We are reviewing new customer contributions (NCC) to address key issues we identified from recent water price reviews.
Review of New Customer Contributions
- Release of consultation paper15 August 2024
- Submissions close15 November 2024
- Release of Report on interested parties’ feedback18 June 2025
- Consultation on Report on interested parties’ feedback18 June to 22 July 2025
- NCC workshop seriesAugust-September 2025
- NCC framework paperMid-2026
Overview
New customer contributions (NCC)
New customer contributions (NCC) are one-off charges levied by water businesses on a property owner applying to connect to a water business’s works or applying to receive increased services. These charges are a contribution towards the costs of works used directly or indirectly for the provision of the services that will benefit the property.
The objectives of the new customer contributions framework administered by the commission 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 development in a transparent way.
Our review of the new customer contributions
The current new customer contributions framework has been in place since 2013. We are reviewing the framework to address the following issues:
- inconsistent and unjustified cost attribution for growth and non-growth assets
- apparent preference for common pricing approaches even in areas that had materially varied costs
- negotiating framework requirements were inadequately met
- lack of transparency in the information provided to stakeholders
- uncertainty around gifted or reticulated assets
- timing of development and development servicing plans that are often changed, unpublished, or not committed to by some water businesses
- application of an average incremental cost approach to calculate customer contributions charges by some water businesses as opposed to the net incremental costs adopted by our current new customer contributions framework.
On 15 August 2024, we released a consultation paper providing details of the issues we intend to address through this review.
Feedback on consultation paper
The consultation period was between 15 August and 15 November 2024 during which we met with water businesses and other interested parties.
- We received 22 submissions including 5 confidential submissions.
The public submissions can be viewed in the resources tab of this page.
Report on interested parties’ feedback
This report sets out our response to your feedback on our consultation paper.
We welcome your views and invite you to comment on all areas discussed in the paper or focus on those most relevant to your interests or expertise via our consultation page in Engage Victoria or by sending a submission directly to us to water@esc.vic.gov.au.
Next steps
Consultation on the Report on interested parties’ feedback will be open until 22 July 2025.
During August and September 2025, we will host workshops for the water industry on engagement, costing and modelling principles and our future NCC work program. In September 2025 we will host a forum for developers and interested parties to welcome their views on the Report on interested parties’ feedback.
All feedback received during the consultation period and the workshops will be reviewed and considered as we update our existing guiding papers on NCCs into one NCC framework paper. This paper will include more direction on approaches to engagement, negotiated NCCs, cost allocation and attributable revenues amongst other key topics. It will also set out the required documents for future price reviews.
After the release of the NCC framework paper in 2026, we plan to work with water businesses to update our model.
Resources
Report on interested parties’ feedback
Submissions on our consultation paper
We consulted on our consultation paper until 15 November 2024. We received 22 submissions including 5 confidential submissions.
We consider each submission in the next step of our new customer contributions review. See our Submissions Policy for how we approach anonymous and confidential submissions.