Our water pricing framework puts customers at the centre of a water business's decision making.
PREMO water pricing framework
From 1 July 2018, we're using the PREMO water pricing framework to review prices submitted to us by Victorian water businesses.
The framework gives water businesses strong incentives to deliver better value for customers. It does this through the new PREMO incentive mechanism, which focuses on five elements: performance, risk, engagement, management and outcomes. These elements form the 'PREMO' acronym.
We reviewed our existing water pricing approach in 2016 and developed the PREMO framework based on our findings.
We reviewed how the framework was performing
In late 2018, we engaged FarrierSwier to undertake an independent review of PREMO and how well it delivered on its objectives. We found that:
- there is strong evidence that PREMO contributed significantly to delivering better outcomes for customers
- PREMO provided incentives for water businesses to deliver better value for money to customers, either through higher cost efficiency targets and lower prices, or better services
- PREMO was successful in giving stronger emphasis to customer engagement, leading to price submissions that better reflected customer views.
View our customer survey results
One of the aims of PREMO is to shift water corporations’ focus to their customers’ priorities. View our survey results of water customers across 16 state-owned urban and regional water corporations on four key areas: value for money, reputation in the community, level of trust and overall satisfaction.
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