Essential Services Commission Regulations 2021

The Regulations operate around three core concepts drawn from the parent Act: the Charter of Consultation and Regulatory Practice, the annual reporting obligation, and the category of relevant agency for information-sharing.

The Charter is a document that the Commission must prepare and publish under section 14 of the Act. It sets out how the Commission will consult stakeholders, notify decisions, and conduct its regulatory activities. Regulation 6 prescribes the specific matters that the Charter must contain: (a) the form and manner of publishing future work programs for each regulated industry; (b) how inquiries, decisions and determinations are to be notified; (c) the processes for public consultation that will precede determinations and inquiries; (d) requirements in relation to public hearings by the Commission; (e) processes for reviewing the Charter itself; and (f) what the Commission will do to ensure best practice in performing its functions. The Charter is thus a binding public commitment that constrains the Commission’s procedural discretion. It must be followed unless varied in accordance with its own review processes. The Regulations do not prescribe the substantive content of the Charter beyond these six headings; the Commission retains flexibility to design detailed procedures within that framework. However, the requirement to publish future work programs per industry introduces a degree of forward-looking transparency that can alert regulated entities to upcoming reviews or determinations, allowing them to prepare and allocate resources accordingly.

The annual report concept flows from section 31 of the Act, which requires the Commission to prepare an annual report. Regulation 7 expands the mandatory contents well beyond what the Act itself specifies. The prescribed items include: an overview of how the Commission has met its objective and performed its functions in each regulated industry; how it has given effect to the Charter; any memoranda of understanding entered into; general descriptions of price determinations and third-party access regime determinations; outcomes of inquiries, contravention proceedings, and decisions to disclose confidential information under section 60C(3); statistical counts of information-gathering notices served under sections 36 and 37, including a general description of the nature of the matters; the number of proceedings challenging the validity of those notices; the number of entries onto premises by inspectors; the number of search warrants issued and their general nature; a summary of complaints received and how they were dealt with; major matters investigated; the number of times the Commission commenced proceedings for a contravention order and the reasons; the number, type and result of VCAT review applications; and a statement showing total costs and expenses per regulated industry. This is a comprehensive disclosure regime that allows stakeholders to assess the Commission’s enforcement activity, resource allocation, and procedural fairness record across each industry it regulates.

The concept of a “relevant agency” appears in section 60E(9) of the Act, which defines which bodies can receive information from the Commission despite confidentiality obligations in other parts of the Act. Regulation 8 adds three entries to that definition: the Secretary of DELWP for the Solar Homes Program (a state-administered subsidy scheme for rooftop solar); the Commercial Passenger Vehicle Commission (the then-regulator for taxis and ride-share under the Transport Integration Act 2010); and the Clean Energy Regulator (a Commonwealth body responsible for administering national renewable energy and carbon abatement schemes). The effect is to permit the Commission to share information with these bodies for specified purposes without breaching secrecy provisions. This facilitates regulatory coordination across state and Commonwealth agencies, particularly in areas where energy regulation intersects with transport or with federal renewable energy schemes.

The primary direct subject of these Regulations is the Essential Services Commission itself. It must revise its Charter to ensure it covers the six prescribed matters; it must compile its annual report according to the detailed checklist in regulation 7; and it may (but is not required to) share information with the three newly-prescribed bodies under regulation 8. The Commission’s internal processes are therefore the most immediately affected.

Regulated entities - the utilities, energy suppliers, water companies, port operators, rail access providers, and other businesses over which the Commission has jurisdiction - are indirectly affected in several ways. The Charter requirements give them greater certainty about how and when the Commission will consult them on future determinations and inquiries. If the Commission fails to publish work programs or to follow its own consultation processes, regulated entities can hold it to account through the Charter’s terms, potentially through judicial review. The annual report disclosures allow them to see the volume and nature of enforcement activity, which can signal the Commission’s enforcement priorities and the types of conduct that attract attention. The cost breakdown per industry enables cross-subsidisation analysis: if one industry bears disproportionate costs, its participants can challenge the allocation in future regulatory determinations.

Consumers and consumer advocates gain transparency. The annual report must include a general summary of complaints received and how those complaints were dealt with, and a description of major matters investigated. This allows the public to assess whether the Commission is performing its protective functions adequately. The Charter’s publication of work programs means consumer groups can track upcoming policy reviews and participate in consultations.

The three prescribed bodies benefit from regulation 8. The Secretary of DELWP administering the Solar Homes Program can receive information from the Commission, presumably to coordinate solar installation standards with the energy network regulator. The Commercial Passenger Vehicle Commission can receive information relevant to taxi and ride-share regulation, which overlaps with energy costs for electric vehicles. The Clean Energy Regulator can access information relevant to national renewable energy targets. These bodies are likely to use the information-sharing power to obtain data that would otherwise be protected by the Commission’s confidentiality obligations under the Act.

Victorian Civil and Administrative Tribunal (VCAT) is affected only tangentially: the Commission must report the number, type and result of review applications made to VCAT under section 55 of the Act. This provides a public performance measure of how often the Commission’s decisions are challenged and how often those challenges succeed.

Legal practitioners and compliance professionals advising regulated entities should note the expanded transparency provisions. The annual report now requires the Commission to disclose the number of search warrants issued and premises entered. This signals an increase in the Commission’s investigatory powers under the Act (sections 39P and 39S), and regulated entities should expect more proactive enforcement. The information-sharing provision means that data supplied to the Commission for one purpose may now be shared with the Clean Energy Regulator or other prescribed bodies without the consent of the entity that provided it, subject to any limitations in the Act.

The Regulations impose duties on the Commission, not on regulated entities or private parties. The Commission has a duty under regulation 6 to ensure its Charter covers the six prescribed matters. This is not a one-off duty: the Charter must be reviewed and updated, and the Commission must give effect to the Charter in its activities (regulation 7(a)(iii) requires annual reporting on how it gave effect to the Charter). Failure to maintain a Charter compliant with the prescription could be grounds for judicial review of a determination made without following the Charter’s processes, though the Regulations themselves provide no direct enforcement mechanism.

The Commission has a duty under regulation 7 to include all the prescribed items in its annual report. The duty is to include that information as prescribed; there is no discretion to omit items. A report that lacks any of the items would not satisfy the statutory requirement under section 31 of the Act, and the Minister could presumably direct the Commission to comply or raise the matter in Parliament. The obligation to report the number of proceedings for contravention orders and the reasons for starting them (regulation 7(n)) is particularly onerous: it requires the Commission to justify its enforcement decisions publicly, which may deter speculative or weak enforcement actions.

The Commission also has a right under regulation 8 to share information with the prescribed persons and bodies. The provision does not oblige it to share; it merely removes the legal barrier that would otherwise exist under the Act’s confidentiality restrictions. The Commission retains discretion whether to disclose. However, once information is shared with the Clean Energy Regulator (a Commonwealth body), it may become subject to Commonwealth freedom of information laws or other disclosure regimes. Regulated entities should be aware that information they provide to the Commission - even commercially sensitive information - could be shared under this provision without notice to them.

For regulated entities, the key rights arise indirectly from the Charter. Regulation 6(c) requires the Commission to establish processes for public consultation that precede determinations and inquiries. Affected entities have a right to participate in those processes and to have their submissions considered before the Commission makes a binding decision. If the Commission fails to follow its own published Charter, a regulated entity could potentially challenge a determination on procedural fairness grounds. The annual reporting obligation under regulation 7(o) - requiring the Commission to disclose the number, type and result of VCAT review applications - also gives entities a public benchmark of the success rate of reviews, which may encourage or discourage further challenges.

The Regulations do not create any new private rights of action. No penalty is prescribed for breach of these Regulations. The duties are enforceable through the normal mechanisms applying to statutory bodies: ministerial oversight, parliamentary scrutiny, judicial review for procedural error, and ultimately the possibility of a public inquiry if the Commission persistently fails to comply.

The Regulations themselves contain no penalty provisions. Regulation 7 refers to contravention orders under the Act, but only as an item to be reported (the number of times the Commission commenced a proceeding for a contravention order and the reasons). The actual penalty for breaching the Act’s substantive provisions is set out in the parent Act, not in these Regulations. The enforcement roles captured in the annual report - information gathering notices, entry onto premises, search warrants - are powers conferred by the Act, not by these Regulations.

The absence of penalty for non-compliance with the Regulations does not mean the requirements are optional. If the Commission fails to include prescribed information in its annual report, it is arguably not complying with section 31 of the Act, which requires it to “submit a report” but does not specify its contents (the matters are left to regulation). A failure would be a breach of a statutory duty, but the Act does not specify a consequence. The most likely enforcement mechanism is political: the Minister could require the Commission to remedy the omission, and the report could be referred for parliamentary committee scrutiny. In extremis, the Governor in Council could remove Commission members under the Act.

For regulated entities, the reporting requirements under regulation 7 create transparency about enforcement, not new enforcement powers. The Commission’s enforcement actions are what they are; the annual report simply makes them visible. However, the reporting could influence behaviour. For example, if the Commission commences many contravention proceedings against one industry but few against another, that might incentivise the targeted industry to increase compliance spending or to lobby for changes to the Act. Conversely, if the Commission’s reasons for commencing proceedings appear weak, it could discourage future enforcement by exposing the Commission to public criticism.

The information-sharing provision in regulation 8 does not create enforcement powers but facilitates coordinated enforcement between agencies. Information shared with the Clean Energy Regulator could lead to enforcement action under Commonwealth law. Likewise, information shared with the Secretary of DELWP for the Solar Homes Program could lead to administrative penalties or cancellation of rebates under that program. Entities involved in solar installations or the commercial passenger vehicle industry should be mindful that information they give to the Commission could find its way to other regulators and be used against them in a different regulatory context.

These Regulations sit squarely within the Victorian regulatory architecture as subordinate legislation under the Essential Services Commission Act 2001. They are made under section 65 of that Act and must be read in conjunction with it. The parent Act establishes the Commission, its functions and powers, and its consultation and reporting duties; the Regulations flesh out the details left to prescription.

The Regulations also interact with the Subordinate Legislation Act 1994, under which they must be reviewed and will sunset after ten years (regulation 3 read with the general information endnote). Any decision to remake or amend them before 30 November 2031 must comply with the regulatory impact statement requirements of that Act if the Regulations impose a significant economic burden, which is unlikely given their procedural nature.

Regulation 8 expressly connects to three other pieces of legislation. Paragraph (a) mentions the Solar Homes Program administered by the Department of Environment, Land, Water and Planning; the program itself is established under the Victorian Energy Upgrades Act 2018 and related instruments, though the Regulations do not specify a statutory reference. Paragraph (b) refers to the Commercial Passenger Vehicle Commission established under section 115B of the Transport Integration Act 2010. That Commission has since been abolished and its functions transferred to the Essential Services Commission itself under the Transport (Commercial Passenger Vehicle Reforms) Act 2022, which came into effect after these Regulations were made (the Regulations being made on 30 November 2021). The reference to the Commercial Passenger Vehicle Commission is therefore now obsolete unless the Regulations are amended, though the information-sharing provision may still work functionally because the transfer of functions would carry the information rights with it. Practitioners should check whether the regulation has been updated or whether the Secretary of Transport now subsumes that role.

Paragraph (c) designates the Clean Energy Regulator established under the Commonwealth Clean Energy Regulator Act 2011 as a prescribed body. This creates an intergovernmental interface: the Victorian Commission can share information with a Commonwealth agency, subject to any limitations in the Privacy and Data Protection Act 2014 (Vic) and the Privacy Act 1988 (Cth). Information shared may also be subject to disclosure under the Freedom of Information Act 1982 (Cth) if held by the Clean Energy Regulator.

Regulation 7 references section 60C(3) of the Act, which deals with the Commission’s power to disclose confidential information in certain circumstances. The annual report must include the outcome of any decision to disclose under that provision. This interacts with whatever confidentiality protections exist in the various industry-specific Acts that the Commission administers (e.g., the Electricity Industry Act 2000, the Gas Industry Act 2001, the Water Industry Act 1994). The reporting obligation ensures that the Commission cannot secretly release confidential information; any such disclosure must be recorded and published in the next annual report.

The Regulations do not directly interact with national competition law, such as the Competition and Consumer Act 2010, but the Commission itself may make access determinations under Part 3A of the Act that affect competition. The annual report must describe any such determination (regulation 7(c)).

These Regulations were made on 30 November 2021 and came into operation on 1 December 2021. They revoked two earlier instruments: the Essential Services Commission Regulations 2011 (S.R. No. 155/2011, as amended by S.R. No. 127/2019) and the Essential Services Commission Amendment Regulations 2019 (S.R. No. 127/2019). The 2011 regulations had prescribed matters under the Act for ten years; the 2019 amendment had made minor changes. Both were superseded entirely.

As of the version date (1 December 2021), no amendments had been made to these Regulations. The Table of Amendments in the endnotes confirms “There are no amendments made to the Essential Services Commission Regulations 2021 by statutory rules, subordinate instruments and Acts.” There were also no amendments not yet in operation at that time.

The Regulations are due to sunset on 30 November 2031. If they are not re-made before that date, the Charter would no longer have prescribed content, the annual report would lose its mandatory items, and the three bodies would cease to be prescribed for information-sharing. The Commission would still have a duty to maintain a Charter under section 14 of the Act, but its content would revert to whatever the Commission chose without statutory prescription. The annual report would still be required under section 31, but its contents would be at the Commission’s discretion, subject to any general reporting obligations in the Financial Management Act 1994. Information-sharing would revert to only those bodies listed in the unamended definition in section 60E(9) of the Act, which may be fewer or different.

Any future amendment would likely occur if the Act is changed to add new functions or to reflect machinery-of-government changes, such as the abolition of the Commercial Passenger Vehicle Commission. The Regulations could also be amended to add more prescribed bodies for information-sharing or to modify the annual reporting items if stakeholders find the burden too great or too light. As a subordinate instrument amending statutory rule, amendments would be made by the Governor in Council on the Minister’s recommendation, typically without public consultation unless the Subordinate Legislation Act requires it.

These Regulations are procedural and have not themselves been the subject of litigation reported in the public record. However, they have indirect significance for litigation under the parent Act and related instruments. Regulation 7 requires the Commission to report on the number of proceedings commenced to challenge the validity of information gathering notices, the number of applications for review to VCAT under section 55 of the Act, and the number of proceedings for contravention orders it has commenced. Future editions of the annual report will thus provide a de facto litigation history that practitioners can track.

The Charter prescribed under regulation 6 could become relevant in judicial review proceedings. If a regulated entity challenges a determination on procedural fairness grounds, the court or tribunal will examine whether the Commission followed its Charter. The Charter’s content is now partially prescribed by these Regulations: for example, the Commission must specify how it will notify inquiries and determinations. If the Commission fails to follow that notification procedure, a challenge might succeed. To date, no reported case appears to have turned on a breach of these particular regulations, as they came into force only in December 2021 and litigation takes time to reach judgment.

The information-sharing provision in regulation 8 could also lead to litigation if a party argues that information was improperly disclosed to a prescribed body. The definition of “relevant agency” is now expanded to include the Clean Energy Regulator, but the Act may impose conditions on how such information can be used. A breach of those conditions could give rise to an action for breach of confidence or for an order to prevent further disclosure. No such case has yet been reported.

Practitioners should monitor VCAT decisions under section 55 of the Act, as the annual report will aggregate them. The Commission must also report the number of search warrants issued, which suggests a relatively active enforcement environment. If search warrants are frequently litigated (e.g., for alleged lack of particularity or overbreadth), that will appear in the annual report as “proceedings commenced to challenge the validity of information gathering notices” and as part of the description of search warrant matters.

Overall, these Regulations are litigation-neutral: they do not create new causes of action, but they facilitate transparency about existing litigation and may provide evidence of whether the Commission is acting within its procedural framework.

The most significant trap for regulated entities is the information-sharing provision in regulation 8. On its face, it merely adds three bodies to the definition of “relevant agency”. But the parent Act’s information-sharing provisions (section 60E and related sections) allow the Commission to share information with relevant agencies without giving notice to the entity that supplied it. Regulated entities that provide commercially sensitive data to the Commission for a price determination or access regime review should assume that the Clean Energy Regulator, the Secretary of DELWP (Solar Homes), or the Commercial Passenger Vehicle Commission may receive that data. There is no opt-out and no requirement for the Commission to seek the entity’s consent. If the data concerns eligibility for solar rebates or compliance with emission reduction targets, the shared information could trigger enforcement action by a different regulator.

The second gotcha is the sunset date. Ten years is a long time, but Victoria’s subordinate legislation landscape is littered with regulations that were not re-made on time, leaving gaps. Practitioners advising on the Commission’s processes should check the sunset date (30 November 2031) and plan for the possibility that the regulations lapse. A gap in prescription would mean the Charter’s content is no longer specified, the annual report items become discretionary, and the three prescribed bodies lose their information-sharing eligibility. The Act would still operate, but less predictably.

A third trap is the reporting item in regulation 7(p): a statement showing the Commission’s total costs and expenses in relation to each regulated industry. This could reveal that one industry bears a disproportionate share of the Commission’s costs relative to its size or the volume of regulatory activity. That information could be used by participants in that industry to argue for a lower cost allocation in the next cost-recovery determination, or by competitors to argue that the Commission is over-regulating one sector. The Commission must be careful in how it defines “regulated industry” for this purpose; if it aggregates too broadly, the cost disclosure may be meaningless; if too narrowly, it may inadvertently expose commercially sensitive cost allocations.

The Charter requirement in regulation 6(b) - how inquiries, decisions, and determinations are to be notified - might be overlooked by stakeholders. If the Commission specifies that it will notify only by publication on its website, an affected entity that checks only email could miss a critical deadline. The Charter must be consulted early to understand how to stay informed.

Finally, regulation 7(j) and (k) require reporting on search warrants issued under section 39S of the Act and their general nature. The Act’s search warrant provisions are relatively recent and give the Commission significant investigatory powers. The requirement to report the number of warrants may reveal a pattern of aggressive enforcement. Entities should review the annual report for their industry to gauge whether the Commission is increasingly using coercive tools.

Because these Regulations impose duties on the Essential Services Commission rather than on private parties, the primary “how to comply” guidance is directed at the Commission itself. However, regulated entities and their advisers also need to take steps to protect their interests.

For the Commission, compliance requires three actions. First, ensure that the Charter of Consultation and Regulatory Practice is drafted or updated to cover all six matters prescribed in regulation 6. The Charter must be published, and its processes must be followed for each determination and inquiry. The Commission should also incorporate a formal review cycle into the Charter (regulation 6(e) requires processes for reviewing the Charter) and should document how it ensures best regulatory practice (regulation 6(f)). Second, compile the annual report in accordance with the checklist in regulation 7. This is a substantial exercise requiring data collection across the Commission’s entire regulatory span: numbers of notices, search warrants, premises entries, complaints, investigations, proceedings, and VCAT reviews must be collated and described. The cost-per-industry statement requires careful allocation of overheads; the Commission should use a methodology that is consistent, transparent, and defensible. Third, if the Commission wishes to share information with the three prescribed bodies, it should ensure that any disclosure complies with other provisions of the Act (e.g., that the recipient is using the information for a purpose consistent with the Act) and with state privacy laws. The Commission should maintain a record of any disclosures made under this heading to satisfy future reporting obligations or potential information access requests.

For regulated entities and their advisers, compliance is indirect but still important. The first step is to monitor the Commission’s compliance. Read the Charter once published and check that it covers the required matters. If the Charter is silent on any of the six prescribed items, the Commission is arguably not complying with the Regulations. In that case, a regulated entity could write to the Commission requesting that the Charter be updated, and could potentially object to a determination made without following the missing element. The annual report should also be examined each year. The number of information gathering notices served on the entity’s industry (regulation 7(e)-(g)) signals enforcement intensity. The number of entries onto premises (regulation 7(i)) and search warrants (regulation 7(j)) indicates whether the Commission is using coercive powers. The cost-per-industry data (regulation 7(p)) can be used in regulatory proceedings to challenge fee allocations.

Second, regulated entities should review their internal compliance programmes with an eye to the information-sharing provision. If the entity participates in the Solar Homes Program, operates commercial passenger vehicles, or deals in carbon credits, any information given to the Commission could be shared with the Clean Energy Regulator or the other prescribed bodies. The entity should therefore ensure that all submissions and data provided to the Commission are accurate and can withstand scrutiny by another regulator. Confidentiality claims should be made explicitly under whatever provision of the Act allows the Commission to protect them, but note that the Commission can override confidentiality under section 60C(3) and must report that override in the annual report.

Third, legal advisers should incorporate the Charter’s publication and notification requirements into their client’s monitoring systems. If the Commission publishes its future work programs per industry (regulation 6(a)), the client should subscribe to those publications to know when a review will affect them. Missing a public hearing or a submission deadline due to ignorance of the Commission’s notification method is not an excuse; the client is expected to be aware of the Charter’s processes.

Fourth, any entity that wishes to challenge a Commission decision should use the annual report to assess the likelihood of success. If the annual report shows that VCAT has overturned a significant number of the Commission’s decisions in that industry, that may encourage launching a review. Conversely, a clean track record of upheld decisions suggests the Commission’s determinations are robust.

Finally, practitioners advising on the sunset risk should include a provision in any long-term agreement involving Commission regulation that flags the possibility of the Regulations lapsing and the Charter or reporting requirements reverting to an uncertain state. Such provisions are rare but prudent.