Yarra Valley Water's trade waste system

Yarra Valley Water Breakfast WorkshopThursday 2 September 2010

May 2, 2023 2Yarra Valley Water Ltd

Workshop Agenda

Introduction Ian Innes-Wardell

Introduction to Trade Waste and Summary of

Review

John Dennis (Manager Trade

Waste team)

Setting the Price: How Trade Waste Prices are

determined

Maurice Hanratty (Regulatory

Economist)

Changes to parameters & pricing John Dennis

Questions

Close Ian Innes-Wardell


Trade Waste Workshop - Recent Changes & Review UpdateJohn Dennis Trade Waste Manager

Maurice Hanratty Regulatory Economist

September 2010

Thanks to today’s sponsor


Trade Waste IntroductionWhat is Trade Waste? Any liquid waste and any substance contained within it discharged to

the sewerage system from a business premise. Any industrial waste other than normal domestic sewage.

• Only trade waste which complies with specific guidelines may be discharged into the sewerage system.

Why manage Trade Waste? The 5 main tenets of trade waste management are to protect:

• The safety of workers and the public;• Wastewater system assets;• Treatment processes;• Environmental licence and regulatory compliance; • Recycling of treated wastewater and biosolids.


DSE Review of Trade Waste- Background 1

Objective: To review the trade waste management framework to reduce environmental impacts, facilitate water and biosolids recycling, and support water conservation.

Government undertook to review the Trade Waste Management Framework in Our Water Our Future. The National Water Initiative also committed each State to a review.

Review suspended in 2007 due to The Next Stage of the Water Plan, and the Victorian Competition and Efficiency Commission (VCEC) inquiry into reform of the Metropolitan Retail Water Sector.


DSE Review of Trade Waste- Background 2

Final report - Future Directions for Trade Waste Management in Victoria: A Review of Victoria’s Trade Waste Management Framework (July 2010).

• DSE contact: Stephen Jones, DSE Project Manager, 03 9412 4628.

Minister for Water, Tim Holding MP, approved implementation of next steps in the review.

DSE has developed a schedule for implementation of agreed reforms.


DSE Review of Trade Waste- Summary of Recommended Reforms 1

1. Restate objectives to facilitate recycling, & enable conflicts arising from matters of dispute.

2. Appoint the Essential Services Commission (ESC) as regulator of trade waste management.

• Develop a trade waste Code of Practice, guidelines & processes for setting prices, dispute resolution & arbitration arrangements.

3. Continue refinements in prices for treatable trade waste & encourage water businesses to consider prices on other less treatable substances (e.g. salts).

4. Improve state-wide reporting of data on trade waste & identify waste streams for reuse.


DSE Review of Trade Waste- Summary of Recommended Reforms 2

5. Require ESC to undertake periodic reviews of any new agreements that are outside published acceptance standards.

• To ensure that the agreements & their level of confidentiality remain in the public interest.

• Further transparency measures could be later considered pending ESC review outcomes.

6. Support and encourage voluntary cleaner production and other partnership programs.

7. Create a more uniform, improved and transparent set of operational arrangements across Victoria.


DSE Review of Trade Waste- Key Steps

Next 12 – 18 months: ESC develop – • Trade Waste Code of Practice.

• Guidelines & processes for setting prices, dispute resolution & arbitration arrangements.

Consultation by DSE to facilitate implementation of reforms:• With metro water businesses & regional water authorities.

• Industry consultation via AIG & PACIA.

New regulatory arrangements planned to commence on 1 January 2012.


DSE Review of Trade Waste- Main Benefits / Implications for Customers

ESC as regulator – independent dispute resolution & arbitration arrangements.

More uniformity in trade waste objectives & arrangements across Victoria.

Facilitation of recycling. ESC periodic review of new agreements that are outside published

acceptance standards to ensure the agreements & their level of confidentiality remain in the public interest.


Price setting

Prices are set on a periodic basis• Usually for five years• Current period ends June 2013

Determined by the Essential Services Commission• Overall price increase takes account of water utilities’ investment

needs and running costs• ESC also signs off on tariff proposals


Process

Water utilities (including Melbourne Water) pull together a Water Plan

The Water Plan does three main things:1. Sets out expectations• The service standards we should meet in the coming period• Our obligations• The result of customer consultation on improvements that

customers wish to see• Expected demand for services

2. The work program and cost to meet these expectations3. How the cost will be recovered from customers - prices and tariffs


The ESC’s role

The Water Plan is a public document that is submitted to the ESC

The ESC scrutinises the utilities’ proposals and publishes a draft determination• Seeks the views of the public and other stakeholders

The ESC publishes a final determination which ties the utilities to a price path and tariffs for the period


Our prices

Broadly a reflection of Melbourne Water’s bulk charges structure• MW charge us according to long-run marginal cost• Essentially the cost of augmenting treatment to cope with higher

demand Critical difference is we do not split on the basis of eastern

and western treatment plant bulk prices• We proposed this change in our Water Plan for this period (2008-13)• Rejected because of rebalancing effects at a time of high price

increases


The next Water Plan

Will set prices for the period 2013-18 Process starts in 2011 Make your views known to:

1. Yarra Valley Water2. The ESC


Changes to Parameters & associated Pricing Trade Waste charges consist of:

• application fees for new customers • an annual contract fee • discharge prices based on the strength & volume

Parameter changes & prices (as of 1 July 2010)• Total Nitrogen (TN) Total Kjeldahl Nitrogen (TKN)• Total Dissolved Solids (TDS) Inorganic Total Dissolved Solids (ITDS)BOD & SS remain unchanged

Previous Current (from 1 July 2010)

TN $1.2978 / kg TKN $1.7888 / kg

TDS $0.0131 / kg ITDS $0.0276 / kg


Changes to Parameters &associated Pricing

Nitrogen Excess nitrogen stimulates

algal / aquatic growth, affects water quality.

Nitrates and nitrites are readily processed by biological processes at Treatment Plants.

More difficult to measure TN than TKN.

Important indicator of load on N removal processes at Treatment Plants & thus a driver of future capital & operational costs.

Can be measured more accurately than TN.

CURRENTTotal Kjeldahl Nitrogen (TKN) =

Organic N + Ammonia N

PREVIOUSTotal Nitrogen (TN) =

TKN + Nitrates + Nitrites


PREVIOUS Total Dissolved Solids (TDS)

CURRENTInorganic Total Dissolved Solids (ITDS)

Changes to Parameters & associated PricingTotal Dissolved Solids Used as an indicator of salinity. High levels of dissolved solids reduces reuse potential of wastewater.

Includes organic & inorganic TDS. Organic TDS (e.g. sugars, alcohols)

more readily processed by treatment plant.

Introduction of ITDS another step in reducing salinity. A limiting factor for reuse: toxic to plants, increases water

hardness. Creates more meaningful & specific price signal vs TDS. Addresses double counting between TDS & BOD

(Biological Oxygen Demand) – another organic TDS indicator.

Industrial reuse applications driven by reductions in ITDS (sodium of lesser concern).

More industry-wide data available for ITDS vs Sodium.


Transition of contract pricing from volume to risk rank 2011/12

Currently: Contract fee is based on volume.Transition to contract fee based on risk rank.

Implications• Financial incentive for compliance.• Risk rank can change based on compliance performance, hence

contract fees can change accordingly in subsequent bills.

Planned introduction for 1 July 2011.


Transition of contract pricing from volume to risk rank 2011/12 Risk Rank 1 = Highest level of risk Risk Rank 5 = Lowest level of risk Individual scores banded to determine appropriate risk rank. Also determines site visit frequency by YVW trade waste field

staff. Risk rank score calculated dynamically by system as events

occur. Billing to be based upon score at beginning of each bill period.

Questions ?


Coming events

waterMAP progress report due Friday 5 November 2010• Ready on-line now

waterMAP progress report workshops• October 2010• Invitations will be sent soon

Business breakfast seminar• Wednesday 24 November 2010 at Kooyong Lawn Tennis Club

Yarra Valley Water's trade waste system

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