Prices oversight

Overview

The Essential Services Commission and the Australian Competition and Consumer Commission are independent regulators established by Victoria and the Commonwealth.


Essential Services Commission

In Victoria, the Essential Services Commission (ESC) external-link.gif is the independent economic regulator established by the State Government to regulate prescribed essential utility services supplied by the electricity, gas, ports and rail freight industries, as well as regulation of aspects of the transport and insurance industries.

Since 1 January 2004, the ESC also has a role in price regulation for Melbourne Water, the 15 regional urban water authorities and the five rural water authorities (excluding catchment management authorities).

Established in January 2002, the ESC replaced the Office of the Regulator General as the economic regulator of Victoria’s utility services. Its objectives are to promote the long-term interests of the Victorian community.

In performing its advisory and regulatory functions, the ESC is required to act in a manner that provides incentives for dynamic, productive and allocative efficiency and promotes the long term interests of Victorian consumers.

Since 2008, most of the activities formerly regulated by the ESC in relation to electricity and gas have been progressively transferred to the Australian Energy Regulator.

 

Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) external-link.gif has three price oversight functions under Part VIIA of the Competition and Consumer Act 2010 (formerly the Trade Practices Act 1974 ) that are applied to all other industries in Victoria which have been placed under price surveillance to:

  • assess and approve or object to the proposed price rises of any business organisation placed under prices surveillance;
  • hold inquiries into pricing practices and related matters and report the findings to the responsible Commonwealth Minister; and
  • monitor prices, costs and profits of an industry or business and report the results to the responsible Commonwealth Minister.

Postal services of Australia Post and some aviation services are currently declared for prices surveillance by the ACCC.

Under the Water Act 2007 (Cth), the Commonwealth Minister for Water has created the Water Charge (Infrastructure) rules 2010 (WCI rules), which have had legal effect in Victoria and in other Murray Darling Basin Sates from 12 January 2011.

These rules enable the ACCC, or another body (for example the ESC) once accredited, to regulate the prices for certain water services in northern Victoria that can be charged after the end of the current cycle, 1 July 2013.

The charges that can be regulated under the WCI rules are predominantly water corporations’ charges for irrigation and drainage services, disconnection from such services and for bulk water services.

The WCI rules capture the provision of services by Lower Murray Water Corporation (for its non-urban water services only) and Goulburn-Murray Water Corporation.