We have published our New Customer Contributions Framework, the result of our review of new customer contributions in Victoria's water sector.
Review of New Customer Contributions
- Release of consultation paper15 August 2024
- Submissions close15 November 2024
- Release of Report on interested parties’ feedback18 June 2025
- Consultation on Report on interested parties’ feedback18 June to 22 July 2025
- NCC workshop seriesAugust-September 2025
- Release of Draft New Customer Contributions Framework paper14 October 2025
- Consultation - Draft New Customer Contributions Framework paper17 October to 11 November 2025
- New Customer Contributions Framework paper22 January 2026
Overview
What are new customer contributions?
Developer charges, also known as new customer contributions, are a one‐off, upfront charge that a water business may levy when a new connection is made to its water, sewerage or recycled water network, or when a customer seeks to expand the capacity of an existing connection.
A new customer contribution is a financial payment made to a water business for works that are used or will be able to be used directly or indirectly for the provision of services that will benefit the connecting property, and any fireplugs attached to those works.
Outcome of our review: the New Customer Contributions Framework
The New Customer Contributions Framework sets out the Essential Services Commission’s approach to strengthening the operation, transparency, and governance of new customer contributions across the Victorian water sector. It is designed to help water businesses and connecting parties understand how the commission expects the NCC framework to be applied in practice.
The NCC Framework supports water businesses as they prepare price submissions for the setting and administering NCCs, including those that will apply from 1 July 2028.
This framework is not ‘commission guidance’ of the kind outlined in the Water Industry Regulatory Order (WIRO). However, consistent with the WIRO, when the commission provides guidance for individual water price reviews, water businesses should expect that guidance, and the commission’s assessment of NCC proposals, will be consistent with this framework.
We also published a report on interested parties' feedback, which sets out our response to your feedback on our Draft New Customer Contributions Framework, which is available in the resources tab.
Why did we review the existing New Customer Contributions Framework?
We reviewed the existing New Customer Contributions Framework to support our strategic objectives of promoting efficient pricing and maintaining transparency and trust in regulated outcomes. NCCs influence:
- how the costs and benefits of growth are allocated between new and existing customers
- the timing of cost recovery
- the transparency of those decisions for developers and customers.
The commission has applied a principles-based NCC Framework since 2013 and considers the core objectives of that framework remain sound. However, experience from the 2023 water price review and subsequent engagement showed that the NCC Framework was not being implemented consistently across water businesses and not consistently with the NCC principles.
In responding to these issues, and in consultation with the water sector, the NCC Framework retains a principles-based approach to NCCs, while placing greater emphasis on transparency, justification and governance in how those principles are applied.
The New Customer Contributions Framework 2026 is informed by more than a decade of experience with the framework, benchmarking against good regulatory practice, and extensive consultation with interested parties over 2024 and 2025. It is an update of the existing framework, not a change to the framework.
Forum: presentation on the Draft New Customer Contributions Framework
We have continued engaging with the water industry, developers, and other interested parties as part of our review of Victoria's new customer contribution framework.
During August and September 2025, we ran workshops on engagement, costing and modelling principles to help shape the draft framework.
In September, we invited developers and other interested parties to share their views through our Report on Interested Parties’ Feedback. Their insights provided important perspectives on how the NCCs framework operates in practice and how it can evolve to better support growth and investment.
Building on this feedback, we released our Draft New Customer Contributions Framework, which outlines proposed regulatory arrangements and our expectations for how water businesses will manage NCCs from the 2028 price review onward.
To continue the conversation, we hosted a public online forum on 28 October 2025. The forum was attended by 73 participants from across the sector, including members of the public, representatives from water businesses, developers, and commission staff. The forum provided an opportunity to discuss key updates to the NCC framework and explore practical implementation questions raised during consultation.
A recording of this forum can be accessed below.
Next steps
In 2026, we will work with the industry to develop case studies and update the NCC modelling templates.
Resources
New Customer Contributions Framework
Draft New Customer Contributions Framework
Submissions on our Draft New Customer Contributions Framework
We consulted on our Draft New Customer Contributions Framework until 11 November 2025. We received 10 submissions and 1 confidential attachment.
We consider each submission in the next step of our new customer contributions review. See our Submissions Policy for how we approach anonymous and confidential submissions.
Report on interested parties’ feedback
Feedback on Report on interested parties’ feedback
Submissions on our consultation paper
We consulted on our consultation paper until 15 November 2024. We received 22 submissions including 5 confidential submissions.
We consider each submission in the next step of our new customer contributions review. See our Submissions Policy for how we approach anonymous and confidential submissions.