water infrastructure projects; 2007-2013 EU programming period involved 84 municipalities − 469 million € allocated from Cohesion Fund for water infrastructure projects; Since 2000 the Environmental Investment Centre (EIC)* has supported water infrastructure projects with 150 million €.
Legal and institutional framework
The current legal framework in the water sector consists of: law of local governments, law of water, law of public water supply and sewerage, law of drinking water hygiene and quality standards, law of taxes for use natural resources (in line with EU directives). Local governments are responsible for public water and waste water services based on the description of the duties in the law on local self-government. Local governments also give a water undertaking approval to operate in local government area and also approve the rules for connection and rules on use of the public water supply and sewerage systems in licensed territory of a water undertaking. The Ministry of Health is responsible for controlling the quality and safety of drinking water. The Ministry of Environment is responsible for the regulation and sustainability of water resources and the regulation of environmental pollution and the water utility has to obtain the license for water supply (to take the water from nature) to perform public service. Estonian Competition Authority (ECA) controls and approves prices for water and waste water services in the waste water collection area with pollution load of 2000 population equivalent or more. ECA is the multi sector regulatory authority (government agency), accountable to the Ministry of Economic Affairs and Communications, though it’s independent in everyday work. ECA activities encompass the natural gas, energy, electricity, district heating, water sector, railway, and airport regulation (more or less) and overall supervision of these sectors.
Market Structure
Currently there are approximately 70 water undertakings (supplies the water and/or leads off the waste water through public water supply and/or sewerage facilities), that have to coordinate prices with ECA out of approximately 200 water undertakings. Water undertakings that coordinate prices with ECA, supply approximately 90 percent of total amount of water to almost 1,2 million inhabitants (as well as lead off the waste water).
Ownership and management of services.
Ownership structure: 95% companies belong to the local government, others are private ownership companies.
Country profile
Area – 45,227 km2; Population – 1,32 million (2014), Population density – 29 inhab/km2; Share of urban population – 67% (2013); Number of households – 597 thousand (2011); Average households’ size – 2,13 (2011); GDP per capita – 15 405 EUR (2015).
Main indicators of the water sector
Number of water and wastewater operators – 200;
Percentage of households served: water supply – 86%; wastewater collection and treatment – 83%; Average consumption – 60 – 100 liters per person per day; Turnover – 90 million Euros (2014); Number of consumers – 1,11 million.
Evolution
Estonia joined the European Union in the spring of 2004. Already at that time, the water legislation was in force and was overall in line with the European Union law. No major problems existed with water supply and wastewater collection in bigger cities where the majority of inhabitants were already connected to water supply and wastewater collection system. In smaller towns and country areas situation was and in some places still are different where existing water supply infrastructure was and still is old and poorly functioning and still not completely covered with public water supply and sewerage. By the time, water supply and waste water treatment investment plans have been prepared, actual investment projects started and large financial resources (including a major part from the EU funds) were used to improve and renovate public water supply and sewerage system in cities as well as in country areas.
Regulatory Model
The regulatory competences for the water sector in Greece have been assigned to the Special Secretariat for Water (SSW), which constitutes a single administrative body in the Hellenic Ministry of Environment, Energy & Climate Change. The SSW is also responsible for the development and implementation of all programs related to the protection and management of the water resources of Greece and the coordination of all competent authorities dealing with the aquatic environment. The National Policy for water resources is based on the EU provisions transposed into the national legislative framework.
In addition the SSW is competent for the submission of pricing policy proposals to the governmental decision makers (National Water Committee).
In line with its recently established responsibilities (Law 4117/2013 and JMD 322/2013), the Special Secretariat for Water is responsible for the strategic planning, development & evaluation of policy for rational and sustainable management of water services.
On this basis, a regulatory framework for costing and pricing of water and sewerage services in Greece is under development (given the absence of a single pricing policy framework at national level).
Market Structure
Water and waste water services in Greece are provided by the Municipal owned water utilities (around 130 operational companies at the moment) and municipalities (as water service providers), that serve for around 5,2 million users. They are supervised by the Municipal Board and by the General Secretary of the Region they operate (Law 1069/1980, 3463/2006 and 3852/2010). They are responsible for the operation of all kinds of activities of water and waste water services in residential centers of the country and also for planning, constructing, maintaining, operating, managing water supply and waste water systems, waste water treatment plants in the assigned areas of responsibility.
In the areas of Athens and Thessaloniki the services for over 5 million users are provided by two publicly owned companies (EYDAP S.A. and EYATH S.A.). Both of them are providers with responsibilities in water and waste water services and planning, constructing, installing, commissioning, operating, managing, maintaining, expanding water supply and waste water systems in the areas assigned by law (Law 2744/1999 and 2651/1998).
As far as water for agricultural use is concerned, services and necessary works are provided by Local Organizations who operate under the supervision of the Ministry of Rural Development and Food and the Municipal and Regional Governments. They manage over 40% of water used for agricultural purposes.
Tariff Setting
For the Municipal water and waste water companies, tariffs are set by the Board of Directors and approved by the Municipal Board. The Pricing Policy for the municipal water utilities takes into account the managerial, maintenance and infrastructure cost, while parameters such as the area and the intended use are also taken into account.
According to the recently established framework the approval of the tariffs for the two largest water companies in Greece (for Athens & Thessaloniki) has been assigned to the Minister of Economy after the proposal of the special Secretary for Water, while from July 2015 the Special Secretary for Water will be charged with that responsibility.
Quality of Service
There is not a unified regulatory framework for monitoring the quality of service provided by the market. Water utilities are obliged to comply with various national legislation, as far as quality of drinking water and waste water is concerned.
Additionally, for the two largest water companies in Greece , EYDAP SA and EYATH SA, the legal framework also includes the regulations for drinking water supply and operation of the sewerage network (Ministerial Decisions). Moreover, according to Law 3425/2005, the aforementioned water companies are obliged to compile an “Obligations towards Consumers Chart”.
The Regulator
Contacts:
Email: info.egy@prv.ypeka.gr
Website: www.ypeka.gr
Relevant Authorities:
Legal Basis: Law 4117/2013 and JMD 322/2013, Law 1218/1978, Law 2744/1999, Law 2651/1998, JMD Υ2/2600/2001
Relevant Entities
Ministry of Health: http://www.moh.gov.gr/
Ministry of Rural Development and Food: http://www.minagric.gr/
Ministry of Environment, Energy and Climate Change: http://www.ypeka.gr/
The Sector
Country:
Number of operators:
Ownership and management of services:
130 operators- municipal water utilities and the municipalities that operate as water service providers. 2 operators are owned by the state with the participation of the private sector in the Shareholder Structure an
Volume of Activity:
Regulatory Model
The Commission for Regulation of Utilities (CRU) is Ireland’s independent economic regulator with regulatory responsibilities relating to water, energy and energy safety. It was established in 1999 under the Electricity Regulation Act. The primary function of the CRU is to protect customers and safeguard the sustainability and economic viability of its regulated utilities.
Regarding water regulation, the CRU has no quality or environmental regulatory functions. These responsibilities instead rest with the Environmental Protection Agency (EPA).
The CRU is composed of four divisions headed by three commissioners and four directors. In total, the CRU employs 90 staff.
Market Structure
Irish Water (IW) was established in 2013 as the national public utility with responsibility for the provision of public water services in Ireland. Irish Water is the sole provider of water and wastewater services through the public distribution system and serves about 78% of the country’s population. In carrying out its functions, Irish Water is subject to economic regulation by the CRU, in line with the provisions set out in the Water Services (No. 2) Act 2013.
A number of small private water schemes exist outside the public system. These operate independently and are not subject to economic regulation by the CRU. Private wells and wastewater treatment systems are also not regulated by the CRU.
Tariff Setting
The CRU has the responsibility of regulating the price structure of water and wastewater services in Ireland. It carefully monitors the information, assumptions and data used by Irish Water in its submissions, engages in public consultation on proposed charges and sets tariffs accordingly.
Irish Water tariffs consist of two elements: water and wastewater. For simplicity, domestic tariffs for the two services are assumed to be equal, i.e. it is assumed that the amount of water and wastewater used by a dwelling is equal and is charged at the same level.
Irish Water was incorporated as a new utility in 2013 and, as a result, regulation of the water industry in Ireland is at an early stage of development. Prior to this, water services were provided by 34 local authorities, which charged non-domestic customers at a tariff unique to each local authority. Domestic customers were charged for water through general taxation.
Irish Water began charging non-domestic customers from 1st October 2014. Domestic water charges began on 1st January 2015. There are different tariffs for domestic and non-domestic customers and the current charges will remain in place until 31st December 2016. Domestic customers register the amount of adults that live in a dwelling and are charged accordingly. Children under the age of 18 are granted free water and wastewater services. This is administered by way of an annual allowance of 21,000 litres per year for each registered child at a dwelling.
Quality of Service
The quality of the services provided by Irish Water is monitored and reviewed by the CRU.
The CRU’s goal is to ensure a reliable supply of clean water and efficient treatment of wastewater. As economic regulator of Irish Water, the CRU must oversee the implementation of a range of customer protection measures to ensure that customers are receiving a good quality service in return for their water charges. It also monitors the revenue requirement of Irish Water to ensure that utillity has the appropriate funding to carry out its operations and to deliver the best possible service to customers..
It will monitor Irish Water’s performance in relation to the requirements of a customer handbook, which sets out the utility’s obligations to customers. This requires Irish Water to prepare a number of Codes of Practice including the Customer Terms and Conditions which underpin the agreed water charges. Irish Water has a duty to attain certain standards on continuity and reliability of supply; billing and payment facilities and procedures; customer complaints procedures and resolution of disputes.
The Regulator
Characteristics
Legal basis
The Water Services (No. 2) Act 2013
Number of employees
90 employees (15 working in the water division)
Budget
Contacts
CRU – Commission for Regulation of Utilities
The Exchange, Belgard Square North
Tallaght, Dublin 24
Ireland
Tel: + 353 1 4000 800
Email: info@cru.ie
Relevant Entities
Department of Communications, Energy and Natural Resources
Directorate for the Environmental, Community and Local Government
Irish Water
Environmental Protection Agency
The Sector
Country
Service Coverage
Number of operators
Ownership and management of services
| Ownership | Management | |||
| Pub. | Priv. | Pub. | Priv. | |
| Water | 100% | 0% | 100% | 0% |
| Wastewater | 100% | 0% | 100% | 0% |
Volume of activity
Economic and financial data (2014)
Regulatory Model
The Italian Regulatory Authority for Energy, Networks and Environment (ARERA) is the independent body which regulates, controls and monitors the electricity and gas markets and water services in Italy. Regulation by ARERA applies the following general principles, established by the founding law nr. 481 of 14 November 1995:
The Water Tariff Method established by ARERA on 27 December 2013 (Resolution 643/2013/R/idr) covers the efficient costs recognized for the delivery of the integrated water service. Since July 2014, ARERA received competences to regulate also district heating (Legislative Decree nr. 102 of 4 July 2014, adopting Directive 2012/27/EU on Energy Efficiency). Until 2012, before ARERA intervention, three methodology were in place. The new tariff method for the first regulatory period (2012-2015) is asymmetric and flexible, allowing Local Authorities to choose one out of four possible regulatory schemes, depending on the combination between objectives done by the operators and the level of investment planned by the competent Local Authority.
Regulated sectors
ARERA regulation applies to the following water and wastewater services (whether integrated or taken individually): abstraction services, conveyance and distribution of water for civil usage, sewerage and wastewater treatment or each of the individual services mentioned above, including services for extraction and multi-purpose conveyance and water treatment services for mixed residential and industrial usage.
Main responsibilities
Tariff Setting
The new Tariff Methodology in place since 27 December 2013 (Res. 643/2013/R/IDR) covers CAPEX through ex-post regulation, referring only to costs of investment that were actually realized. It applies for the 1st regulatory period (2012-15).
The competent local authorities, select 1 of the 4 regulatory schemes allowed by the ARERA in the tariff method and ask for ARERA’s approval. Once notified by the Local Authorities, ARERA approves or rejects the proposed tariff (if no proposal is received, ARERA decides on its own the tariff but with a penalty to the Local Authority).
The tariff method consists in setting a revenues limit with respect to the sum of 5 cost components defined by ARERA:
In 2015, ARERA approved tariffs for 1659 operators, referring to 43.636.247 inhabitants. These tariffs increased by 4,11% in 2014 and 4,95% in 2015, on average.
Quality of Service
ARERA identifies minimum levels of technical and commercial quality of water services, and monitors their compliance. Environmental quality (i.e. quality of water, aquatic ecosystems, degradation of productive land, etc.) is monitored by the Ministry of Environment.
Before 2012, quality of service was defined in specific agreements between the Local Authority and the Operator, based on the model provided by the Government. In January 2015 ARERA started a consultation procedure with all stakeholders in the water sector, to define minimum conditions to be included in water services supply contracts (i.e. billing, payments, disputes with customer, etc.).
The Ministry of Environment is in charge of setting minimum quality standards for drinking water.
The Regulator
Established by the law nr. 481 of 14 November 1995, with the purpose to protect the interests of users and consumers, promote competition and ensure efficient, cost-effective and profitable nationwide services with satisfactory quality levels, ARERA is a multi-sector Regulator (electricity, gas, water). The Board is composed of five members (including the President) in charge for seven years (2011-2018). In 2011 (Law 214 of 22 December 2011) the same competences and powers were extended also to water services.
ARERA is a strongly independent Authority, whose Board receives a mandate of 7 years duration (not renewable) from the Parliament (qualified majority vote of 2/3 of members of Industry Committees of both Chambers of the Parliament). Independence is recognized also by EU directives on energy.
ARERA employs 160 persons. In addition, 16 resources are available from other public authorities.
Revenues from regulated companies in the electricity, gas (0,028% of revenues of regulated companies, in 2014).
Revenues from regulated companies in water (0,025% of revenues of regulated companies, in 2014).
Contacts:
Piazza Cavour, 5 – 20121 Milano (Headquarters)
Via dei Crociferi 19 – 00187 Rome
Email: istituzionale@autorita.energia.it
Website: www.autorita.energia.it
Other relevant entities
Sector Description
The Italian water sector presents a very complex landscape. Water and wastewater treatment network is very much heterogeneous, the majority of areas are fully served by drinking water directly at home but there are some areas where home water supply is not done properly and always (some poor and rural areas). Very high technology coexists with law quality water.
The sector is highly capital-intensive and pro-investment regulation is needed, although tariff alone has not been enough to cover financial needs. Since AEEGSI took over the power to regulate water services in January 2013, a more stable legal environment is in place, investments were increased and quality of services (commercial, technical) improved.
Water infrastructures are owned by Municipalities, and face problems of maintenance (network losses). Water services can be provided by private or mixed public-private companies through a tender procedure or by a direct concession to public companies (fully owned by a municipality). Currently, most operators are public companies, but the share of private companies has been increasing in the past 2 years.
Water treatment and sewerage system cover almost entirely the territory, although there are gaps across Northern and Southern Regions.
Legal and institutional framework
Water services (abstraction, conveyance and distribution of water for civil usage, sewerage and wastewater treatment) can be provided in an integrated way (by the same operator) or separately (by different operators). Water services are organized and managed by local Authorities established in the 20 Italian Regions, that entrust services to operators by means of public tendering procedures or public concession. Local Authorities also provide the tariff for water services, after choosing one of the four possible regulatory regimes established by the Regulatory Authority for Electricity Gas and Water (ARERA).
Market Structure
The water industry in Italy is highly fragmented, with approximately 2700 operators providing water and sewerage services to a total population of 60 mln inhabitants. A few big multisector utilities hold more than 50% of the market. Unitary price of water per m3 widely varies across regions. Average consumption at the end of 2012 was 62,7 m3/inhab.
Ownership and management of services
Water services provided are the following 5 ones: collection, transportation and distribution of water for civil use and sewerage, wastewater treatment. Following a competitive public tendering procedure, services can be entrusted to private companies, mixed private-public companies (the private partner is chosen through a public competitive tender), or public in-house companies (100% controlled by a Municipality). Presently, around 75% of existing operators are municipalities or other public bodies (i.e. consortia of local governments, mountain communities), most of them concentrated in the north of Italy. Only a minority of operators (around 25%) provide all 5 types of water services.
Country profile
Area: 301,300 km2
Supplied population (2014): 60.80 mln inhab.
Population density: 202 inhab./ km2
Share of urban population: 68.4% of total population
Number of households (million): 25,4 (OECD 2011)
Average households’ size: 2,6 persons (OECD, 2011)
Yearly average GDP per capita (2013): €31,400
Main indicators of the water sector
Water supply network length: 303,645 km
Sewerage network length: 180,890 km
Volumes of water supplied (billed): 3,338,322,125 m2
Number of operators: approximately 2700
Population supplied with abstraction, treatment, distribution services: 319,378 inhab/operator
Population supplied with sewerage services: 290,345 inhab/operator
Population supplied with water treatment services: 399,275
Abstracted water volume (million m3): 7,600
Average consumption (litre/resident/day): 230
Non-Revenue Water (in %): 40% (Marques, 2010)
Turnover of the water industry: EUR 4,231 million
Water losses: around 30% (decreasing trend, in line with morphological characteristics and quality of local services)
Evolution
Before the start of water sector reform in Italy (law 36 of 3 February 1994), more than 13.000 undertakings (mostly public companies or municipalities) operated water and wastewater services in Italy, tariff was set at local level but it was not sufficient to cover all costs, investment were financed mainly by public funds (progressively decreasing), water supply was insufficient in some Regions (especially Southern Italy), water treatment and sewerage was largely inadequate, commercial quality was not guaranteed, management of water services was highly politicized (governed by municipalities). Following the reform in 1994, undertakings were drastically cut, responsibility to organize water services was given to Local public Authorities across Optimal Territorial Areas into which the Italian territory was divided, tariff was approved at local level with a principle of covering forecasted costs, a governmental body at national level was created to supervise local authorities. As a result, investment increased and quality of service improved, but globally results were below expectations, real investments were largely below effective needs, tariff did not allow operators to recover costs. The most recent reform by decree-law 201 of December 2011 transferred regulating powers to the Regulatory Authority for Electricity and Gas. A new governance has been set into place, whereby Local Authorities (established by Italian Regions) organize integrated water services, decide which legal form is adequate to entrust services (whether to private or mixed public-private companies, by means of a tendering procedure or to public companies by means of a direct public concession), and determine the local tariff on the basis of ARERA tariff methodology, which requires ARERA final approval. Since ARERA took over the regulation of the sector, additional investment have been planned by local Authorities. More specifically, operators whose tariffs have already been approved by ARERA (1659 operators, serving 43,6 mln population) plan to invest a total of € 5.1 bln in the next 4 years (2014 – 2017).
Regulatory Model
In Latvia, the entitled authority for water sector regulation is the Public Utilities Commission (PUC). PUC is institutionally and functionally independent multi-sector regulator performing regulatory functions in energy, electronic communications, post, waste disposal and water management sectors. The water management sector is regulated in areas of water production, water supply, wastewater collection, and wastewater treatment. Water quality is supervised by the Health Inspectorate of Latvia.
PUC is operating in accordance with the Law On Regulators of Public Utilities (Law). In accordance with the Law, PUC in water management sector shall perform the following functions: approve regulations on general authorization for provision of water services; register the service providers; determine the methodology for calculation of tariffs; determine the tariffs; examine disputes in the cases and in accordance with the procedures laid down in Law.
The regulation of water services is covered by the new Law on Water Management Services (Water Law), which was approved on June 18th 2015 and came into force on January 1st 2016. The purpose of Water Law is to facilitate availability of water management services which are qualitative and conforming to the environmental requirements in order to ensure service users with continuous and safe services balancing the interests of environmental protection, sustainable use of natural resources and socio-economic interests. Water Law determines the competence of public authorities in provision of availability of the water management services; general requirements and procedures for the provision and use of the water management services; rights and obligations of a service provider and service user.
Market Structure
According to Water Law and Regulation No. 1227 “Regulations Regarding Types of regulated Public Utilities” in the water management sector PUC regulates the abstraction, accumulation and preparation of water for the use until delivery to the water supply network, the water supply from the delivery site in the water supply network to the service user, the collection and drainage of wastewater to wastewater treatment plants and the wastewater treatment and drainage in surface water bodies. In accordance to the Regulations No. 1227 starting from February 27, 2015, PUC regulates (supervises and sets tariffs) only to utilities whose provided service amount exceeds 100 000 m3 per year. There are 67 regulated utilities and total sum of their provided service amount forms 95% of all service amount in Latvia provided by utilities. All utilities are municipalities owned. Water services in Riga (the capital city of Latvia) are provided by a single utility, which has a 59% share of the overall water service market.
The annual volume of services of 13 utilities (including the service provider in Riga) exceeds 500 000 m3. These companies mostly operate in large cities of Latvia and have an 82% share of the overall water service market.
According to the Water Law the municipalities set a price to respective utilities, if the volume of service provided in at least one of them represents less than 100 000 m3 per annum.
Tariff Setting
Water Management Law states that tariffs have to be determined according to normative acts, abiding principle that all service users cover all costs for water management services justified as a result of economic analysis.
Methodology for the calculation of tariffs for water management services is developed and approved by PUC. It is adopted as a legal act. The water and sewage tariffs are calculated for each water company based on its costs, plus profit margin which cannot exceed 7% of the total expenses (cost-plus regulation). The tariffs are set in euro per cubic meter and they are the same for all types of users. During a tariff evaluation and approval process, PUC verifies and analyses actual and planning costs and documents supporting such costs to ensure that only technologically and economically substantiated costs, which are necessary for efficient provision of the relevant water management service, are included in tariff.
Quality of Service
To encourage high quality of provided services, PUC in sample order organizes annual inspections of service providers. During inspections PUC examine whether merchants provide services in compliance with legal acts and requirements of general authorization.
If PUC detects any unconformity with requirements or legal acts, PUC sets a deadline for corrections. PUC also has powers to enforce execution of its decisions by issuing warnings or setting administrative penalties. Results of inspections are not published.
The Regulator
Year of establishment – 2001. Regulatory functions in the water management sector PUC took over from municipal regulator of Riga by January 1, 2008 from all others municipal regulators and municipal councils by November 1, 2009. The PUC took over regulatory functions from 17 municipal regulators.
Characteristics
Legal basis
The Law on Regulators of Public Utilities
Number of employees
PUC is established as a single regulator with the consequent administrative and management model, while complying with the requirement to establish a proper organizational structure of the executive body. PUC executive body consists of units responsible for a particular sector regulation, as well as units performing support functions (such as economic analysis, legal support, accounting and administrative units) to ensure effective supervision in regulated sectors. PUC functions in water management sector are performed by PUC Board, Water Management and Waste disposal services department (10 employees) supported by Legal and Economic analysis departments.
Contacts
PUC – Public Utilities Commission
45 Unijas Street, Riga, LV-1039, Latvia.
Phone: +371 67097200
Fax: + 371 67097277
E-mail: sprk@sprk.gov.lv
http://www.sprk.gov.lv/
Relevant Entities
Ministry of Environmental Protection and Regional Development
Operators` Association
Health Inspectorate of Latvia
The Sector
Country
Number of regulated operators
Volume of activity
Economic and financial data
Regulatory Model
Since 1st of July 2019 according to Law on Energy of the Republic of Lithuania National Commission for Energy Control and Prices (NCC) has been renamed to National Energy Regulatory Council (NERC) following the requirement of the national law stating that State Energy Inspectorate under Ministry of Energy will be reorganised by way of merger and joined to NCC. The relative amendments of the Law on Energy were approved by the Parliament on 14 February, 2019 and enter into force from 1 July, 2019. Therefore NERC is performing the economic regulation functions and those of technical regulation and control.“
National Commission for Energy Control and Prices of the Republic of Lithuania (NCC) is the multi sector regulatory authority which activities encompass the natural gas, electricity, renewable energy, heating, transport, water sectors regulation and the overall supervision of the energy sector. NCC mission is to ensure the quality and availability of public services to consumers, creating equal conditions for all market participants. The objectives of NCC are the following: to integrate into the EU‘s regulatory space and seek for effectiveness of NCC activity; to ensure predictable and transparent business environment in energy and drinking water supply and wastewater treatment sectors; to ensure protection of energy‘s and drinking water‘s consumers rights and legitimate interests. NCC is a public administration authority accountable to the Parliament of the Republic of Lithuania. Each year by May 1st, NCC releases its annual operational and financial report and submits it to the President, the Parliament and the Government of the Republic of Lithuania. Financial and operational audit is carried out by the National Audit Office of Lithuania. NCC rights and obligations in terms of drinking water supply and wastewater treatment sectors regulation are defined in the Law on Drinking Water Supply and Wastewater management. The actual version of the law was adopted in June 2014 and applicable from November 2014. The law expanded powers of NCC in drinking water supply and wastewater treatment sectors, if to compare to its previous edition (2006).
Regulated sectors
Activities encompass the natural gas, electricity, renewable energy, heating, transport, water sectors regulation and the overall supervision of the energy sector. In 2013, 1655 players were operating in the electricity market of Lithuania: 1547 of them were producers of electricity from renewable energy resources, 29 – producers using fossil fuel for electricity production, 1 entity operating the transmission network by the proprietary right, 6 entities operating the distribution networks, 5 entities performing the public supply function. Moreover, in 2013 there were 67 independent suppliers operating in the electricity market, which held the issued licenses/permits, and 25 of them were active. Thirty licenses have been issued in the natural gas sector where the NCC performed the regulation of 6 distribution system operators and 1 transmission system operator. In the heat energy sector the NCC was regulating 50 heat suppliers (33 were controlled by the municipalities, 17 were the undertakings operating on the basis of leasing (concession) agreements). 1611 physical and legal entities were producing energy from renewable energy resources and supplying it to the networks. In 2013, the number of the power plants using the renewable energy resources reached 2108, among these 89.1 percent were the solar power plants, 4,6 – the hydro power plants, 5.1 – the wind power plants. The biogas and biofuel power plants covered an insignificant share in the market structure – 0.8 and 0.4 percent, respectively. In terms of the regulation of the transport sector, NCC is adjusting the maximum level of tariffs for passenger transportation over local trains and passenger and vehicle transportation with inland water transport across the Curonian Lagoon.
Main responsibilities
NCC responsibilities are provided in point 10 of NCC Regulations http://www.regula.lt/en/Pages/regulations.aspx
Tariff Setting
Water supplier submits to the NCC the water supply and waste water management price calculation draft with the long term infrastructure development plan approved by the municipality. Then NCC reviews the price calculation draft and the investment plan and makes a decision on setting the price. After the price calculation drafts are coordinated with the NCC, they are submitted for the approval of the municipality. The prices approved by the municipalities are submitted to NCC for verification. The reasonable and benchmarked costs are taken into consideration only. Water supply service average price – 1,54 Eur per cubic meter. Average cold drinking water consumption – 60 litr. per day per capita, total water sold – 106 litr. per day per capita (2013). Cost recovery level: 100% of reasonable and benchmarked costs are recovered by the tariff.
Quality of Service
Average consumption – 60 litres per person per day;
Main source – 100% underground; Water losses – 25%
According to the Ministry of Environment, the primary waster water collection system in Lithuania complies 100 percent with the EU’s requirements, while secondary waster water cleaning has 98 percent compliance and tertiary waste water cleaning (the strictest) has 85 percent compliance. The supplied water is safe and of a good quality, does not exceed the limits and specific indicators, meets the requirements of the Hygiene Norm of Lithuania HN 24:2003 and the EU Council Directive 98/83/EC on the quality of water intended for human consumption.
The Regulator
Year of establishment: 1997
Characteristics: Multi-sector regulator, Independent National Regulatory Authority; Legal basis: Law no. XI-1888 of 2011. Number of employees: 92 employees (7 for water sector regulation), including 3 Commissioners, 1 deputy Chair and 1 Chair mandated for 5 years; Budget: 2,8 million Euros (2014).
Contacts: NCC – National Commission for Energy Control and Prices, Verkių 25C-1, LT-08223 Vilnius,
Tel: +37080020500, Fax:+37052135270, http://www.regula.lt
Sector Description
In 2013, the drinking water and waste water management undertakings provided the drinking water supply and waste water management services to 2 040 728 household customers and 34 057 subscribers/commercial customers (54.84 percent of the supplied drinking water were supplied to the household customers, 44.96 percent – to the commercial customers). Totally in 2013 the drinking water supply undertakings sold 92.1 million m3 of drinking water and treated 87.9 million m3 of waste water. The revenues of the water supply undertakings equaled 138 million Euro. In the respective period the costs incurred in providing the drinking water supply and waste water management services equaled 145.7 million Euro. The annual investments in the drinking water supply and waste water management infrastructure totaled 135,8 million Euro, from this amount 65 percent were the allocations from the European Union structural funds, the state and municipality funds in the structure of financing the investments equaled 22 percent, 13 percent were the funds of the water suppliers. Totally 661 million Euro were invested in the infrastructure in 2009–2013. At the end of 2013, the value of the tangible non-current assets of the drinking water supply and waste water management undertakings was 1.44 billion Euro: the value of the assets acquired from subsidies and grants equaled 0,71 billion Euro (49 percent of the total assets). The investments were aimed at the development of the services, improvement of the reliability of supply and the reduction of operational costs.
Legal and institutional framework
The current legal framework in the water sector consists of: Law on local self-government, Law on water, Law on drinking water and waste water management, hygiene norms, drinking water quality standards, Law on taxes for use of natural resources, acts and decrees of the National Commission for Energy Control and Prices (NCC). All these documents are in line with EU directives. The institutional framework is covering local municipalities, the Government, the NCC, environmental, consumers’ protection, health and sanitation agencies. Municipalities are responsible for public water services based on the description of the duties in the law on local self-government. Municipalities are also responsible for implementing the laws related to environmental protection, developing and implementing local environmental programs, and allocating funds for environmental protection purposes. The Ministry of Health together with the State Food and Veterinary Service is responsible for controlling the quality of drinking water. The Ministry of Environment is responsible for the regulation and sustainability of water resources and the regulation of environmental pollution. The municipal water utility has to obtain the license for performing public service. The license has to be issued by the NCC. NCC calculates and approves prices for municipal water services. NCC is the multi sector regulatory authority, accountable to the Parliament of the Republic of Lithuania. NCC activities encompass the natural gas, electricity, renewable energy, heating, transport, water sectors regulation and the overall supervision of the energy sector. NCC mission is to ensure the quality and availability of public utility services to consumers, creating equal conditions for all market participants, to ensure predictable and transparent business environment in energy and drinking water supply and wastewater treatment sectors.
Market Structure
Currently there are 78 regulated public water suppliers that coordinate prices with NCC out of almost 300 water suppliers. Water suppliers that coordinate prices with NCC, supply more than 98 percent of total amount of water to almost 2 million inhabitants. Other water suppliers supply only 2 percent.
Ownership and management of services.
Ownership structure (78 companies in water and waste water subsectors): public – 95%, private – 5%.
Country profile
Area – 65,200 km2; Population – 2,97 million, Population density – 46 inhab/km2; Share of urban population – 67% (2013); Number of households – 1327 thous. (2012); Average households’ size – 2,25 (2012); GDP per capita – 11816 EUR (2013).
Main indicators of the water sector
Number of water and wastewater operators – 300;
Percentage of households served: water supply – 84%; wastewater collection and treatment – 79%; Extracted water volume – 123 million m3; Wastewater treated– 154 million m3; Average consumption – 60 liters per person per day; Turnover – 139 million Euros; Employment – 5411 employees
Evolution
Lithuania joined the EU in the spring of 2004. Already at that time, the water legislation was in place and was in line with the European Union law (Acquis communautaire). No major problems existed with water supply and wastewater collection in bigger cities where the majority of inhabitants already connected to water supply and wastewater collection systems. Situation was different in smaller towns and settlements where existing water supply infrastructure was very old, poorly functioning and in need for renovation. No waste water treatment facilities existed in such settlements; therefore municipal waste water was a significant source of pollution of surface waters. At that time, water supply and waste water treatment investment plans have been prepared and actual investment projects started. Large financial resources (including a major part from the EU funds) were used for their implementation. Over the decade, in order to eliminate the gap between the existed and required level of municipal water and waste water sector operational and environmental indicators, the considerable amount of financial resources in the water, waste water and waste water sludge management facilities were invested. In parallel, the institutional framework, covering local municipalities, the Government, the NCC, environmental, consumers’ protection, health and sanitation agencies was continuously developing.
Regulatory Model
The Regulator for Energy and Water Services (REWS) is a public corporate body with regulatory functions regarding services relating to energy and water in the Maltese Islands. It was established by the House of Representatives through Act XXV of 2015. The Board of the Regulator for Energy and Water Services is composed of a Chairman, Deputy Chairman and three members.
Market Structure
The Water Services Corporation (WSC) was established by Act XXIII, 1991, as the public utility with overall responsibility for water resource management in Malta. The Water Services Corporation is the sole provider of potable water through the public distribution system. It is also solely responsible for collection and treatment of all wastewater through the public sewerage system. It is regulated through a licence issued under the Water Supply and Sewerage Services Regulations (Legal Notice 525 of 2004), by the Regulator for Energy and Water Services for carrying out such functions. A number of small operators are also licensed by the Regulator for Energy and Water Services to supply water using water tankers either for potable or secondary uses.
Tariff Setting
The Regulator for Energy and Water Services is responsible to regulate the price structure of water services in Malta. During the review and approval process, the Regulator verifies the information, assumptions and data used by the WSC in its submissions for tariff revisions.
Water tariffs in Malta consist of a fixed service charge and a variable charge based upon actual water consumed. Different tariffs are established for residential and non residential consumers. Vulnerable consumers are further assisted by Government through special subsidies to partially offset the actual water and electricity bills. Water tariffs were last revised with effect from 31st March 2014.
Quality of Service
The quality of the services provided by the Water Services Corporation is monitored and reviewed by the Regulator for Energy and Water Services.
A Customer Contract establishes the rights and responsibilities of customers and the levels of services to be provided by the WSC. The Customer Contract specifies inter alia potable water quality standards, water pressure and flow, standards on continuity and reliability of supply, alternative water supply arrangements; billing and payment facilities and procedures, customer complaints procedures and resolution of disputes.
The Regulator
Characteristics
Legal basis
Act XXV of 2015 – Regulator for Energy and Water Services Act (Chapter 545, Laws of Malta)
Number of employees
35 employees
Budget
2.6 million Euros (2016)
Contacts
REWS – Regulator for Energy and Water Services
Millennia, 2nd Floor,
Aldo Moro Road
Marsa, MRS 9065
Malta
Tel: + 356 2295 5000
Fax: + 356 2295 5200
Email: enquiry@rews.org.mt Website: http://www.rews.org.mt
Relevant Entities
Office of the Prime Minister – (Energy)
Ministry for Sustainable Development, the Environment and Climate Change
Ministry for Health
Directorate for Environmental Health
Water Services Corporation
Planning Authority
Environment and Resources Authority
The Sector
Country
Service Coverage
Number of operators
Ownership and management of services
| Ownership | Management | |||
| Pub. | Priv. | Pub. | Priv. | |
| Water | 100% | 0% | 100% | 0% |
| Wastewater | 100% | 0% | 100% | 0% |
Volume of activity (2014)
Economic and financial data (2014)
Regulatory Model
In Portugal, there is a regulatory agency, the Water and Waste Services Regulation Authority (ERSAR), which according to its statutes, exercises important regulatory functions over all operators of mainland Portugal in WWS and urban waste. Its primary duty is the protection of customer rights and the safeguarding of sustainability and economic viability of the systems. As a national authority, ERSAR also has the duty of monitoring and controlling the drinking water quality for all the operators in mainland Portugal. ERSAR adopted the sunshine regulation model as the main method of quality of service regulation, which is based on the published results of the performance of regulated operators. To this end, it publishes in an annual report, the performance results of operators, obtained from a set of performance indicators.More recently additional powers were attributed to ERSAR, namely in a stronger intervention in the adoption by municipalities of adequate tariff structures. Law No. 379 of 1993, Law No. 147 of 1995, and Law No. 58 of 1998 provide the main legal framework for WWS regulation in Portugal.
Market Structure
The ownership and management of the WWS is mainly in the public sector. The private sector provides WWS to less than 20% of the population. The WWS are mostly deverticalised, i.e. the wholesale and end-user systems of the WWS are provided by separate entities. In horizontal terms, the operators have a low degree of integration, and even without considering the some micro entities which operate in very small areas (some with less than 50 en-users), there are around three hundred operators for ten million inhabitants. Regarding available services, the operators almost always provide WWS together, frequently including the services of urban waste and, less frequently, other activities. There are only a limited number of operators that individually provide the service of water or wastewater.
Tariff Setting
The tariff system adopted by operators usually consists of a fixed part and a variable part based on the volume of water consumed. There are special tariffs for large families (in a small number of cases), for social service institutions and low-income customers (quite generalized throughout the country). Domestic and industrial customers are charged distinctly and there is cross-subsidisation between them. The regulator has involvement in the definition of both bulk and retail tariffs.
Quality of Service
Overall, the WWS provide a high quality of service. To encourage quality of service between the operators, ERSAR performs an annual benchmarking exercise, which analyzes compares and publishes the performance of all operators. This exercise is published in an annual report which has fostered a favourable evolution of the quality of service. Some of the aspects where improvement is more imperious are unnaccounted-for water, energy efficiacy and infrastructure rehabilitation.
The Regulator
Characteristics
Legal basis
Law no. 10 of 2014
Number of employees
66 employees
Budget
8 million Euros (2014)
Contacts
ERSAR – The Water and Waste Services Regulation Authority
Rua Tomás da Fonseca, Torre G – 8º, 1600-209 Lisboa, Portugal
Tel: + 351 210 052 200
Fax: + 351 210 052 259
Email: geral@ersar.pt
Website: http://www.ersar.pt
Relevant Entities
Portuguese Environment Agency
Operators’ Association
State Holding of Water Companies
Ministry for the Environment, Spatial Planning and Energy
The Sector
Country
Service Coverage
Number of operators
Ownership and management of services
| Ownership | Management | |||
| Pub. | Priv. | Pub. | Priv. | |
| Water | 100% | 0% | 82% | 18% |
| Wastewater | 100% | 0% | 82% | 18% |
Volume of activity
Economic and financial data
Regulatory Model
ERSARA was established in 2010, It’s an independent and regulatory authority, with financial and administrative independence.
It’s not only the Regulation authority for the drinking water supply services, urban wastewater management services and municipal waste management services, but also the Azores authority for drinking water quality
This regulatory model focuses on the structural regulation of the sector, on the regulation of the operators’ behavior and in additional regulatory activities.
Regulated sectors
This regulation applies to the following water and wastewater services:
Main responsibilities
The regulatory model developed by ERSARA focuses on the structural regulation of the sector, on the regulation of the operators’ behaviour and in additional regulatory activities.
Functions:
Tariff Setting
The tariff system usually adopted by operators consists of a fixed part and a variable part (blocks) based on the volume of water consumed.
The tariffs set should ensure an adequate return of investment and services operational costs, as well as of environment and scarcity costs. Tariffs should also ensure an acceptable contribution by users from different sectors in cost coverage.
Tariffs are approved by municipalities except in the cases where municipalities join in Grouping of municipalities, in which tariffs also need their approval.
Quality of Service
ERSARA has the aim to protect user’s interests, mainly the degree of access and the quality of the service provided; operator’s and mostly environmental sustainability.
Environmental quality (i.e. quality of water, aquatic ecosystems, degradation of productive land, etc.) is monitored by the Service of Regional Secretariat for Agriculture and the Environment.
Before 2010, quality of service was defined in specific agreements between the Autonomous Region and the Operator, based on the model provided by the Government.
The Regulator
This authority regulator was established by the following law: Regional Legislative Decree number 8/2010/A, of 5th March on 2010, It’s an independent and regulatory authority, with financial and administrative independence. Its with the purpose to protect the interests of users and consumers, promote competition and ensure efficient, cost-effective and profitable services with satisfactory quality levels.
The Board of Directors is presented with 3 chairs (including the president) and its members are nominated for four years renewable for equal amount of years. In 2014 there was a new renewal, remaining the president for another 4 years and the other two chairs with new member Directors.
Legal basis:
Regional Legislative Decree number 8/2010/A, of 5th March on 2010
Azorean Environmental Legislation.
Contacts:
Rua Filipe de Carvalho, n.º 6, Apartado 3 (Headquarters)
9900-052 HORTA
Email: ersara@azores.gov.pt
Website: www.azores.gov.pt
Other relevant entities
Sector Description
The Water and Waste Services Regulation Authority of Azores, also called ERSARA, is the public authority in charge of regulating public water supply services, urban wastewater management services and municipal waste management services.
Due to the fact that in these sectors there isn’t a competitive marketplace and the tariffs can be established in a higher level than the services itself, this authority has been carrying out its own regulation model through Azorean marketplace. Therefore, protecting the consumers is one of ERSAR’s main missions.
The water sector includes water supply to populations in both rural and urban areas as well as to economic activities. This sector also comprises urban wastewater drainage and treatment.
The waste sector comprises the collection, treatment and disposal of municipal waste.
Both are considered services of general interest, essential to the well-being of citizens, to public health, to economic activities and to environment protection.
The water and waste sector should obey a set of principles that comprehend universal access, a continuous and high standards of the quality of service and price efficiency and equity.
These services are provided by 19 operators, municipal owned.
Its financing comes from regulation fees and drinking water control fees collected from the operators.
Legal and institutional framework
Water services (abstraction, conveyance and distribution of water for civil usage, sewerage and wastewater treatment) can be provided in an integrated way (by the same operator) or separately (by different operators).
In Autonomous Region of Azores, there are several kinds of operators with only direct management: municipalities, municipalized services and associations of municipalities.
Market Structure
The water industry in Azores has 19 operators providing water and sewerage services to a total population of 245,746 inhabitants. Municipal utilities hold 100% of the market. Unitary price of water per m3 widely varies across the nine islands. Average consumption at the end of 2013 was 2522,63 per day in Azores.
Water and waste services are classified as bulk services or retail services according to the performed activities. Bulk service is related to the wholesale activity of public water supply and urban wastewater management, whereas the retail services focus only on the interaction with the end-user.
Ownership and management of services
Water services provided are the following 5 ones: collection, transportation and distribution of water for civil use and sewerage, wastewater treatment.
Country profile
Main indicators of the water sector
Volumes of water supplied (billed) (2014): 13 609 523
Number of operators: 19
Population supplied with abstraction, treatment, distribution services (2012): 324 634
Population supplied with sewerage services: 324 634
Population supplied with water treatment services: approximately 324 634
Abstracted water volume (million m3) (2014): 14 495 924;
Evolution
In March, ERSARA was created, starting its activity in April of 2010. It’s a recent Authority, with only 5 years of existence.
Since ERSARA’s creating, water quality has increasingly improved, up to almost 100% (the main goal).
Thus, we can identify two relevant periods in the regulation of the water and waste sector:
Regulatory Model
A.N.R.S.C., in conformity with the competences given by Law no. 51/2006 regarding public services, issues licenses, creates methodologies and frame regulations in the domain of public utility services within the area of settlement and for the markets of those services and monitors the way in which the legislation of these services is met and applied.
For the completion of their assignments, A.N.R.S.C. is coordinated by the Ministry of Regional Development and Public Administration, fact stated by Law no. 51/2006, art. 15.
A.N.R.S.C. conducts its activity based on the following principles: a) protecting the users’ interests in relation with the operators which act in the area of public utility services; b) promoting the competition, efficacy and efficiency in the area of public utility services which function on the basis of monopoly; c) promote the principles of transparency, accessibility, equal treatment and protection of users; d)promotes the balanced contractual relations, resultoriented; e) insures the equality of treatment and opportunities the relation with the authorities of the central and local public administration with the operators of public utility services; f) preserves the resources, the protection of the environment and the population’s health; (3) A.N.R.S.C. exercises its prerogatives of public authority in terms of equidistance and balance both in front of the users and operators and in front of the authorities of local public administration. A.N.R.S.C. exercises its abilities and attributions given by the present act in regards to all the operators, disregarding the property form or nature of capital, its organization, country of origin or organizational method, at the level of the administrative – territorial units, management of public utility services and in front of the economical agents or public institutions which have a monopoly based activity in the area of the public utility services.
Regulated sectors
ANRSC is a multi sectorial regulator for services such us: water supply; sewerage and purification used waters; sewerage and evacuation of pluvial waters; sanitation of towns; public illumination; the administration of the public and private sector of the administrative territorial; the local public transportation.
Main responsibilities
A.N.R.S.C:
Tariff Setting
No average price
The invoice is issued monthly
The cost recovery is done 100% and also there is a realistic profit part taken into consideration.
Quality of Service
Creates and establishes mandatory sector regulations of secondary and tertiary level;
Gives, modifies, suspends or takes back licenses or authorizations;
Supervises delegating procedures for public services;
Elaborates regulations for public utility services form its own area settlement;
Monitors the operators’ obedience and fulfillment of the established measures and obligations when issuing or extending the availability of a license or authorization;
Issues the specialized notice in order to establish, adjust, modify the prices and tariffs for the public utility services.
Ministry of Health is in charge with the percentage for the drinking water quality and the indicators are reported to the contract`s requests (ex. Delegation contracts).
The Ministry of Environment is in charge with the percentage for the wastewater treated and the indicators are reported to the contract`s requests (ex. Delegation contracts).
Regarding benchmarking in WWW SECTOR Romania is promoting and implementing the benchmarking on water sector at this time. Also it has been launched a programme on benchmarking, financed by BERD (European Banck of Reconstruction) with ARA (Romanian Association for Water) as beneficiary and ANRSC as designated partner.
The Regulator
Year of establishment 2002
Characteristics Multi-sector regulator, coordinated by Ministry of Regional Development and Public Administration
Share of operators regulated 1077
Number of employees 96 (besides president and vice president)
Regulator’s budget 1,227 mil EUR
Regulator’s contacts National Regulator for Public Services, www.anrsc.ro,
Stavropoleos St. 3, 4th floor, 3 sector, Bucharest, Romania.
Phone: 0040213179751
Fax: 0040213179752
Email: cabinet@anrsc.ro
Other relevant entities
Ministry of Health Ministry of Environment Ministry of Economics Ministry of Finance Customers Association and Customer Council Water Association.
Sector Description
The Romanian water and waste water market has 1077 operators. 42 are Regional operators and their share cover is 90% of the market. Among the 42 Regional operators there are 2 Private Operators Apa Nova Bucuresti and Apa Nova Ploiesti (both Veolia).
Legal and institutional framework
In order to obtain a unitary juridical framework there were established License Rules, Procedure for delegation, Organization and Function for the service, tender book, Supplying contract, Methodologies for establishing, adjusting, modifying the prices and tariffs./prices.
A.N.R.S.C., in conformity with the competences given by Law no. 51/2006 regarding public services, issues licenses, creates methodologies and frame regulations in the domain of public utility services within the area of settlement and for the markets of those services and monitors the way in which the legislation of these services is met and applied.
A.N.R.S.C.:
Law 241/2006 regarding water sector states the unitary judicial frame regarding the setting up, organization, management, financing, exploitation, monitoring and the control over the functioning of the public water supply and sewerage service.
The stipulations of this law apply to the public sewerage and water supply of villages, cities and towns, regardless of their capacity.
Market Structure
Currently there are 1077 WWS operator which cover 100% of the market.
Ownership and management of services
42 Regional Operators with state capital that exploit public WW infrastructure
132 Private operators that exploit public WW infrastructure
58 Private operators that exploit private WW infrastructure
845 Local operators (public administration) that exploit public WW infrastructure
Regional operators and local operators have 100% public capital.
Private operators have 100% privat capital.
Country profile (2011 level)
Area 238.891 km2
Population 20.121.641 inhab
Population density 84.41 inhab/km
Share of urban population 10.859.000 inhab (54%)
Number of households 8.427.941
Average households’ size 330.007.974 m2
Main indicators of the water sector (2013 level)
Number of operators per activity 1077
Percentage of hoseholds served – water supply 12.347.231 inhab, 61.9%
Percentage of households served – adequate wastewater treatment 8.883.583 inhab, 46.8%
Abstracted water volume 1.028.367 m3
Average per capita consumption 56.69/m3/inhab/y
Evolution
The existence of an unitary framework helped the evolution and the development of the water and wastewater system at national level. The investment were done for:
Regulatory Model
The Water Industry Commission for Scotland (WICS) is the economic regulator for the Scottish water industry. WICS is a non-departmental public body with statutory responsibilities to promote the interests of customers. Its primary duty is to ensure an effective regulatory framework which encourages the Scottish water industry to provide a high quality service and value for money to customers. It does so by setting prices that deliver Ministers’ quality, environmental and customer service objectives for the water industry at the lowest reasonable overall cost. Other functions include, monitoring Scottish Water’s performance, setting targets to improve efficiency and facilitating competition in the retail market for water and sewerage services including licensing all participants in the market. The Water Industry commission also works closley with the Scottish Drinking Water Quality Regulator (DWQR) and the Environmental Regulator (SEPA).
Regulated sectors
The Water Industry Commission for Scotland is a water specific regulator responsible for regulating the core activities of the national supplier ‘Scottish Water’ as well as overseeing the competitive retail market through the issuing of licenses and setting default tariffs.
Main responsibilities
WICS regulates both the prices that Scottish Water can charge to household customers and the wholesale charges paid by licensed retailers. The Water Industry Commission for Scotland also sets default tariffs which are the maximum amount licensed providers may charge customers. These maximum tariffs are set at the level at what customers would have paid in the absence of competition ensuring that no customer is worse off.
Tariff Setting
The Water Industry Commission for Scotland (WICS) sets prices using incentive-based regulation to encourage efficiencies and drive down costs.
WICS sets price caps for a period of 6 years with a rolling review every three years. Prices are set by targeting a suite of financial indicators. ‘Financial tramlines’ provide a mechanism to share any outperformance with customers , monitor financial strength and reduce risk.
WICS sets household retail charges (the amount Scottish Water charges households), non-household charges (the amount that Scottish Water charges licensed retail suppliers) and ‘default tariffs’ (the maximum that any retail licensed provider can charge business and public sector organisations) to ensure no one is ‘worse off’ as a consequence of the introduction of a competitive retail market.
Most of household customers in Scotland pay a water charge based on the council tax value of their property whilst all non-household customers are fully metered.
Cost recovery levels of tariffs
Tariffs are set on a full cost recovery basis, meaning that the fulll cost of operating, maintaining and bulding new assets is recovered through charges.
Average household bill – Approx £339
Quality of Service
The Water Industry Commission for Scotland measures the quality of Scottish Water’s service through the overall performance assessment (OPA) and benchmarks Scottish Water’s performance against that of the companies in England and Wales. This also allows WICS to set OPA targets for Scottish Water to improve service quality.
Additionally, WICS is a member of the ‘Output Monitoring Group’ which meets quarterly to review progress against ministerial objectives, monitor the delivery of Scottish Water’s investment programme and of outcomes to customers.
The overall measure of delivery (OMD) is a single comprehensive measure of Scottish Water’s overall progress with investment delivery. Both OPA and OMD are linked to Scottish Water’s management performance assessment and remuneration.
Households served by public drinking water services : 2.4 million
% drinking water quality provided complying with EU standards–
Mean zone compliance: 99.93%
Compliance at customer taps: 99.89%
% wastewater treated according to EU standards – 99.72%
The Regulator
Characteristics:
The Water Industry Commission for Scotland was established in 2005.
Water specific independent regulator
Non departmental public body
Regulates the national supplier (Scottish Water) as well as 14 licensed retailers
Legal basis:
Water Industry (Scotland) Act 2002
Water Services (Scotland) Act 2005
Climate Change (Scotland) Act 2009
Number of employees: 20
Budget
GBP 2.04 million, excl. levy on licensed operators
Contact
Water Industry Commission for Scotland (WICS)
First Floor – Moray House Forthside Way
Stirling FK8 1QZ – SCOTLAND
Email: enquiries@watercommission.co.uk
Website: www.watercommission.co.uk/
Other relevant entities
Scottish Government: www.scotland.gov.uk
The Scottish Government issues the ‘Principles of charging’ which is their statement about the principles they want the Water Commission for Scotland to apply in determining price limits and considering Scottish Water’s charges.
Scottish Environment Protection Agency (SEPA): www.sepa.org.uk
SEPA is the environmental regulator in Scotland responsible for protecting and improving the environment, including the sustainable management of natural resources.
Drinking Water Quality Regulator (DWQR): www.dwqr.org.uk
The Drinking Water Quality Regulator for Scotland (DWQR) exists to ensure that drinking water in Scotland is safe to drink. This is done by ensuring that everything Scottish Water does safeguards the quality of the public supply, through a process of inspections and monitoring. DWQR enforces the requirements of the Water Supply (Water Quality)(Scotland) Regulations 2001 and takes action where these requirements are not met.
Competition and Markets Authority (CMA): https://www.gov.uk/government/organisations/competition-and-markets-authority
The CMA works to promote competition for the benefit of consumers. They are responsible for considering regulatory references and appeals, conducting market studies and investigations in markets where there may be competition and consumer problems etc.
Citizens Advice Scotland (CAS): http://www.cas.org.uk/
Citizens Advice Scotland is a registered charity which supports Scottish Citizens Advice Bureau by providing expertise to the public on a whole range of issues.
Sector Description
In Scotland, public drinking water and sewerage services are provided by one water company, Scottish Water. Scottish Water operates within a regulatory framework established by the Scottish Parliament in which Scottish Ministers set the objectives for the industry to be delivered at least cost to customers. Scottish Water owns, operates and maintains all water and wastewater infrastructure serving around 2.4 million households across Scotland.
Service Coverage of Scottish Water
Water- 100%
Waste water – 100%
Number of operators – 1 national supplier and 18 licensed non-household retailers
Revenue of the national supplier
GBP 1080.8 million (2013-14)
Legal and institutional framework
Legislation
The legislation that is most pertinent to the Scottish water sector:
Institutional framework of the Scottish water sector
Scottish Ministers set the objectives for Scottish Water and appoint the chair and non executive members. Scottish Water is responsible for providing water and waste water services to household customers and licensed providers. It must deliver the investment priorities of Scottish Ministers within the funding allowed by the water regulator (The Water Industry Commission for Scotland). The Water Industry Commission for Scotland is the economic regulator and is responsible for setting charges subject to Scottish Ministers objectives as well as reporting on the costs and performance of Scottish Water. The Drinking Water Quality Regulator (DWQR) is responsible for protecting public health by ensuring compliance with drinking water quality regulations. The Scottish Environment Protection Agency (SEPA) ensures environmental compliance in the sector.
Market Structure
The provision of water supply and sewerage services in Scotland is a natural monopoly where one firm (Scottish Water) operates Scotland’s publicly owned network of pipes, mains and treatment works. Scottish Water provides water and wastewater services to more than 2.4 million households across Scotland. In April 2008, the water and sewerage industry in Scotland was opened up to competition. Now more than 150,000 business customers can choose their water and sewerage supplier (licensed provider) (www.scotlandontap.gov.uk). Scottish Water acts as the wholesaler in this competitive market supplying wholesale water and wastewater services to licensed providers. WICS regulates both the prices that Scottish Water can charge to household customers and the wholesale charges paid by these licensed suppliers. The Water Industry Commission for Scotland also sets default tariffs which are the maximum amount licensed providers may charge customers. These maximum tariffs are set at the level at what customers would have paid in the absence of competition ensuring that no customer is worse off.
Ownership and management of services
Scottish Water is a publicly owned water company and it provides both water and wastewater services to all households across Scotland. It is responsible for all water and wastewater infrastructure in Scotland. Licensed providers buy water from Scottish Water and sell it to business. Licensed providers are responsible for the billing and will often choose to offer additional services such as water efficiency advice and innovative billing options to customers to reduce customer bills and gain market share.
Country profile
Main indicators of the water sector
Delivered water to end users – 370.43 million l/h/d
Total leakage – 563 Ml/d
Total volume sewage water- 922.320 million Ml/d
Total load entering sewerage system BOD/yr – 146020.14 tonnes
Average consumption per person per day – 150 litres
Evolution
A brief history of water in Scotland
Pre 1975 there were 30 municipalities for waste water and many different boards for water in Scotland. In 1975 nine Scottish regional councils were set up to control public water supply and sewage disposal. Then in 1996, three new Scottish water authorities were created, East, West and North of Scotland water taking over the water and waste services from the former Scottish regional councils. In 2002 these three regional water authorities were merged to create one publicly owned company, Scottish Water. A new regulator, the Water Industry Commission for Scotland was set up to oversee the industry. At the formation of Scottish Water there was a considerable gap in terms of efficiency and levels of service compared to companies in England and Wales. Within six years, Scottish Water caught up with privately owned companies south of the border. Scottish Water’s operating costs fell by around 40 per cent in ten years and by 2012-13 household bills were around £50 lower than the average bill in England and Wales. In the same period, leakage has been reduced by over a third and drinking water quality has improved.
Recent developments
In April 2008 Scotland became the first country in the world to introduce competition into its water industry. The Water Services Act (2005) established a framework for competition and licensed suppliers can compete in the retail market for business customers. Competition has promoted an efficient use of water resources as it allows retailers to compete for customers by offering more competitive prices and seek out more cost effective and innovative ways to serve customers. Retailers are able to identify where inefficiencies exist and put pressure on Scottish Water to make improvements. Following the success of this retail market in Scotland, England and Wales will introduce retail competition which will create an Anglo-Scottish market due to open in 2017. This wider market will create more choice for business customers both in Scotland and South of the border.
Regulatory Model
In Spain, there is no National Regulatory Agency. Therefore, Spanish regulatory framework is less developed than in other countries although by law municipalities are responsible for providing drinking water and wastewater services. That implies a politic and administrative control by every municipilaty in regard to price, investments, water quality and service. Moreover, price is surveyed by Comisiones de Precios (Price Commissions) of each Autonomus Region in Spain. Additionally, according to article 30 of Decree 140/2013 (Sanition criteria for drinking water), for every drinking water system which provides more than 10 cubic meter per day, it is mandatory to send daily quality parameters to SINAC (online platform developed under Health and Consumption Ministry).
Market Structure
Water is scarce in the majority of Spain and that has implied investing in big works in order to provide water.
Municipalities are responsible for chosing amongst several water management options such as: providing service directly, joining grouping of municipalities or agreeing with a specialized company (public, public and private or private in concession). In all these cases, the municipalities own the infrastructure.
There are many operators for drinking water and waste water services but few of them sum up a big percentage of the market share. There is a high difference in specialization depending on the company size.
Only in one Autonomous Region there is a single operator that provides all water services for the whole Region. In other cases water and waste water services are provided by many different operators within the Region. Additionally there are cases in which the drinking water company provides billing service for urban waste service operator.
Tariff Setting
The tariff system usually adopted by operators consists of a fixed part and a variable part (blocks) based on the volume of water consumed. But there are many cases and differences between tariff structures and rebates. This is due to different aspects such as water scarcity, population, social and economic circumstances, …
Tariffs are approved by municipalities except in the cases where municipalities join in Grouping of municipalities or make an agreement with an Autonomous Region, in which tariffs also need their approval.
Service Quality
There is no benchmarking amongst drinking water and waste water operators. The majority of good practices in drinking water, waste waster and reused water processes and services fall upon operators.
It is remarkable that SINAC online platform gathers water quality information from almost all water providers.
The Regulator
Characteristics
Legal basis
Decree 140/2013
Laws regarding Basin Agencies
Number of employees
Budget
Contacts
Email: eorteu@magrama.es
Website: www.magrama.gob.es
Relevant Entities
Spanish Ministry of Agriculture, Food and Environment
Operators’ Association
Ministry of Health and Consumption
The Sector
Country
Service Coverage
Number of operators
Ownership and management of services
| Ownership | Management | ||||
| DW & WW | Pub. | Priv. | Pub. | Priv. | Other |
| 100% | 0% | 47% | 36% | 17% | |
Volume of activity
Economic and financial data
Sector Description
Specialized companies (public or private) are increasing their share of the market in water and wastewater services due to economic crisis, decreasing European funds, legal requirements from Europe (directives), customer demands, social context and search of efficiency.
Legal and institutional framework
In Spain, there is no National Regulatory Agency. Therefore, Spanish regulatory framework is less developed than in other countries although by law municipalities are responsible for providing drinking water and wastewater services. That implies a politic and administrative control by every municipilaty in regard to price, investments, water quality and service. Moreover, price is surveyed by Comisiones de Precios (Price Commissions) of each Autonomus Region in Spain. Additionally, according to article 30 of Decree 140/2013 (Sanition criteria for drinking water), for every drinking water system which provides more than 10 cubic meter per day, it is mandatory to send daily quality parameters to SINAC (online platform developed under Health and Consumption Ministry).
Market Structure
Water is scarce in the majority of Spain and that has implied investing in big works in order to provide water.
Municipalities are responsible for choosing amongst several water management options such as: providing service directly, joining grouping of municipalities or agreeing with a specialized company (public, public and private or private in concession). In all these cases, the municipalities own the infrastructure.
There are many operators for drinking water and waste water services but few of them sum up a big percentage of the market share. There is a high difference in specialization depending on the company size.
Only in one Autonomous Region there is a single operator that provides all water services for the whole Region. In other cases water and waste water services are provided by many different operators within the Region. Additionally there are cases in which the drinking water company provides billing service for urban waste service operator.
Ownership and management of services
| Ownership | Management | ||||
| DW & WW | Public | Private | Public | Private | Other (1) |
| 100% | 0% | 47% | 36% | 17% | |
Note 1: In Spain there is a management model very common which is called “empresa de economía mixta” (mixed economy company) with public and private participation in, usually, similar percentages.
Country profile
Main indicators of the water sector
Service Coverage
Number of operators
Volume of activity (source: INE 2012)
Economic and financial data
Evolution
In the last years water and wastewater services tariffs have increased significantly on the grounds of higher quality service achievement. Outsourcing has been boosted due to economic crisis and required specialized water and wastewater services. Water treatment plants exploitation has been developed very fast due to sanitation and waste water treatment European objectives. Also, investments have been cut back due to economic crisis ant there are some Autonomous Regions under 100% European directive compliance.
