Improved Transparency And Accountability For Consumers: Commission Publishes Letter Of Expectations For Watercare

In its capacity as Crown monitor for Watercare, the Commerce Commission has today published a Letter of Expectations to help ensure Watercare delivers for Auckland consumers. The letter details what the Crown monitor will assess and report on in relation to Watercare's performance, as well as avenues for enforcement action if required.

Commission Chair Dr John Small says the Crown monitor function is critical to ensuring Aucklanders benefit from appropriate prices and services as Watercare continues to deliver a large investment programme over the next three years.

“Watercare must report on a range of measures, including how it will improve its asset management practices, along with improvements to investment planning and delivery to ensure better value for money for Aucklanders in the short and long term, and to deliver certainty to lenders.

“We will be monitoring Watercare’s performance against key service metrics. This includes how it responds to water supply interruptions and wastewater overflows, and meets leakage targets.”

The role of the Crown monitor is to monitor and report on Watercare’s performance against the Watercare Charter. Dr Small says while the Commission expects Watercare will comply with the Charter, enforcement action can be taken if Watercare does not meet its requirements around price and quality performance measures.

“We want Aucklanders to have confidence in their water provider and will be ready to take action should we identify any failure by Watercare to comply with the Charter.

“We will work carefully to balance the use of education and enforcement – from compliance advice through to court action – to help protect consumers, prevent and stop unlawful conduct, deter future non-compliance, and remedy any harm.”

Dr Small says the Commission has had open and constructive engagement with Watercare so far and expects that will continue.

The Commission will publish an annual report on Watercare’s performance by the end of this year. This will be provided to Auckland Council, the Minister of Local Government, and the Minister of Commerce and Consumer Affairs, and made available to the public via its website.

The Letter of Expectations is available to view here. 

Background

The Government has indicated the Commerce Commission will be the economic regulator for water services under the Government's Local Water Done Well (LWDW) regime. An overview of key activities and milestones for the implementation of LWDW is available on the Department of Internal Affairs website here.

The Commission is currently awaiting the Local Government Water Services Bill that will implement the full regulatory system. In the meantime, the Local Government (Water Services Preliminary Arrangements) Act 2024 enables the Commission to consult broadly on how it will shape up its potential information disclosure regime.

Crown monitor role and the Watercare Charter

The Commission will monitor and report on Watercare's performance over the next three-years of the interim economic regulatory period of the Watercare Charter. The Charter came into effect on 1 April this year. This will apply until the full economic regulatory regime is in place. The Watercare Charter focuses on service improvements, while also enabling an average of $1.3 billion of capital expenditure by Watercare annually from 2025 to 2028.

Broader economic regulation of water in New Zealand

The Crown monitor role is targeted and specific to Watercare. It is separate from the various programmes of work the Commerce Commission is currently providing to support the development of long-term regulation for water services in New Zealand as part of the Government's LWDW regime. It is also separate to the recent confirmation of the Commission’s regulatory role for Wellington Water. 

Economic regulation of Wellington Water

The Commerce Commission’s role in monitoring Wellington Water’s performance was confirmed by the Government in March 2025. Bringing Local Water Done Well forward for the Wellington region means the Commission will be able to apply early economic regulation on Wellington Water. This will be achieved via ‘foundational information disclosure’. This is a type of economic regulation that requires specified water service providers to publicly disclose information about aspects of their performance. The Commission’s disclosure requirements for Wellington Water will be targeted to help address key areas for improvement. Wellington Water will be subject to this foundational information disclosure until the enduring information disclosure regime is in place.

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