Essential Services Commission Memorandum of Understanding
The Essential Services Commission (ESC) is the independent economic regulator for Victoria's electricity, gas, ports, grain handling, freight rail, taxi, hire car, tow truck, statutory insurance and water industries. The ESC has also regulated Victoria's water and sewerage services since 1 January 2003.
Utility services such as energy, water supply and transport services are among the most important contributors to the social and economic well-being of all Victorians and the commission will protect the community's interests by delivering regulatory arrangements for the ongoing oversight of the performance of Victoria's essential services sector.
The ESC was set up under the Essential Services Commission Act 2001 (Victoria), which came into operation in January 2002.
EPA Victoria recognises that lasting environment protection comes from a mix of regulation and policing, providing environmental leadership and working in collaboration with all sectors of the community. EPA's programs and tools focus on partnerships as a means of facilitating environmental responsibility and ecological sustainability.
EPA and the ESC entered into a memorandum of understanding (MOU) in July 2003. The key objective of the MOU is to help to ensure that economic regulation of the prescribed essential utilities, which are mentioned above, is applied within a framework that is fully aware of, and consistent with, statutory requirements administered by EPA. This is achieved through regular meetings and discussions on a variety of issues at various levels between EPA and the ESC, particularly relating to water issues.
On 1 July 2005 the ESC pricing determination for the urban water authorities came into effect. EPA worked with both water businesses and the ESC to ensure that environmental regulatory requirements were accounted for in the 2005–2008 water plans. The water plans set out the prices that each of the businesses propose to charge for their water, sewerage and other related services to urban customers, and irrigation, diversions and stock and domestic to rural customers.
EPA's involvement in the ESC regulatory review process has included the following:
- working with water businesses to determine what should be achieved in the 2005–2008 period to implement the State Environment Protection Policy (Waters of Victoria) 2003
- working with water businesses to develop a template for EPA to assess the activities proposed by water businesses for the regulatory review period
- meeting with water business to provide in-principle support for large CAPEX and OPEX programs
- commenting on draft water plans
- providing formal comment and support for proposed water plans once submitted to ESC
- providing follow-up assistance to ESC in developing its final determination
- working with ESC and water businesses to develop performance measures.
The price review for the rural water businesses came into effect on 1 July 2006. ESC's timetable for the rural water price review and further information can be viewed from the ESC website.
EPA will continue to work with the water businesses and ESC in accordance with the MOU to ensure that environmental obligations are met in the development of water plans for the next price review.