Our review of the New Customer Contributions

The current New Customer Contributions framework has been in place since 2013. We are reviewing the framework to address the following issues:

• inconsistent and unjustified cost attribution for growth and non-growth assets
• apparent preference for common pricing approaches even in areas that had materially varied costs
• negotiating framework requirements were inadequately met
• lack of transparency in the information provided to stakeholders
• uncertainty around gifted or reticulated assets
• timing of development and development servicing plans that are often changed, unpublished, or not committed to by some water businesses
• application of an average incremental cost approach to calculate customer contributions charges by some water businesses as opposed to the net incremental costs adopted by our current new customer contributions framework.

On 15 August 2024, we released a consultation paper providing details of the issues we intend to address through this review. 

On 1 April 2024, the Water Industry Standards introduced new obligations on water businesses relating to self-reporting of non-compliance with the Water Industry Standards. Under the self-reporting obligation, a water business must report to the commission potential or actual non-compliances that may have a material adverse impact. 

To assist water businesses in meeting their reporting obligation, we have published a guideline under section 13 of the Essential Services Commission Act 2001. The guideline provides context and includes detail and examples of key terms from the reporting obligation in the Water Industry Standards. The key terms addressed in the guideline are: 

• potential and actual non-compliance 
• material adverse impact 
• timeliness (of reporting) 
• the requirement for reports to be in writing 

This guideline does not create any additional obligations on water businesses or legally alter the obligations in the Water Industry Standards.

This paper sets out the commission's final decision to introduce a self-reporting of non-compliance guideline for Victorian water businesses. 

The guideline aims to assist water businesses to understand and comply with the self-reporting obligation in the Water Industry Standards. 

The guideline comes into effect on 25 October 2024.

Along with the guideline, we have also released two reporting templates. The templates are designed to provide practical assistance to a water business for meeting its self-reporting obligation and to identify relevant information relating to the potential or actual non-compliance and the remediation it is undertaking. 

We received six submissions from Victorian water businesses and one from Financial Counselling Victoria. 

On 3 September 2024, we also held a workshop with stakeholders from the water sector and sought feedback on the draft guideline and draft reporting template. 

Submissions were generally supportive of the draft reporting guideline and draft reporting template. 

We consider all submissions and feedback in making our final decision.