The Commerce Commission (Commission) has published a draft decision package to introduce enduring information disclosure (ID) regulation requirements for the water sector and is seeking feedback from stakeholders. ID regulation is the foundation of the economic regulation of water services under the now fully enacted Local Water Done Well legislative reforms. A long-standing form of regulation used under Part 4 of the Commerce Act 1986 for the energy and airport sectors, ID regulation aims to promote the long-term benefit of consumers by requiring regulated suppliers to disclose specified information about their performance and subjecting this information to scrutiny by the Commission and the public.
The Local Government (Water Services Preliminary Arrangements Act) 2024 (Preliminary Arrangements Act) empowered the Commission to set foundational ID requirements for specific water service providers – this option was exercised only in respect of Wellington Water earlier this year. Now, the recently passed Local Government (Water Services) (Repeals and Amendments) Act 2025 has introduced a comprehensive economic regulation framework for water services into Part 4 of the Commerce Act, which requires the Commission to set enduring ID requirements for the water sector more broadly.
ID regulation will apply initially to water supply and wastewater services where these services are supplied by a "decision-making local government water service supplier" (defined as suppliers who make decisions regarding capital and operating expenditure and/or the level of charges or revenue recovery for their services i.e. councils and water organisations). In future, the Commission may also recommend that:
- ID regulation be extended to other suppliers of water and wastewater services (e.g. third-party providers) or to stormwater services; and
- more onerous forms of economic regulation should apply, including performance requirement regulation, quality regulation and price-quality regulation.
Any such changes must be implemented by Order in Council.
The proposed ID requirements
In its draft determination, the Commission is proposing a staggered implementation approach consisting of two levels of ID requirements:
- Basic disclosures – this would include essential information in the following initial focus areas:
- Asset management – how regulated water services suppliers plan, invest in and deliver services through their infrastructure. This includes asset management plans, strategic asset management plans and investment and delivery plans.
- Financial sustainability - whether regulated suppliers are generating enough revenue to fund long-term investment in water services. This includes capital and operating expenditure, revenue breakdowns, financing arrangements, pricing etc.
- Ring-fencing – ensuring water services revenue is spent on water services. This includes information such as statements and explanations of consistency with the ring-fencing principles, transaction details, cost and revenue allocations etc. This will be more relevant for councils that choose "in-house" delivery models and do not set up new corporate entities to provide water services.
- Additional disclosures - information that would build on the basic disclosures to provide deeper, more comprehensive insight into the sector. The Commission is considering not including these additional disclosures in this first set of ID requirements but instead introducing them at a later date.
Once disclosed, the Commission would analyse the information and publish it in a way that makes it easier to compare between regulated suppliers and see trends emerging over time. The Commission would also use the disclosed information in deciding whether or how to recommend the use of other economic regulation tools at its disposal (e.g. implementing price-quality paths).
Implementation
The Commission is required to publish its final determination on the ID requirements by 26 February 2026. Regulated suppliers will be required to begin complying with the ID requirements shortly thereafter (exact date yet to be confirmed).
Note that some of the proposed information would already be required of regulated suppliers through the planning and accountability framework under the Local Government (Water Services) Act 2025 (which includes the Water Services Strategy, annual budget and annual reports). The Commission would align the publication of the above ID requirements with these accountability documents where applicable. The required information will also build on information gathered through the water services delivery plans required under the Preliminary Arrangements Act, which all councils have now submitted to the Department of Internal Affairs for approval.
Consultation topics
In its consultation materials, the Commission is particularly seeking feedback on the following questions:
- Which of its proposed ID requirements would be costly to comply with?
- Should ID requirements be tailored to certain regulated suppliers e.g. based on scale, complexity or the risks they manage?
- Should the implementation of some ID requirements be delayed?
- What would be the use and value of the disclosed information to consumers, councils and other stakeholders and are there any gaps worth including new ID requirements, now or in future?
- Is the reporting frequency for the proposed ID requirements appropriate?
- Are any of the proposed ID requirements duplicative with existing reporting requirements or concern information already readily available?
This more comprehensive round of consultation follows the Commission's preliminary consultation on proposed ID requirements undertaken earlier this year. See our previous Insight on that consultation here.
Next steps
Consultation on the draft ID requirements is open from now until 20 October 2025, with submissions to be made via the Commission's website here.
The Commission is welcoming feedback from all stakeholders - this is a good opportunity for councils, newly formed water organisations and other interested parties to provide their input on what will become an enduring regulatory regime.
For more information, please get in touch with one of our experts below.