68Pricing principles

68 Pricing principles

(1)  For the purposes of this Division, the following pricing principles apply in relation to the price for the provision of a regulated service:

(a) a regulated entity is to be provided with a reasonable opportunity to recover the efficient costs which the regulated entity incurs in –

(i) providing a regulated service; and

(ii) complying with a regulatory obligation or requirement or making a regulatory payment under this Act, except where this Act otherwise provides;

(b) the price is to provide for efficient pricing through –

(i) two-part pricing for water services based on the recovery of fixed costs and variable costs by way of separate charges through voluntary metering, mandatory metering or in such other manner as determined by the Regulator; and

(ii) variation between locations, regions or schemes to reflect the costs of servicing particular customers or classes of customers;

(c) the price is to provide effective incentives to promote economic efficiency, reduce costs or otherwise improve productivity with respect to a regulated service;

(d) [Section 68 Subsection (1) amended by No. 22 of 2011, s. 6, Applied:22 Jul 2011] the price is to allow for a return to the regulated entity, on assets that are required in the provision of the regulated service to which that price relates, in accordance with subsection (1A) ;

(e) to the extent that it is commercially and technically reasonable, the price charged to a particular customer or class of customers is to reflect at least the costs that are directly attributable to the provision of the regulated service to that customer or class of customers.

(1A)  [Section 68 Subsection (1A) inserted by No. 22 of 2011, s. 6, Applied:22 Jul 2011] For the purposes of subsection (1)(d) , the determination of the return to a regulated entity on assets is to take into account the following assumptions: