The ACT's independent regulator has urged the territory government to break up the cluster of companies that controls Canberra's power and water supplies.
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The Independent Competition and Regulatory Commission says it is surprised by the "strength of feeling" in the community about water supplier ACTEW and its half-owned electricity and gas subsidiaries ActewAGL.
The commission wants a review of the legislative framework around ACTEW and for it to be separated from the ActewAGL electricity and gas retail operations, arguing the entities are "chalk and cheese."
ACTEW's two shareholders, Chief Minister Katy Gallagher and Treasurer Andrew Barr, will meet the bosses of the water utility for a "game-changing" meeting on Monday after several weeks of controversy over the $855,000 salary paid to the corporation's managing director.
Mr Barr said on Friday that more changes would follow as the government responded to the ICRC's recommendations, which were contained in a report on water price determinations and handed to the government in February.
The commission is now consulting the public on water and sewerage prices. ICRC senior commissioner Malcolm Gray told Fairfax Media on Friday he had briefed the Ms Gallagher, Mr Barr and Water Minister Simon Corbell about the commission's recommendations in the wake of February's report.
The ICRC says ACTEW should relinquish control of the ACT government's 50 per cent share of electricity retailer ActewAGL Distribution and gas supplier ActewAGL Retail and that the assets be placed in a new wholly government-owned holding company.
It also wants an overhaul of the Territory Owned Corporations Act, especially targeting the "need for transparency", and improvements to "the performance and accountability of the ACTEW board".
An ACTEW spokesman said on Friday the utility had not completed its response to the ICRC recommendations.
"ACTEW Water is in the process of responding to the regulator on the report above," the spokesman said. "Our response will be made available to the public further to that due process."
The water corporation has been embroiled in controversy since March 20 when the government admitted ACTEW had under-reported the salary of managing director Mark Sullivan by $234,000.
Mr Gray said such far-reaching recommendations were unusual from a regulator, but he believed they were justified after a thorough study of the Canberra's water supply.
"We decided that we felt there were serious shortcomings in the present arrangements and we thought that since we had done the work, we would draw it to the attention of the government and make the recommendations," he said. "Although it's unusual in a determination of this kind to do that, we felt it was justified.
"We have briefed ministers, the two shareholders and the Minister for Water about these recommendations and the benefits we feel could accrue from adopting them."
Mr Gray said he had been surprised, during the current round of public consultation, at the level of concern in the community about ACTEW and ActewAGL.
"I knew there was disquiet - one can't live in this town without being aware of that," Mr Gray said.
"But the strength of feeling and the widespread nature of it across different sections of the community has surprised me somewhat."
Mr Barr said on Friday the government's meeting with the ACTEW board on Monday would lead to dramatic changes.
''The game will change dramatically on Monday, it will change again dramatically with the government response to the ICRC report, and we will look at the issues of governance,'' the Deputy Chief Minister said.