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Melbourne Water’s Comments on the Rural Water Customer Service Code and the Rural Water Performance Reporting Framework Consultation Papers and the Draft Performance Reporting Framework for Rural Water Businesses
Melbourne Water welcomes the opportunity to comment on both consultation papers issued by the ESC, titled “ Rural water customer service code” and “Rural water performance reporting framework” and the Draft Performance Reporting Framework for rural water businesses.
Background
Melbourne Water is responsible for managing the waterways and major drainage systems of the Yarra catchment and unregulated waterways of the lower Maribyrnong River, Stony, Kororoit, Laverton and Skeleton Creek catchments. Located within these catchments are approximately 2000 licensed water users. Water use is primarily for agricultural, industrial, commercial and domestic and stock purposes.
Diversion services form a minor part of services provided by Melbourne Water (revenue of approximately $0.5M amounts to less than 1% of 2005/06 Melbourne Water revenue from continuing operations). Melbourne Water’s diversion service is also small compared to other rural water service providers (revenue of approximately $0.5M amounts to less than 0.5% of Goulburn Murray Water’s 2005/06 revenue from operating activities).
Prolonged drought has seen reduced water being available to our customers. While allocations have decreased Melbourne Water’s cost have not, with increased activity to ensure compliance. Charges for diversion services have been progressively increasing with the aim of achieving full cost recovery in 2007/08.
Customers have supported the planned increases in charges up to 2007/08. In general, the main concerns for customers include:
• To receive their water entitlements
• The need for further price increases without corresponding customer benefits valued by customers
Rural water customer service code
The Commission is proposing to create an overarching customer service code that sets out a broad framework of water businesses’ obligations to customers. The code will contain two kinds of obligations:
• Explicit requirements that each business must comply with
• Requirements to develop and publish detailed policies, arrangements and service standards in a customer charter
Water businesses will then develop their own customer charters based on the
customer service code setting out specific customer arrangements for ESC approval. The customer charter forms the basis of service standards and costs proposed in a water business’s Water Plan.
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The proposed code structure (table 3.1 in the consultation paper on the rural customer service code) listing the chapters and coverage of chapters appears appropriate. In designing the rural customer code, it will be important to allow water businesses sufficient flexibility in setting up their customer charters to deliver relevant services at appropriate levels specific to their customers.
The proposed timeline to establish a customer service code and customer charter is very short particularly given Water Plan commitments. Any delays with respect to the release of the draft and final customer service codes will impact on water businesses’ capacity to establish their customer charters in time for input into their Water Plan.
Rural water performance reporting framework
The Commission has a responsibility to report publicly on the performance of the regulated water industry and plans to establish a rural water performance reporting framework.
In developing and implementing the reporting framework it will be important that the benefits of additional reporting outweigh the costs while being cognisant of the differences between service providers with respect to their size of services provided and operating environment. The following suggestions will assist achieving this aim:
• Melbourne Water supports the division of rural water services into service categories, with businesses addressing only the categories relevant to their operation (refer to table 1.1 of the rural water performance reporting framework consultation paper)
• Adopting a tiered reporting system to acknowledge the differences and diversity of operating environments and services provided within the rural sector in the application of the framework. Reporting requirements and hence cost, for smaller businesses would be simplified while fuller requirements are imposed on larger businesses
• The implementation date for the preliminary reporting period is from January to June 2007 (or if an alternative date prior to July 2007 is set due to the delayed issue of the National Water Commission's performance benchmarking framework). Melbourne Water would recommend that the implementation date be changed to 1 July 2007 to enable water businesses to report annually from the next financial year. This would reduce implementation costs and allow time for water businesses to make implementation arrangements
particularly as resources are currently dedicated towards dealing with drought related issues. Melbourne Water only has a team of 3 employees for diversion services and would require either additional time or additional resources to put into place processes/systems to capture all data required. Water businesses have the option of collecting data internally in January to June 2007 as a prelude to actual reporting
• Adequate time is allowed for businesses to collect data and arrange for auditing. It is suggested to allow businesses to the end of September for data collection and to mid November for finalisation of audits
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• Melbourne Water recommends that reporting is based on existing data with a phased implementation of additional requirements over a period agreed with the Commission to minimise implementation costs
• Annual reporting and auditing has the potential to add a disproportionate amount of cost for Melbourne Water’s diversion services due to our low cost base. The Commission could consider imposition of auditing requirements on a 2 to 3 year cycle instead of on an annual basis to reduce costs on water businesses. Alternatively, indicators could be audited on a rotational basis • Addressing any concerns and ambiguities with indicator definitions for ease of
data collection (refer to Attachment 1 for issues with specific indicators). Melbourne Water agrees with the proposed data collection process:
• Performance data to be sent to the ESC on an information template • Indicators to be added to the audit scope issued for urban reporting
• Audits to be conducted according to the Guideline for approving, conducting and reporting audits
• Businesses to be given an opportunity to comment on the draft Performance Report
• Periodic review of indicators to ensure indicators remain meaningful and appropriate
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Attachment 1
Melbourne Water Concerns with Draft Performance Reporting Framework Indicators ID Indicator Issue/Comment NWC C6 Number of (customer diversion) offtakes or extraction locations
Melbourne Water does not currently collect this information and would have difficulty in providing information on this indicator cost effectively in the short term. The additional value provided by this indicator is also unclear. It is considered that number of customer accounts (NWC C4) provides more relevant base data.
NWC S2
Orders delivered on day ordered (%)
Indicator allocated to regulated diversions but is not
applicable to Melbourne Water as service provided is not ‘on order’. NWC S11 Number of service complains
The definition needs to be further clarified on the inclusion or exclusion of complaints where diverters are restricted or banned from taking water due to insufficient flow conditions. NWC S12 S13 Number of customer billing and account complaints, other complaints
Melbourne Water believes that the definition needs to exclude complaints regarding enforcement of compliance issues and lack of access to water during periods of water shortages.
NWC E1 Customer supply points that have measurement devices (%)
Melbourne Water suggests that % of licences that have supply measured is used instead of % customer supply points. As detailed above supply points are not currently fully captured by Melbourne Water.
Alternatively % of water entitlements that are metered could be used. NWC E3 Consumptive use confirmed with measurement device during period (%)
Indicator definitions unclear. Melbourne Water seeks
clarification on how this indicator will apply to our diversion services. NWC E4 Measured Overuse by Customers
Melbourne Water questions the accuracy and hence value of this indicator given that total actual overuse by customers is likely to be uncertain.
NWC E8
Greenhouse gas emissions
Melbourne Water seeks to clarify if “whole of business” refers to total Melbourne Water or total for diversion services only within Melbourne Water.
It is estimated that diversion services represent less than 0.1% of Melbourne Water’s total emissions and therefore could be considered immaterial. The time and effort to separate
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greenhouse gas emissions due to diversion services would be disproportionate for Melbourne Water.
NWC E9 E10 Environmental Management Plan (EMP), Accreditation of EMP
Clarification of indicator definition is sought. In particular would this indicator include consideration of broader organisation-wide EMS systems?
NWC E11
Limits on irrigation water application rates
Indicator allocated to Melbourne Water but is not applicable as limits are not set in Melbourne Water’s area of operation. NWC
S1
Planned availability of network supply
Indicator allocated to Melbourne Water but is not applicable as Melbourne Water does not have a network supply to our regulated and unregulated customers (delivery is via natural systems).
NWC C8
Supply area (ha)
The definition refers to network supply areas only but coverage includes regulated and unregulated services.
Melbourne Water seeks to clarify the definition or how it will apply to our services.
- Seasonal allocation (%)
Indicator should not be assigned to unregulated diversions as seasonal allocations are not made for unregulated diversion services.
