Annual Report 2018-19

The commission was established by the Essential Services Commission Act 2001, which came into effect on 1 January 2002 in place of the Office of the Regulator-General.

We have been operating since 2001 

The commission was established to perform its regulatory and advisory functions in ways that promote the long-term interests of consumers. 

The Assistant Treasurer is responsible for the commission. We are required to perform functions under various industry legislation. 

The Essential Services Commission Act 2001 requires us to: 

• perform functions as required by legislation
• provide advice and recommendations to the Assistant Treasurer on matters relating to economic regulation and regulated industries 
• conduct inquiries (at the request of the Assistant Treasurer) into any systemic reliability of supply issues related to a regulated industry or other essential service
• conduct inquiries and report on matters relating to regulated industries
• conduct public education programs for the purposes of promoting its objectives and in relation to significant changes in the regulation of a regulated industry.

As part of our role, we consider:

• efficiency in regulated industries, and incentives for long-term investment
• the financial viability of the industry
• competition within the industry
• relevant health, safety, environmental and social legislation applying to the industry
• benefits and costs of regulation
• consistency in regulation between states and on a national basis.

Key highlights:

• 45 number of times the commission met in 2018–19
• 7 number of times the board met in 2018–19
• 4 number of times our audit and risk committee met in 2018–19

We use a formal process to exercise our statutory responsibilities 

This involves developing reports on how markets operate, delivering price determinations, compliance assessments and audits, and taking enforcement action when required. We also run the Victorian Energy Upgrades program and consider higher cap applications from councils. 

We consult with our stakeholders on our work by conducting workshops, public forums and through formal submission processes. 

Our board oversees organisational governance matters 

Our commissioners meet as a board to formally deal with organisational governance matters.

Our audit and risk committee helps us identify and manage risks

Our audit and risk committee provides assurance to our board in accordance with the requirements of audit committees outlined in the Standing Directions under the Financial Management Act 1994. 

The main responsibilities of the committee are to:

• oversee the effectiveness of the internal control environment, including operations, financial reporting and compliance with applicable laws and regulations
• determine the scope of the internal audit function, and maintain effective communication with external auditors
• consider findings and recommendations made by internal and external auditors and review the implementation of actions to resolve issues raised
• oversee the effective operation of the risk management framework
• review and monitor compliance with the Standing Directions and Financial Management Act 1994, including remedial actions to ensure compliance.

Our audit and risk committee had the following members at 30 June 2019:

• external member and acting chairperson of the committee, David Ashmore
• Commissioner Kate Symons
• Commissioner Simon Corden. 

Our memorandums of understanding help improve outcomes 

The Essential Services Commission Act 2001 requires us to enter into memorandums of understanding with various Victorian Government agencies. We also enter into memorandums with agencies who share an important working relationship with us. 

We use these memorandums as a way to make our outcomes more efficient. They help improve communication and regulatory processes, and reduce the duplication of work across agencies. 

We held memorandums of understanding with 16 organisations 

In 2018–19, we held memorandums of understanding with the following organisations:

1. Australian Competition and Consumer Commission* 
2.  Australian Energy Regulator* 
3. The Clean Energy Regulator (Commonwealth)* 
4. Commercial Passenger Vehicles Victoria* 
5. Director of Consumer Affairs Victoria 
6. Department of Health and Human Services 
7. Energy Safe Victoria 
8. Energy and Water Ombudsman (Victoria) Limited (EWOV)*
9. Environment Protection Authority (EPA Victoria)
10. Environment and Sustainable Development Directorate (ACT)*
11. Independent Pricing and Regulatory Tribunal New South Wales* 
12. Marine Safety Victoria (Transport Safety Victoria) 
13. Port of Melbourne Corporation* 
14. Sustainability Victoria 
15. Victorian Regional Channels Authority 
16. Victorian Workcover Authority*. 

View all memorandums of understanding at https://www.esc.vic.gov.au/about-us/memorandums-understanding

*An asterisk indicates that we have voluntarily entered into a memorandum with that organisation. All other memorandums are required under section 16 of the Essential Services Commission Act 2001.

ESSENTIAL SERVICES COMMISSION FINANCIAL MANAGEMENT COMPLIANCE ATTESTATION STATEMENT

I, Kate Symons, on behalf of the Responsible Body, certify that the Essential Services Commission has complied with the applicable Standing Directions 2018 under the Financial Management Act 1994 and Instructions.

Kate Symons, Commissioner and Chairperson