Annual Report 2018-19

2018–19 has been a milestone year for the Essential Services Commission. We farewelled two commissioners – the Chairperson Ron Ben-David, and Commissioner Richard Clarke – and welcomed a new Commissioner, Simon Corden. 

I would like to particularly pay tribute to the significant leadership that Dr Ron Ben-David has provided to the commission over the last 10 years, and on a personal note acknowledge the support he has provided me as CEO.

During the course of this year, we have continued to deliver on our commitments see positive improvement in our regulatory practice. 

Effective stakeholder engagement continues to be a high priority for the commission. The results of our reputation survey show ongoing improvement in the feedback we receive on core elements of our regulatory practice – notwithstanding some of the very challenging timeframes for some projects.

We commissioned an independent review on how the new water pricing framework went following the completion of the 2018 water price reviews. The review found there was significant evidence the design of the framework contributed significantly to promoting greater ambition for water businesses, improving focus on customer engagement and increased autonomy for water businesses. 

We continued to deliver major reforms in the energy retail sector. We completed code reviews aimed at improving information that is available to customers, and our advice on the level of the Victorian Default Offer was accepted by government. To support the implementation of these changes we have commenced a public information and education campaign to promote public awareness of these changes and will be very interested to track how this goes.

The commission has increased its focus on compliance and enforcement in the energy sector this financial year. 

We will be focusing on how energy companies comply with new reforms designed to give customers access to a fairer price for electricity (the Victorian Default Offer) and greater transparency over their energy deals. We will also continue to closely monitor and take action where energy businesses breach energy rules including overcharging, wrongful disconnections and failing to notify about planned interruptions.

Our renewed focus on enforcement is critical to ensuring the public has confidence that the sector is being held to account when this is necessary.

We required an energy retailer to pay almost $3 million for failing to comply with Victorian Energy Upgrades requirements, and issued over $600,000 worth of penalty notices in the energy sector. The penalty notices focused on events where energy businesses failed to manage their relationship with customers effectively. The notices highlighted two areas of concern we wanted to highlight relating to both trust and safety – failure to gain informed consent from customers when signing someone up, and failing to notify customers of planned outages.

We have continued to adapt as an organisation. I established a new group – the price monitoring and regulation division. This group brings together a range of our pricing and price monitoring regulatory activities and will support more flexible use of staff and resources across our pricing regulation.

The commission will continue to grow in 2019–20. The government has provided $27.34m in additional funding over four years to deliver on its election commitment associated with the Energy Fairness Plan. This will enable us to continue to build our capability in enforcement, set the Victorian Default Offer on an annual basis, and continue to implement reforms in the energy sector. We are well placed to deliver on these commitments.

John Hamill, CEO