Corporate Plan 2017–22

South East Water proudly acknowledges our region’s Aboriginal communities and their rich culture and pays respect to their Elders past and present.We acknowledge Aboriginal people as Australia’s first peoples and as the Traditional Owners and custodians of the land and water on which we rely. We recognise and value the ongoing contribution of Aboriginal people and communities to Victorian life and how this enriches us. We embrace the spirit of reconciliation, working towards the equality of outcomes and ensuring an equal voice.

“We’re proud to be engaging with indigenous communities to develop a long-term strategy that better integrates the cultural values and knowledge of Traditional Owners into water resource management,” Scott Collins, Environment, Engagement and Approvals Manager

Aboriginal acknowledgement

Section 01 Statement of corporate intent 4

Section 02 Business plan 8 Outcome 1 16 Outcome 2 20 Outcome 3 22 Outcome 4 24 Business enablers 26

Contents

South East Water’s Corporate Plan 2017-22 outlines our business direction and how we will deliver safe, reliable and affordable water and sewerage services that contribute to building a healthy and resilient community.It has been developed with input and engagement from our customers, stakeholders and all areas of our business. This collaborative approach ensures our plan aligns with our Urban Water Strategy, as well as priority policy areas of Water for Victoria, the State Government of Victoria’s strategic, long-term plan for managing Victoria's water resources. Importantly, it ensures our business can deliver upon our vision of healthy water for life.

The outcomes we are striving to deliver in this plan reflect what our customers have told us is important to them:

• Deliver safe and reliable water and sewage services• Provide a positive customer experience• Support a sustainable and resilient community• Operate efficiently so our charges are affordable.

Our customers have told us that they place most value on the reliability and quality of water and sewerage services. Each year our business delivers more than 120 billion litres of fresh drinking water and collects more than 100 billion litres of sewage. Our key infrastructure projects for the coming year focus on continuing to deliver these services and supporting population growth in our region by undertaking significant upgrades to water recycling plants.

During 2016 we made significant progress in improving our customers’ experience when they dealt with us; our customer satisfaction rating rose to 92 per cent, compared to 88 per cent the year before. Through the life of this plan, we will continue to strengthen our customer experience by leveraging technology to minimise customer ‘effort’ in interacting with us and by reducing the number of unplanned interruptions throughout our system.

Importantly, we do not work alone in creating future innovations to support our customers, enhance their experience and improve the way we operate our business. This includes collaborating with other water corporations, for example on the digital transformation of our industry.

Our commitment to recognising the recreational, spiritual and economic values of water is also a key priority for our business. We look forward to building upon our relationships with stakeholders in land management and water planning, particularly in relation to culturally and linguistically diverse communities, Traditional Owners and Aboriginal communities.

Protecting the environment and understanding the impact of climate change on our environment is of high importance to South East Water. In 2016, our Board of Directors endorsed a pledge to see our operations become carbon neutral by 2030, consistent with state government policy. In meeting this target, we are guided by our Climate Mitigation Strategy. This strategy outlines key deliverables including the completion of integrated water management projects at Aquarevo and Fishermans Bend, upgrades to water recycling plants and harnessing renewable energy.

For our people, we are committed to achieving and maintaining a safe, diverse and inclusive work environment with a culture founded on excellence, innovation, and safety and wellbeing for our employees, contractors and stakeholders. We have ambitious targets which are supported by

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Introducing our Corporate Plan 2017-22

our People Strategy 2021, Safety and Wellbeing Strategy, Living Safely Rules and Diversity and Inclusion Framework. In the coming years the delivery of these strategies will grow and enhance the way we work and evolve our business, ready to meet challenges of the future.

The underpinning enablers of this corporate plan are supporting excellence in our people, applying and adapting technology, high-level financial capability, forward-looking strategy and strong governance.

We would like to acknowledge all employees who have contributed to the development of this plan and are passionate and proud about working closely with our customers, local communities and stakeholders to deliver on its commitments.

On behalf of our Board of Directors and executive team,

Lucia Cade Chair

Lucia Cade Terri Benson

South East Water Corporate Plan 2017–22 3

Terri Benson Managing Director

“We take our role as an essential services provider seriously and operate in line with all obligations,” Nancy Henry, Process Engineer.

01Statement of corporate intent

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Our service area

South East Water

WESTERNPORT WATER

WESTERN WATER

GOULBURN VALLEY WATER

GIPPSLANDWATER

ThomsonReservoir

O’ShannassyReservoir

MaroondahReservoir

Yan YeanReservoir

SugarloafReservoir

SilvanReservoir

CardiniaReservoir Tarago

Reservoir

ToorourrongReservoir

GreenvaleReservoir

Upper YarraReservoir

SOUTH GIPPSLAND WATER

YARRA VALLEY WATERCITY WEST

WATER

CENTRAL HIGHLANDS WATER

BARWON WATER

South East Water is a water corporation established under the Water Act 1989. The activities of our corporation are governed by the Water Act 1989 and the Statement of Obligations issued by the Minister under Section 41 of the Water Industry Act 1994.

South East Water’s service area South East Water’s recycled water plants Melbourne Water’s Western Treatment Plant Melbourne Water’s Eastern Treatment Plant

5South East Water Corporate Plan 2017–22

Core business undertakings

South East Water

South East Water supplies residential, commercial and industrial customers across Melbourne’s south east with water, sewerage and recycled water retail services. We also own, operate and maintain water, recycled water and sewerage networks in this region. The total value of our assets is $4 billion. Our region borders more than 270 kilometres of Victorian coastline and covers a land area of 3,640 square kilometres from Port Melbourne to Portsea and approximately 30 kilometres east of Pakenham. As at 31 March 2017, our fulltime equivalent workforce totalled 554.6. Our corporate headquarters, WatersEdge, is based at 101 Wells Street, Frankston (in the heart of our service area).

iota Services Pty Ltd

iota Services is a subsidiary company wholly owned by South East Water. Its primary role is to advance the innovation and technologies generated by South East Water and to commercialise viable opportunities in selected markets. Innovative and technological solutions marketed through iota include the OneBox® pressure sewerage system used in the Peninsula ECO project. OneBox® is an intelligent sewer device that provides the ability to control and monitor pressure sewer units, pumps and other remote assets from an office or smartphone. As well as being used in Australia, OneBox® technology has been adopted by organisations worldwide including New Zealand and the United States.

For more information on iota Services, visit iota.net.au

We are responsible for

*including property connections

Melbourne Water is the wholesale supplier of water and sewage treatment in Melbourne.

Key facts

> more than 13,600 kilometres of water mains*

> more than 10,600 kilometres of sewer mains*

> more than 800 kilometres of recycled water mains*

> 82 water pump stations

> 263 sewage pump stations

> 9 recycled water pump stations

> 8 water recycling plants

> 1 stormwater treatment plant

provide water services to more than 739,000 customers

provide sewerage services to more than 710,000 customers

manage more than 25,000 kilometres of pipeline

deliver more than 120 billion litres of drinking water per year

collect more than 100 billion litres of sewage per year

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“Our Mt Martha Water Recycling Plant not only collects and treats sewage, it produces Class A recycled water and biosolids,” Ben Murdoch, Water Recycling Plant Lead Operator (pictured with Quinnie Trinh and Nimesh Virparia).

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“I can see how harnessing technology to operate our business helps us become more efficient and responsive,” Tushar Tikkoo, SCADA Manager.

02Business plan

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South East Water Corporate Plan 2017–22

In developing our business plan, we undertook an environmental scan to identify potential changes to our operating environment. Consideration was given to the broader risk landscape and emerging issues across the industry to help inform our focus over the corporate plan period. Here, we’ve identified the opportunities and challenges with the greatest potential to impact our corporation.

Opportunities and challengesSafety and leadership

Safety is fundamental to our success. Nothing is more important to us than the safety and wellbeing of our employees, our contractors and our community. We are also committed to ensuring a diverse and inclusive work environment and have in place a framework to positively foster gender equity, Aboriginal inclusion and employee engagement.

Climate change

Climate change impacts the way we design and operate our assets, and impacts the way we deliver our services. We continue to evolve how we manage our assets to deal with this through our Climate Adaptation Strategy. In line with the state government's climate policy, we have also committed to be carbon neutral by 2030, as outlined in our Climate Mitigation Strategy.

Technological capability

We will place greater emphasis on evolving and developing data and new technology to improve how we interact with our customers and operate our business. We have commenced a series of initiatives to enhance our cybersecurity measures and recently developed a framework that will lift maturity and drive continual investment in how we manage security-related risks around data and information.

Changing customer expectations

We must continuously improve our core service while also meeting the changing needs of our customers. To help guide our management efforts in this area, we’ve embarked upon a comprehensive, customer engagement program that will provide valuable customer input into how we shape our service priorities.

Our key strengthsSouth East Water's vision of healthy water for life is the aspiration behind our many activities and achievements. Aligned to our four outcomes and business enablers that are underpinned by our values, we continue to place customers, efficiency and leadership at the heart of our activites while anticipating future challenges.

We plan to continue our success in generating long-term value for our customers by assessing our strategic direction against our key strengths of:

Our operating environment

> providing a safe workplace

> developing leading-edge, innovative water solutions

> providing clean, safe drinking water and reliable sewerage services to our customers

> performing predictably and dependably

> planning, designing, building, operating and maintaining long-life assets

> top quartile performance in employee engagement

> a strong financial position

> agility in meeting the changing needs of our customers and stakeholders.

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Safety and wellbeingAt South East Water we drive solutions that enhance the safety and wellbeing of our employees, contractors and our community. We are committed to achieving and maintaining a safe and healthy workplace with a fair and just culture. This philosophy underpins a strong ethic of mutual responsibility for each other’s safety. By cultivating safety leadership at all levels, we strive for a workplace free from both physical and mental harm. To achieve a strong safety and wellbeing culture, all employees and contractors are trained to ensure their personal health and safety as well as the health and safety of their colleagues and the general public.

Governance and managementWe have governance and management frameworks to ensure we excel in meeting our statutory requirements, regulatory obligations and delivery of government policy. Our Board of Directors preside over all significant commercial, regulatory, financial and risk-focused business decisions.

Quality management systems underpin our performance against our plan. We have a number of management systems and standards in place that are subject to independent auditing and certification, and we regularly audit our operations to ensure compliance and to identify opportunities for improvement.

StakeholdersOur stakeholders include individuals, groups and organisations that affect or could be affected by our activities, products or services. Our key stakeholders include customers, developers, the community, employees, state government departments and regulatory authorities, suppliers, local councils and our business partners.

Risk managementWe maintain an enterprise risk management framework consistent with the Australian/New Zealand Risk Management Standard (AS/NZS 31000:2009 Rick Management – Principles and Guidelines) and the requirements of the Victorian Government Risk Management Framework 2015.

At South East Water, we understand that managing risk is central to our success. It’s for that reason that risk management is embedded across all of our management systems and processes.

Our risk framework is predicated on implementing a consistent, forward-looking approach to identifying and assessing the uncertainty that may positively or negatively impact our ability to achieve our objectives.

The key elements of our framework that enable this mind-set include:

• a board approved risk management policy and framework

• active management and review of the material risks that may impact on the achievement of our objectives

• continuity and emergency management plans to guide our business in case of disruption or to manage incidents and emergencies when they occur

• certified management systems for Quality, Environment, Occupational Health and Safety (OH&S) and Hazard Analysis and Critical Control Points (HACCP)

• providing assurance over key controls through a risk-based audit plan

• a comprehensive insurance program.

Our strategic risks are reported annually to the Department of Environment, Land, Water and Planning through the Water Industry Risk Reporting portal.

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Our innovative culture


We are committed to becoming a smarter, more progressive and vibrant utility. We apply fresh thinking to everything we do. Our people are encouraged to proactively drive solutions and services that anticipate customer expectations and provide better solutions for our customers.We are passionate about imagining creative solutions for our customers. Technology is rapidly transforming our industry and changing the way we provide safe and reliable water and sewerage services. We take pride in leveraging innovative solutions for the benefit of our customers, the community and the environment.

The innovation pipeline represents the development stages of our innovations. Some examples of our innovations that we are developing include:

Rain-to-hot-water solution – This innovation is aimed at reducing our reliance on drinking water. Using the technology, rainwater tanks installed at the Aquarevo development will supply hot water for non-drinking purposes such as the laundry trough with the potential to expand to a wider range of uses. Installation of the rain-to-hot-water solution is anticipated to commence within the next 12 months.

OneBox® solar pressure sewer – Building on existing pressure sewer technology, the OneBox® solar pressure sewer system ensures the transfer of sewage based on network volumes without reliance on mains power. Developed over the past year, the technology is now ready for use.

Smart rainwater tank solution – This innovative device and system aims to reduce flooding by managing the release of rainwater through the use of weather forecast data to optimise water storage. The solution has been available for a number of years, however it is being transformed to improve its functionality and reliability for installation at Fishermans Bend and the Aquarevo development.

Asbestos cement pipe relining – This innovation involves the development of technological solutions to reline existing asbestos cement pipes in a safer, less disruptive and cost effective way. The technology is currently in the process of being trialled and is anticipated to be used across our network.

Customer water insight app – Driven by customer expectations for higher billing control and water use insights, this research uses digital meter technology to equip customers with insights on their water use by appliance (such as dishwasher or shower). It will also set usage and bill targets and customers will have the ability to receive alerts for water leaks.

Customer fault alerts – This innovation involves sending SMS alerts and updates to customers impacted by water mains faults and has the capacity for customers to log network faults online. The system is being expanded across planned works and integrated with other initiatives to minimise customer disruption from network faults.

Innovation pipeline

We use a stage and gate pipeline process to develop innovations. This shows both time and staging for innovations. The size of each circle represents potential customer value.

Ideas

Jan 20

Jan 19

Jan 18

Jan 17

Feasibility

Development

Trialling and

testing

Implementing

and reviewing

GATE STATUS

STAG

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Meeting government objectives

Water for Victoria is the state government’s strategic, long-term plan for managing our water resources, now and in the future. It was developed and informed by community expectations, particularly in the areas of health, recreation, liveability, traditional ownership and economic development.South East Water’s Corporate Plan 2017-22 strongly aligns with priority policy areas as set out in Water for Victoria and the 2017-18 Ministerial Expectations.

Leadership and cultureWe recognise that to thrive in a changing world, we need to continue to evolve the way we do things and expand the capability of our people. We’re committed to safety and wellbeing and ensuring a diverse and inclusive work environment. Our business is actively addressing the priority areas of leadership and culture, particularly in relation to gender equity, Aboriginal inclusion, and employee engagement and participation.

Customer and community outcomesWe’re committed to communicating and effectively engaging with our customers and local community. Our engagement program will continue and our customer and community engagement framework will be refined to enhance emphasis on culturally and linguistically diverse and Aboriginal communities.

Climate changeWe will continue to work towards minimising the impact of our operations on the environment, including actions to reduce carbon emissions and planning to adapt to a future of warmer temperatures and reduced rainfall. We’re committed to reducing carbon emissions by 36 per cent by 2025 and to being carbon neutral by 2030. Our Climate Mitigation Strategy will guide planning toward achieving these targets.

Financial sustainabilityWe will continue to focus on efficiency and innovation to proactively identify and respond to emerging technologies, to improve our water and sewerage services while maintaining downward pressure on costs to ensure our services are affordable for all customers. Our Price Review Submission 2018-23 will seek to achieve this, while also managing an efficient and compliant business.

Resilient and liveable cities and townsWe’re committed to (and recognise the importance of) developing, delivering and participating in projects with significant liveability benefits, particularly integrated water management. This year work will continue to progress on Aquarevo (a collaboration between South East Water and Villawood Properties), which showcases integrated water management solutions in a residential development. Liveability and building a water sensitive city is also at the forefront of planning for an integrated water management system at Fishermans Bend, Australia’s largest urban renewal project. Liveability also includes the dimensions of affordability and support for vulnerable customers.

Deliver water for Aboriginal culture, spiritual and economic valuesWe’re actively engaging with Traditional Owners and the broader Aboriginal community to include Aboriginal values in our water planning and strategies. This year we will work to increase economic opportunities and participation in water management and establish stronger partnerships with Aboriginal communities.

Recognise recreational valuesDelivered through our Urban Water Strategy, we will strengthen our community engagement efforts to consider the shared benefits of water (including recreational benefits) in planning and decision making.

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“Solar panels at WatersEdge are one part of our plan to address climate change and be carbon neutral by 2030,” Jon Theobald, Environmental Manager.

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Unity

Our success is underpinned by working together. We collaborate and build partnerships to deliver real value.

Clarity

We know what we’re doing and why. We have a clear sense of purpose and a roadmap for success.

Agility

We are fast, flexible and courageous. We embrace change and the opportunity to improve.

Delivery

We strive for outcomes and celebrate achievement. We are decisive and committed. We work hard to deliver outstanding value and results.

Our values are the guiding principles by which we deliver this vision. Naturally, there are some givens that are implicit in everything we do. We will always ensure the safety of our people and our community. In our relationships, we will always build trust, be accountable and act with integrity. And no matter what, we will always show the utmost care and respect towards everyone we deal with.

Our values

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South East Water Corporate Plan 2017–22

Water is the essence of our life and our lifestyle. We all depend on it for health and wellbeing. It’s the lifeblood of our homes, our community, our parks and gardens, our schools and industry. From bringing our customers the clean water they want, to managing the sewage they don’t, we’re providing a continuous flow of healthy water for life.This is why we are in the business of providing valued water, sewerage and integrated water management services, while providing strong financial returns to the government and our community.

We will continue to be successful in doing this by generating long-term value by planning, designing, building, safely operating and maintaining long-life, water-related assets.

Our customer outcomesOur strategic plan sets out four customer outcomes that will provide South East Water with strategic direction.

Our business enablersUnderpinning our customer outcomes are business enablers that position our business to deliver on the priority policy areas outlined in Water for Victoria and to operate in a changing environment. Our business enablers are people, technology, financial capability, governance and strategy.

Key performance indicatorsOur business plan includes a set of key performance indicators (KPIs) aligned to each of our customer outcomes and business enablers. In our approach to developing KPIs, we have considered South East Water’s progress against our long-term strategic direction, our drive for organisational performance, the delivery of strategic initiatives and an evaluation of the priority policy areas of Water for Victoria.

Alongside KPIs developed from within our business, all Victorian water corporations are required to incorporate specific KPIs around finance, water services, sewerage services, customer responsiveness and the environment in their corporate plans.

In setting targets for our KPIs, we have considered historical performance and strategic targets, to reflect changing customer expectations and to build on operating efficiencies of the past. We use our corporate plan to adjust our customer service code targets based on improved performance or changed environmental conditions. Performance against KPIs will be regularly communicated throughout the business to enhance clarity of purpose and to push for continuous improvement.

Our vision: Healthy water for life

A safe and reliable water and sewerage service

We’re committed to supplying a reliable water and sewerage service now and into the future and will be responsive to the needs of our customers in the unlikely event of an interruption to service.

A positive customer experience

We’ll create more value for our customers by making it easier for them to engage with us and by providing more ways for them to better manage and control their water use and bills.

Supporting a sustainable and resilient community

We will support community liveability through integrated water management solutions, mitigating our impact on the environment, and ensuring long-term water security.

Efficient and affordable services

We’re committed to delivering efficient and affordable services, while maintaining safety and service and supporting customers in need.

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We’re committed to supplying a reliable water and sewerage service now and into the future and will be responsive to the needs of our customers in the unlikely event of an interruption to service.

Our customer research demonstrates that water and sewer service reliability and quality is our most valued activity. The priority for customers is for us to continue to mitigate any impacts on them from service disruptions. This will be delivered through research on network digitisation to enable early detection of failures and scheduling of responses, mitigation activities such as enhanced customer alerts, and trialling key performance indicators that directly measure customer disruption.

Our service delivery is supported by a strong asset management framework, with our high performance and leadership demonstrated in recent sector benchmarking. We are well advanced in aligning our systems, practices and processes to ISO 55001 to

further strengthen our asset management performance. Our key focus will be on delivering key infrastructure projects to support growth in our region, safely and sustainably addressing asbestos cement pipes, and undertaking significant water recycling plant upgrades.

Link to the priority areas of Water for Victoria:

• Resilient and liveable cities and towns – developing, delivering and participating in projects with liveability benefits

• Customer and community outcomes – communicating and effectively engaging our customers and local community

• Delivering safe and cost-effective water and sewerage services in a financially sustainable way.

1.1Develop suitable standards and test the effectiveness and cost of two potential solutions to safely replace or rehabilitate 1,600 kilometres of asbestos cement piping in our network.

1.2 Complete an assessment of our asset management system alignment to ISO 55001 and address any identified gaps.

1.3Influence the development of the Melbourne Metropolitan Sewerage Strategy addressing current and emerging issues which are relevant to our region.

1.4Progress the land purchase and undertake necessary ecological investigations for a water recycling plant to underpin integrated water management servicing for the growing Casey Clyde area.

1.5Prepare for future servicing by commencing preparatory work for integrated water management infrastructure at the Fishermans Bend precinct.

1.6Commence a low carbon treatment process to upgrade the Boneo Water Recycling Plant to meet infill growth on the Mornington Peninsula and contribute to our carbon reduction objectives.

1.7Strengthen digital network monitoring and tools to explore early detection of network faults, coupled with enhanced mitigation activities and targeted KPIs to minimise customer disruption from faults.

Strategic initiatives:

Outcome A safe and reliable water and sewerage service

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“We have one of the most culturally diverse service regions in Victoria. We recognise the importance of engaging with all customers,” David Housden, South East Water Assist Program Advisor.

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Key performance indicators:

2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Key customer outcome focussed performance measures

Unplanned water supply interruptions (WS1)Number of customers receiving 5 or more unplanned water supply interruptions in the year/total number of water customers (domestic and non-domestic) x 100A range of factors influence annual performance. Strong sector benchmarking results and customer research demonstrates satisfaction with current performance. Targets are based on previous 5 year average.

0.067% 0.070% 0.060% 0.065% 0.065% 0.065% 0.065% 0.065%

Interruption time (WS2)Average duration of unplanned water supply interruptionsA range of factors influence annual performance. Benchmarking shows leading performance and customer research demonstrates satisfaction with current performance, therefore targets are based on previous 5 year average.

89.3 min 81.2 min 87.9 min 87.7 min 87.7 min 87.7 min 87.7 min 87.7 min

Restoration of planned water supply interruptionsPercentage of planned water supply interruptions restored within the notification periodThis measure has been developed to reduce the impact of service disruptions by focussing performance on the time taken to restore service post planned interruptions.

- Baseline year

98% 98% 98% 98% 98% 98%

Rectification of bursts and leaksRectification of priority 1 and priority 2 bursts and leaksStrong sector benchmarking results and customer feedback demonstrates high satisfaction with current performance levels. Ongoing targets are focussed on sustaining our current level of performance.

P1 268P2 288

P1 250P2 284

P1 270P2 305

P1 270P2 305

P1 270P2 305

P1 270P2 305

P1 270P2 305

P1 270P2 305

Sewer spills interruptions (SS2)Number of residential sewerage customers affected by sewerage interruptions restored within 4 hours/total number of affected by sewerage interruptions x 100Customer research demonstrates satisfaction with current performance, therefore targets are based on previous 5 year average.

99.6% 99.8% 98.6% 98.6% 98.6% 98.6% 98.6% 98.6%

Disruption impactCustomer disruption impact associated with network interruptions (trial KPI)This measure aims to strengthen our focus on minimising customer disruption. We will continue to develop and trial customer insight techniques to measure the level of impact customers experience during network interruptions and to measure the benefits of different interventions.

- - - Baseline year

- - - -

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2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Other ministerial reporting directives

Restoration of unplanned water supply (WS3)Unplanned water supply interruptions restored within 5 hours/total unplanned water supply interruptions x 100

99.4% 99.1% 99% 99% 99% 99% 99% 99%

Containment of sewer spills (SS1)Sewer spills from reticulation and branch sewers contained within 5 hours/total sewer spills from reticulation and branch sewers x 100

100% 100% 100% 100% 100% 100% 100% 100%

Water qualityCompliance with water quality standards (Escherichia coli, trihalomethanes, turbidity)

100% 100% 100% 100% 100% 100% 100% 100%

Water quality complaints (CR1)Number of complaints per 100 customers 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18

Sewerage service quality complaints (CR2)Number of complaints per 100 customers 0.000 0.000 0.001 0.001 0.001 0.001 0.001 0.001

Sewage odour complaints (CR3)Number of complaints per 100 customersA range of factors influence annual performance, therefore targets are based on a 5 year average.

0.003 0.003 0.005 0.005 0.005 0.005 0.005 0.005


OutcomeA positive customer experience

2.1 Use all customer engagement insights gathered to reshape the Customer Experience Strategy and roadmap for all of business.

2.2Refine the customer and community engagement framework to ensure appropriate levels of engagement with stronger emphasis on the participation of culturally and linguistically diverse and Aboriginal communities.

2.3Continue to refine and deliver customer and community education initiatives to increase knowledge about the water cycle and support behaviour change in relation to water efficiency.

2.4Develop a program for promoting the value for money services we provide, including leveraging opportunities for cross-industry collaboration.

2.5Develop additional customer tools to provide certainty and control to meet customer expectations and drive water efficiency behaviour to avoid bill shock and support affordability.

2.6 Explore opportunities to provide customers with greater control/choice through an alternative tariff structure.


We’ll create more value for our customers by making it easier for them to engage with us and by providing more ways for them to better manage and control their water use and bills.

We have a strong history of focussing on customer experience by measuring how satisfied customers are in their interactions with us and using these insights to continually drive improvement. Customers can use their preferred channel to interact with us, including telephone, webchat and mySouthEastWater. Our customer satisfaction levels continue to be strong. We will continue this journey and simplify customer interactions by focussing on minimising customer ‘effort’, and leveraging technology, processes and training. Our customer research and market analysis highlights that customer expectations are

rapidly shifting. Customers are increasingly dissatisfied with their lack of control over their bill, and ‘bill shock’ associated with increased seasonal water use or property water leaks. In response, we will continue to research and implement initiatives to increase customers’ control over their bills and provide a level of certainty.


• Customer and community outcomes – communicating and effectively engaging our customers and local community.

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Key performance indicators:These indicators have been selected to measure our increased focus on first contact response, reducing customer effort and enhancing customer experience.

2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Customer experienceOverall customer satisfaction rating*How products and services meet or exceed a customer expectation. Our 5 year target of 92% is considered as a high-performing target against our 5 year average result of 90%.

90% 88% 92% 92% 92% 92% 92% 92%

Customer effort score*Measuring the effort required by a customer to interact with South East Water.

- - - Baseline year - - - -

Percentage of customer enquiries resolved on first contactOur ability to fully resolve a customer query the first time they contact us.


Customer valueCustomer value for money rating*A customer’s perception of the benefits and services received compared to what they have paid.


Billing complaints (CR4)Number of complaints per 100 customersOur focus on maintaining our current low level of complaints. An average of 280 billing related complaints are received per year (from a customer base of over 730,000 properties).

0.049 0.050 0.050 0.050 0.050 0.050 0.050 0.050

Energy and Water Ombudsman Victoria (EWOV) complaintsNumber of EWOV complaints per 1,000 customersOur focus is on maintaining our current low level of complaints.

0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08

*Measure based on customer feedback post interactions.


OutcomeSupporting a sustainable and resilient community

We will continue to contribute to the sustainability of the community, in addition to our core water and sewerage services. We will continue to expand the supply of recycled water to our farming communities and focus on integrated water management to implement solutions that provide the best community outcomes across the entire water cycle and ensure long-term water security. This includes the next phase of our Aquarevo development and implementing solutions for the extensive Fishermans Bend and Casey Clyde growth areas.

Our customer research demonstrates that they support us becoming a strong custodian of the environment, developing innovative solutions to further minimise sewer spills to waterways and to achieve carbon neutrality.

We will confirm the level of willingness to pay for these outcomes in our pricing submission research, which will set the timeframes for these initiatives.


• Deliver water for Aboriginal culture, spiritual and economic values

• Recognise recreational values – strengthening our community engagement efforts to consider shared benefits, including recreational benefits of water in planning and decision making

• Resilient and liveable cities and towns – developing, delivering and participating in projects with liveability benefits

• Climate change.

3.1 Develop a comprehensive fit-for-purpose water strategy to maximise recycled water use in our region including agriculture use.

3.2Deliver the first two stages of the Aquarevo development and finalise the integrated water management initiatives, including the rain-to-hot water system, prior to home construction.

3.3 Collaborate with stakeholders through a series of forums to identify new integrated water management opportunities for the region.

3.4 Engage with public open space managers to identify priority assets to be supported in severe drought situations.

3.5Implement the Climate Change Mitigation Strategy to support our pledge to achieve net-zero emissions through resource recovery initiatives and increased renewable energy generation by 2030.

3.6 Continue to encourage our customers to manage their septic tanks using best practice or where possible connect to the sewer network.

3.7 Contribute to the development of a statewide water efficiency strategy and provide leadership in targeted areas.


We will support community liveability through integrated water management solutions, mitigating our impact on the environment, and ensuring long-term water security.

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2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Effluent re-useVolume of recycling (gigalitres) Effluent re-use volume (end use) (E1)Targets account for volume growth in the third pipe schemes.

4.7 29%

5.431.8%

5.5 22%

5.8 22%

5.9 22%*

6.0 22%*

6.1 22%*

6.1 22%*

Total net CO₂ emissions (E2)Net tonnes CO₂ equivalent (tonnes) 44,954 43,555 41,573 40,410 37,385 38,049 28,969 28,609

Sewerage system connectionsNumber of existing backlog properties connected to the sewerage system network per year (number of new connections)A measure of reducing our impact on the environment. Connection targets are in line with our capital improvement program with the rollout due for completion by 2032.

372 1,183 1,000 1,000 1,000 1,000 1,000 1,000

Key performance indicators:These indicators have been selected to measure our focus on climate mitigation, continued supply of alternate water and the continued rollout of the our backlog program.

Supporting local farmers with fit-for-purpose water supply is a key strategic initiative.Pictured: Vegetable grower, Colin Gazzola, Gazzola Farms Somerville

Photo by Craig Moodie, courtesy of Department of Environment, Land, Water and Planning.

*Target to be reviewed subject to customer research and the engagement of recycled water customers (including agricultural schemes) to be undertaken as part of strategic initiative 3.1.


OutcomeEfficient and affordable services

Our customers expect us to keep their bills as low as possible. However, we recognise that affordability is not simply a matter of business efficiency and lower bills and this is why we will explore innovations in tariffs and payment flexibility to support vulnerable customers. We will continue to refine our existing customer assistance programs and implement the Essential Services Commission’s proposed amendments to the customer service code relating to family violence. Importantly, recent sector benchmarking highlighted that we are operating efficiently in the areas of asset operations and maintenance, as well as customer service and billing. To continue

to drive efficiency, we will continue to focus on opportunities associated with digital transformation of our business. This will include transitioning to a holistic approach to operating and capital expenditure.


• Financial sustainability efficiency and innovation to proactively respond to emerging technologies, improving the water services we deliver while maintaining downward pressure on costs to ensure our services are affordable for all customers.

4.1Streamline processes and develop more innovative approaches for supporting vulnerable customers including adjusting and updating our programs and codes to align with the Essential Services Commission’s family violence recommendations.

4.2As part of the Melbourne water retailers’ collaborative digital metering program, undertake an end-to-end trial with around 1,000 customers. Trial aspects will include devices (meters), communications, systems integration, IT platforms and business processes.

4.3 Reduce the cost to serve by migrating customers to current digital services.

4.4Complete rollout of the capital delivery management system to improve our capital expenditure forecasting capabilities and project prioritisation in a resource-constrained market.

4.5 Deliver business efficiencies through a review of key business processes and optimise the benefits of emerging technologies.


We’re committed to delivering efficient and affordable services, while maintaining safety and service and supporting customers in need.

4

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2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Operational cost per propertyAsset operations and maintenance cost per propertyMeasure based on projected operations maintenance and local treatment costs in line with population growth and inclusive of price increases for electricity prices and contract maintenance rates.

Operating cost per property (nominal dollars)Targets are impacted by increased costs pressures relating to services i.e. electricity.

$70.00

$144.43

$70.80

$142.63

$73.15

$143.00

$72.90

$140.48

$77.20

$144.14

$77.70

$144.65

$78.10

$145.13

$78.60

$146.08

Customer supportNumber of customers assisted through South East Water initiatives including payment plans and the plumbing assistance service, and through grants issued under the state government’s Utility Relief Grant Scheme*Targets reflect continuous improvement in customer support initiatives.

47,568 49,408 50,664 52,045 51,699* 52,769* 53,861* 54,977*

Average level of debt upon entry into the South East Water Assist programTargets are based on current performance and continuous improvement to reduce the levels of debt upon entry to the program.

$864 $819 $925 $925 $875 $825 $800 $800

* Target dependent on community rebate program funding

Key performance indicators:These indicators have been selected to measure our focus on efficiency and provide greater access to customer hardship programs.

“Digital tools and access to real-time water use can help our customers keep their bills on track,” Lucy Delahey, Customer Support Program Manager. (Pictured is Priority Plumbing’s Adam Hartskeerl with customers from Sandhurst).



• Reflective of the needs of our diverse communities• Delivering safe and cost-effective water and sewerage services in a financially sustainable way.

People

5.1 Articulate our cultural roadmap following an organisation-wide cultural audit that aligns with our strategic aspirations and will outline the behaviours and norms that will support the successful delivery of our five-year People Strategy 2021.

5.2 Implement different and flexible ways of working that support an inclusive workforce and the achievement of our strategic priorities and Employer of Choice aspirations.

5.3 Ensure workforce capabilities needed now and in the future are identified and mapped against our learning framework to support the delivery of relevant skills via a range of solutions, including secondments, traineeships, rotations and training.

5.4 Implement our Safety and Wellbeing Strategy, including initiatives that grow and enhance our safety and wellbeing mindset and mature our safety behaviours and sophisticate our safety systems.

5.5 Implement second year actions of our Diversity and Inclusion Framework in partnership with key stakeholders.

Technology

5.6 Review processes and technology solutions to assist development industry customers in doing business with us.

5.7 Invest and develop IT platforms to maintain and improve the services we deliver and to adapt to emerging technologies.

Financial capability

5.8 Leverage our strong financial capacity to invest in emerging opportunities to enhance the services we provide in the most efficient and affordable way.

5.9 Complete the Price Review Submission 2018-23 incorporating outcomes that will be delivered to customers and that reflect what customers value most.

Governance and strategy

5.10 Develop an integrated planning and reporting framework to ensure effective and sustainable planning and performance monitoring across all programs and levels of our business.

5.11 Review our policies and business processes to optimise the benefits of emerging technologies to achieve best practice governance.

Business initiatives:

Business enablers

Our business enablers position our business to deliver on our customer outcomes in the changing environment in which we operate. They include people, technology, financial capability and governance and strategy.

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“Working collaboratively encourages new perspectives and adds value to our business,” Chris Liatis, Compliance and Quality Manager (pictured with Terry Dalgleish, Group Manager Aquarevo).

27

Key performance indicators:

2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Gender equity*Gender balanced workforce in senior leadership rolesMeasures gender equity in senior leadership roles articulated in the Diversity and Inclusion Framework that align with government targets.

23% 20% 24% 30% 40% 50% 50% 50%

Employee engagementImprovement in overall employee engagement survey resultsA 1% year-on-year improvement will position employee engagement in the top decile within the relevant benchmark.

- Baseline year

1% increase year-on-year






Safety and wellbeingPlanned safety observations (senior leadership)Safety observations reinforce South East Water’s leadership commitment to a safe working environment.

Total Recordable Injury Frequency Rate (TRIFR)TRIFR is a standard measure of safety performance.

-

22.99

-

17.03

118

15.23**

141

14.50

148

10.00

148

10.00

148

10.00

148

10.00

*To achieve a gender balanced workforce in senior leadership roles by 2019-20, South East Water will actively explore and adopt all reasonable options, for example reviewing job design and workplace flexibility; implementing female leadership attraction strategies; creating growth opportunities for women within our existing workforce; and leveraging natural attrition. The creation of any new roles will be balanced with business priorities and customer service delivery levels. To exceed our corporate plan targets, strategic initiatives feature prominently in manager incentive plans.

* *This figure is the target for 2016-17.

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2014-15 result

2015-16 result

2016-17 forecast

2017-18 target

2018-19 target

2019-20 target

2020-21 target

2021-22 target

Financial performance*

Cash interest cover (F1)Net operating cash flows before net interest and tax/interest payments

3.4 3.1 3.2 3.4 2.7 2.5 2.6 2.7

Gearing ratio (F2)** Total debt (including finance leases)/total assets x 100 32.8% 35.8% 36.4% 38.9% 41.4% 43.7% 45.2% 45.7%

Internal financing ratio (F3)Net operating cash flow less dividends/net capital expenditure x 100

32.6% 65.2% 49.2% 22.7% 29.3% 34.0% 45.5% 59%

Current ratio (F4)Current assets/current liabilities (excluding long-term employee provisions and revenues in advance)

0.9 0.9 1.0 1.2 1.1 1.0 1.0 1.1

Return on assets (F5)Earnings before net interest and tax/average assets x 100 5.2% 6.6% 6.6% 6.0% 4.6% 4.7% 5.0% 5.2%

Return on equity (F6)Net profit after tax/total equity x 100 4.6% 6.7% 6.8% 6.2% 4.1% 3.8% 4.4% 4.7%

EBITDA margin (F7)Earnings before interest, tax, depreciation and amortisation/total revenue x 100

30.1% 33.1% 35.3% 34.0% 29.7% 30.5% 32.4% 33.1%

*The initial decline in annual financial performance targets is due to dividend and capital expenditure in the initial years, gradually reducing over the planning period.**Gearing as defined by Ministerial Reporting Directive definitions, debt/total assets. Gearing referred elsewhere in this document is net debt/capital.


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South East WaterWatersEdge101 Wells Street Frankston Victoria 319913 16 94ABN 89 066 902 547

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