Annual Report 2019-20

We conduct price reviews for all Victorian water businesses. We also monitor and report on the performance of the water sector and specify standards and conditions of service that water businesses must meet.

Our year in review

Customers are our priority: the PREMO framework and price reviews

The performance, risk, engagement, management, and outcomes (PREMO) pricing framework keeps us focused on supporting Victorian customers. Our 2020 price reviews helped water businesses achieve better outcomes for customers and the business.

In June 2020, we released our final pricing decisions on South Gippsland, Western and Goulburn Murray Water. These decisions have led to customers benefitting from improved services and investment in areas they value most.

Our work in reviewing water pricing is vital to continuing to provide Victorians with high quality water service at prices that are affordable.

Our pricing framework was recognised for excellence and innovation, coming runner up for the 2019 Innovative Regulation Award at the Institute of Public Administration’s Leadership in the Public Sector Awards.

We supported businesses to assist those affected by family violence

In 2018–19, we released a review on the changes to the customer service code to help address family violence. In 2019 we released our revised edition of the better practice guide for family violence. The guide supports water and energy businesses to implement safe and effective responses to customers needing family violence assistance.

Late 2019 saw us holding workshops on our revised better practice guides, focusing on new and emerging practices. These workshops gave businesses the opportunity to:

• consolidate their understanding of safe and effective family violence assistance
• collaborate with industry partners and experts
• work through policy implementation issues.

We reported on the water sector’s performance in new and improved ways

In November 2019 we released our first outcomes report. This reporting reviews businesses’ performance against their own set targets, includes businesses’ selfassessment and our commentary on their assessments. As a requirement under our pricing framework, each business developed with their customers a set of outcome commitments, measures and targets. This report helps to keep water businesses directly accountable to their customers for the commitments they have made.

In December 2019 we released our revised annual urban water performance report which compares businesses’ performance on specific key indicators, such as billing and customer service matters. The data included in this report is independently audited and informs customers about the performance of their business relative to the water sector and overtime.

Our new and improved lines of reporting:

• keep water businesses accountable to their customers
• promotes competition between businesses and leads to improved service standards
• supports businesses and customers to engage in meaningful conversations about their water and sewerage services.

Progress report, 2019–20

Objective: Approve new prices for Western Water, South Gippsland Water and Goulburn-Murray Water, to take effect from 1 July 2020 – Status: Complete

Outputs

• Released our draft and final decision paper, price determination and customer fact sheet for Goulburn Murray Water, South Gippsland Water and Western Water price reviews.
• Held an online public forum on Goulburn Murray Water’s price review and virtual forums through Engage Vic for South Gippsland Water and Western Water price reviews.

Outcomes

• Customers have benefited from improved services, investment in areas they value most and extra support for customers facing financial hardship.

Objective: Review regulatory accounts submitted by water businesses for 2018–19– Status: Complete

Outputs

• Reviewed and approved all businesses regulatory accounts.

Outcomes

• Ensured businesses were operating within the requirements of our price determinations.

Objective: Complete annual tariff approvals for 17 water businesses– Status: Complete

Outputs

• Approved 2020–21 prices for urban water businesses and Melbourne Water.

Outcomes

• Ensure 2020–21 prices are consistent with our price determinations for each business.
• This will make sure that businesses are:
  • transparent and accountable for future price submissions
  • operating within the requirements of our regulatory codes
  • consistent with the requirements of our price determinations.

Objective: Prepare price review for Melbourne Water– Status: On track

Outputs

• Issued our guidance paper for Melbourne Water’s 2021 water price review.

Outcomes

• Clearly set out our requirements and provided support for Melbourne Water to prepare a high-quality price submission.

Objective: Release the 2018–19 urban water performance results – Status: Complete

Outputs

• Released our 2018–19 annual performance report, water business profiles and performance data

Outcomes

• Ensured water businesses are directly accountable to their customers for the services they provide and allowed customers to compare their water business’s performance relative to the whole sector.

Objective: Monitor and report on how customers rate their water business – Status: On hold

Outputs

• Published quarterly reports on how customers rate their water business on four key areas: value for money, reputation in the community, level of trust and overall satisfaction.

Objective: Release the first outcomes report – Status: Complete

Outputs

• Released the first outcomes report which includes water businesses selfassessment of their performance against their own outcomes and our commentary on our perception of how businesses performed.

Outcomes

• Ensured water businesses are directly accountable to their customers for their performance against their own set of targets.

Objective: Evaluate the effectiveness of our family violence work program – Status: Complete

Outputs

• Released a report on the outcomes of the code family violence code changes.

Outcomes

• Confirmed our code changes are supporting customers affected by family violence as intended and identified areas for improvement.

Objective: Release family violence better practice guideline – Status: Complete

Outputs

• Released our revised addition of the better practice guide.

Outcomes

• Supported water businesses (and energy businesses) to implement safe and effective family violence responses.

Environmental factors

There are several environmental factors influencing our work, including:

• a community focus on affordability and cost of living
• the community expectation that we will support low income and vulnerable customers especially given the impacts of coronavirus and the last bushfire season
• compliance with state and federal government regulations for preventing the spread of coronavirus and ensuring community safety
• government policy in relation to responding to vulnerable customers (including customers affected by family violence), and government expectations for Victorian water businesses
• the expectation we will continue to improve our approach to engagement through social media and communicating with remote water businesses
• technology change and disruption.

Cost of our water industry activities

In 2019–20, the total cost of the water team was $3.86 million. The cost includes the direct costs incurred by the team plus an allocation for overhead costs.

Measuring our success in 2020–21

Strategy objective	Objective	What outputs do we intend to produce?	What outcomes do we intend to achieve?
Objective 1	Approve new prices for Melbourne Water, to take effect from 1 July 2021.	Produce the following documents: draft decision final decision price determination customer fact sheet. These documents form the 2021 price review for Melbourne water.	To establish fair water prices and service standards for consumers. Prices that reflect customer engagement and outcomes and reflect prudent and efficient costs.
Objective 2	Complete annual tariff approvals and review regulatory accounts submitted by water businesses.	Approve 2021–22 prices for 18 regulated water businesses to ensure they do not exceed maximums set in our price determination Review and approve all water businesses’ regulatory accounts.	Businesses are: transparent and accountable for future price submissions operating within the requirements of our regulatory codes consistent with our requirements of our price determinations.
Objective 4	Monitor and report on how customers rate their water business.	We will publish quarterly reports on how customers rate their water business on four key areas: value for money, reputation in the community, level of trust and overall satisfaction.	Water businesses continue to ensure customers’ views are always front and centre in decision making.
Objective 4	Publish water performance report, outcome report and customer perception reports.	Produce an annual report, water business profiles and performance data.	Customers and stakeholders are informed on water business performance, covering customer bills, customer service, network reliability, water quality and environment. To inform Victorian consumers of the services they are receiving.
Objective 3	Publish our water outcomes report.	We will publish water businesses’ self-report on their performance against their own outcomes along with our perspective on how businesses are performing.	Water businesses are directly accountable to their customers for the services they provide and their actual performance against their own targets.
Objective 4	Review and revise the water customer codes.	Updated codes issued on 18 August 2020 to reflect the national principles for utilities and hardship. Draft Code March 2021 Final code June 2021	Low income and vulnerable customers are protected To ensure the terms and conditions of service and supply outlined in the code remain relevant.
Objective 2	Effective processes for engaging with stakeholders.	establish engagement plans for water, and local government increase engagement approaches during consultations and to announce decisions for example webinars, podcasts.	We have a clear focus for our communications strategy linked to influencing key stakeholders. Government, water corporations, local councils and the public have an increased understanding of our roles, responsibilities and objectives as a regulator.