As part of a review into the new customer contributions framework, the Essential Services Commission (ESC) has released a report in response to issues raised by water businesses and other interested parties.
New customer contributions, also known as developer charges, are one-time charges levied by water businesses on property owners who apply to connect to a water business’s works or request increased services. These charges contribute to the cost of works or the provision of services that will benefit the property.
New customer contributions determine the upfront payment amount and the ongoing charges that the connecting party and all other customers will incur.
During the consultation process, the ESC heard that most parties wanted to maintain the existing principles-based new customer contribution framework and the flexibility it provides.
The objectives of the framework are to:
- send signals to developers about the costs of developing in different locations
- share the costs and benefits of growth between new and existing customers
- administer customer contributions for new developments in a transparent way.
The report responds to issues raised as part of the consultation and provides clarity around:
- our role in establishing new customer contributions
- the regulatory framework governing new customer contributions
- how we can improve its administration and implementation
- new customer contribution modelling principles.
Feedback on this report is welcome until July 22, 2025, and can be submitted via Engage Victoria.
Consultation
The ESC initiated an extensive consultation process in August 2024 to gather feedback from interested parties, including meetings with water businesses.
It will soon commence workshops with the water sector to explore best practices for engagement, costing, and modelling principles, and to provide further clarification on issues raised.
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