Our water pricing framework puts customers at the centre of a water business's decision making.
PREMO water pricing framework
Overview
We use the PREMO water pricing framework to review pricing proposals submitted to us by Victorian water businesses.
The framework gives water businesses strong incentives to deliver better value for customers. It does this through the PREMO incentive mechanism, which focuses on five elements: performance, risk, engagement, management and outcomes. These elements form the 'PREMO' acronym.
We developed the framework based on the findings from our 2016 review of our pervious water pricing approach, and first implemented it in 2018.
We reviewed how the framework was performing
In late 2018, after the first price reviews conducted under the PREMO framework, we engaged FarrierSwier to undertake an independent review of PREMO to determine how well it delivered on its objectives. This review found PREMO contributed significantly to delivering better outcomes for customers, and through a stronger emphasis on customer engagement, better reflected customer views.
After completing the second round of PREMO price reviews in 2023 (14 businesses) and in 2024 (2 businesses), we again engaged FarrierSwier to conduct another independent review of PREMO. This most recent review confirmed the PREMO approach is still:
- highly regarded by the water sector and other stakeholders
- delivering on the original objectives by putting customers at the centre of pricing proposals.
The recent review also identified considerable variation in the understanding of these objectives and application of the PREMO pricing framework across the water sector, providing opportunities for further improvements for future price reviews. We are committed to working with Victoria's water businesses to address these opportunities.
8 August 2024
View the full FarrierSwier report on how effectively the 2023 water price review process and outcomes delivered on the PREMO objectives.
(pdf, 1.64 MB)
View our customer survey results
One of the aims of PREMO is to shift water corporations’ focus to their customers’ priorities. View our survey results of water customers across 16 state-owned urban and regional water corporations on four key areas: value for money, reputation in the community, level of trust and overall satisfaction.
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Related work
Resources
8 August 2024
View the full FarrierSwier report on how effectively the 2023 water price review process and outcomes delivered on the PREMO objectives.
(pdf, 1.64 MB)
8 August 2024
View the key findings and insights in FarrierSwier's summary report on how effectively the 2023 water price review process and outcomes delivered on the PREMO objectives.
(pdf, 1.34 MB)
12 April 2019
View Farrier Swier's 2019 independent review of how the PREMO framework has performed since it was launched.
(pdf, 1.89 MB)
One of the aims of PREMO is to shift water corporations’ focus to their customers’ priorities. View survey results from water customers across 16 state-owned urban and regional water corporations on four key areas: value for money, reputation in the community, level of trust and overall satisfaction.
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