The state's Economic Regulator released its report on the Tasmania's water and sewerage industry this week.

It noted TasWater had increased infrastructure spending by around 40 per cent with $154 million invested in capital projects over 2017-18.

The report said the organisation had improved its financial position in that time with higher than expected revenue of $336 million.

Residential customers paid $1158 each year for services which was $114 less than interstate customers.

Tasmanian Economic Regulator Joe Dimasi said discharge water limits from sewerage plants was just below the organisation's target compliance level of 90 per cent.

"Despite this improvement, TasWater's environmental compliance levels remain relatively low and a significant number of sewage treatment plants still pose a high environmental risk," he said.

TasWater received 3237 complaints about services in 2017-18 which was up 29 per cent from the previous year.

The state's Ombudsman received 59 complaints about TasWater which was less than the previous year.

TasWater chief executive Mike Brewster said the organisation had continued to reduce operating costs while it increased investment in infrastructure across the state.

"I note the Economic Regulator's comment that TasWater's investment in infrastructure is now being reflected in compliance gains and that this looks likely to continue," he said.

Mr Brewster said the measure of 99.8 per cent of customers in receipt of water which met Australian Drinking Water Guidelines was understated as figures in the report were gathered before all boil-water alerts were removed last August.

He said the increase in drinking water complaints were over a period when systems were being upgraded to remove the alerts.

Treasurer Peter Gutwein said the report showed that TasWater's performance was limited by its aging assets though this would be improved through the government's $200 million investment to ensure $1.8 million in upgrades were delivered sooner.