Energy Safe Victoria€¦ · The Energy Safe Victoria Act 2005 establishes the Corporate Plan as the key instrument by which ESV operates and is held accountable by the Minister for

Energy SafeVictoria

Corporate Plan2019 – 2022

Creating a safer state

with electricity and gas

Contents

About this Corporate Plan

1) Message from the Director of Energy Safety

2) Executive Summary

Part One: ESV and energy safety3) Our Vision, Purpose and Values

4) ESV Jurisdiction

a) Electricity

b) Gas and pipelines

5) ESV organisational and regulatory governance structure

Part Two: Strategies for energy safety 6) The strategic environment

7) ESV strategies 2019/20 – 2021/22

a) Strategy for electricity, gas and pipeline safety

b) Strategy for high-energy electrical facilities safety

c) Strategy for safe complex gas installations and low voltage electrical installations

d) Strategy for safe electrical equipment and domestic/commercial gas appliances

e) Supporting delivery of the strategy

f) Delivering the strategies

g) Funding the strategies

h) Industry levies for 2019/20 – 2021/22

Part Three: AppendicesAppendix 1: ESV Business Plan

Appendix 2: Financial strategy, statements and position 2019/20 – 2021/22

Appendix 3: Legislation and regulations administered by ESV

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Regulatory Strategy | 2019 –2022

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About this Corporate Plan

The Energy Safe Victoria Act 2005 establishes the Corporate Plan as the key instrument by which ESV operates and is held accountable by the Minister for Energy, Environment and Climate Change.

The plan must be submitted for approval to the Minister and Treasurer by 31 May each year. Regulatory outcomes, outputs and activity are then reported to Parliament in the ESV Annual Report together with financial results, in accordance with the Financial Management Act 1994.

The process for developing the Corporate Plan takes account of:

• statutory objectives and functions for the regulation of gas, electricity and pipelines

• the Statement of Expectations (SoE)

• broader government initiatives and policy.

The Corporate Plan outlines our vision, purpose and values, our jurisdictional reach across the energy industry and how we are organised to regulate the industry.

There is a description of the strategic environment we are facing, especially the transformation in markets, technologies and participants, what this means regarding regulatory implications, new risks and hazards and what we will do about it.

The plan outlines the principal hazards and harm reduction we are focusing on across electricity and gas networks and pipeline infrastructure, in high risk electrical facilities and complex gas installations, and with electrical equipment and gas appliances. We detail our regulatory strategy to deal with these areas, our enforcement focus and the measures by which we will assess progress in terms of outcomes, regulatory outputs and activity.

The Corporate Plan explains how we will allocate our resources to ensure ‘duty holders’ are accountable for the safe generation, distribution and supply of energy and energy equipment as well as the design, operation and maintenance of energy infrastructure and installations. The plan signals to our stakeholders how changes in technology, the market and environment reflect in emerging risks and priorities for ESV action.

Our Strategy Enablers – Culture and Resources, Technology, Data Analytics, and Communications and Marketing – are covered as are the recommendations concerning ESV from the Government’s Independent Review of Victoria’s Electricity and Gas Network Safety Framework.

Our Business Plan for the next 12 months is detailed as is our financial strategy and our fees and industry levies for 2019/20 – 2020/21.

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Regulatory Strategy | 2019/20 – 2021/22

Message from the Director of Energy Safety

It gives me much pleasure to outline how we will continue to deliver real differences in the safety outcomes for all Victorians. This is against a backdrop of unprecedented change in our industry. New players, emerging technologies and unprecedented expansion of our Government’s commitments to renewables come at a time when the risks and hazards associated with existing energy infrastructure are also increasing.

Communities, industry and governments are rightly demanding that regulators are on top of these challenges and that the perceptions of being safe are as important as the actual safety outcomes experienced. When there is failure, and especially harm caused, it is expected that we will hold those responsible to account. At a minimum we must ensure that lessons are learnt and incorporated into safety systems and the regulatory regime.

This Corporate Plan is as much about letting you know that we understand the enormity of the challenges ahead as it is being clear what we are going to do and why. The tools or regulation require constant sharpening, our visibility and preparedness to be seen, to communicate and engage with stakeholders requires much more work. This plan is about the next few steps to continue ESV’s journey from small technical and specialist regulator to one that has a broader and deeper set of skills to do its job effectively. Implementing the Government’s endorsed recommendations from the Independent Review of Victoria’s Electricity and Gas Network Safety Framework (the Independent Review) is at the forefront of our minds.

The resource and financial implications of building an appropriately resourced and highly capable regulator are not immaterial. The additional costs of funding us will be borne by industry and eventually the community. However, improved safety outcomes deliver considerably more benefits and they are not just financial ones. The emotional and psychological impact of significant energy catastrophes as well as the loss of individual life and property ripples through our communities in ways that is not often fully appreciated. We recognise that in everything we do.

I commend this Corporate Plan to you. This will be my last as your Director of Energy Safety. It has been a privilege to serve in this role for the last decade. The governance changes foreshadowed by Government in its response to the Independent Review envision a new multi-person Commission structure for ESV. This will assist in the deepening and broadening of perspective and wisdom to carry on our great mission – keeping you safe.

Paul Fearon DIRECTOR OF ENERGY SAFETY

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Executive Summary

Global energy markets and systems are experiencing massive change, driven by new technologies and society’s demands for sustainable, affordable, safe and reliable energy supply.

The existing energy sector, consisting of a small number of monopoly suppliers of electricity and gas with ageing assets, established energy products and diminishing expertise, is now facing greater uncertainties with the proliferation of many new entrants and consumers with an increasing desire for independence and control over electricity supply and use, but possessing limited experience. New players are emerging to develop commercial opportunities in this new energy world. They are developing innovative business models and using new technology to do so, at times without regard to long-term safety risks.

This energy industry transition from a traditional to a new energy sector has complex regulatory challenges, including the skills and behaviours of existing and new players. Energy Safe Victoria (ESV) is addressing these challenges by becoming a more capable regulator, with increased resources and expertise in the field, taking a stronger line on enforcement, establishing targeted education and guidance programs, fostering partnerships with other regulators, and strengthening its analytical capabilities.

ESV Strategies 2019/20 – 2021/22

ESV strategies will be delivered over the three years of this Corporate Plan, and this Corporate Plan outlines four primary strategies for each energy sector:

• Ensuring the electricity infrastructure businesses are mitigating the risk of catastrophic fire shall remain a key focus of ESV. Ongoing audit and inspection of Electrical Safety Management Schemes (ESMS), Bushfire Mitigation Plans and Electric Line Clearance Management plans shall be informed by greater use of data and analytics. Two key focus areas in are to increase monitoring and auditing activities to ensure that power companies are keeping trees adequately clear of powerlines, and that their asset management practices are achieving acceptable and sustainable long-term safety outcomes, particularly with respect to bushfire risk. This will include investigation into assets such as power poles in the coming year.

• Electricity, gas and pipeline infrastructure safety will see ESV run education programs to encourage appropriate development around pipelines, avoiding damage to gas supply networks, and enforcing good gas network subcontractor work practices.

• ESV will increase its focus on high-energy electrical facilities, including on large scale renewables, and will also enforce the minimisation of stray current risks.

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• The focus for safe complex gas and low voltage electrical installations includes making sure that complex gas fitting and electrical work complies with safety standards and requirements. We will also ensure that municipal councils are maintaining adequate tree and powerline clearances. ESV will work with Solar Victoria to ensure that renewable installation work is done by licensed workers, and will work with stakeholders and allied regulators to support the development of a national register of distributed energy resources such as batteries installed in residential and commercial premises. There will also be safety education programs for electricians, including apprentice supervision around electrical hazards.

• A whole of government approach will be taken to the carbon monoxide (CO) awareness campaign, ‘Be Sure’. The multi-faceted winter campaign will build on existing levels of knowledge around the dangers of CO and empower Victorians to take action.

• ESV shall develop a roadmap that will provide the directions and actions to deliver the recommendations of the Independent Review.

• ESV shall continue its significant work program of remaking the electricity safety regulations to maintain currency and efficiency to ensure they are modern and fit for purpose.

• ESV will establish an electrical lineworker licensing scheme to commence from 1 January 2021. The licensing scheme will improve safety outcomes by providing ESV, as the regulator, stronger oversight of the electricity, transmission, distribution and traction networks workforce, and mandate minimum qualifications and experience that need to be maintained. An extensive consultation process will take place throughout 2020 to ensure the scheme is designed with, and for, workers, industry and the community.

• Regarding electrical equipment and gas appliances, ESV will continue to partner with Queensland to implement the Electrical Equipment Safety System (EESS) to help ensure the safe supply of electrical equipment to Victorian consumers. Independent certification processes will be facilitated, monitored and enforced to ensure that gas appliances for sale comply with safety standards.

• We will continue to work with the Victorian Building Authority (VBA) to enhance the current and future safety of gas heaters in residential settings.

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Supporting delivery of the strategy

The key capabilities needed to support and enable ESV strategies include:

• effective tools and capabilities to achieve compliance and enforce regulatory obligations, including through rigorous audit and inspection programs

• strong data analytics capabilities and reporting

• technical expertise and understanding of the industry being regulated, and

• significant engagement with entities being regulated and the public, including effective communication of regulatory requirements and safety risks.

Funding the strategy

ESV activities have been fully funded by the energy industry since its formation in 2005, by a combination of fee-for-service income, licence fees and approved levies on the electricity, gas and pipeline industries every two years.

ESV has budgeted for an income of $42.52 million for 2019/20, comprising of $24.95 million in levies and $17.29 million in fees. Total expenditure for 2019/20 is budgeted at $48.52 million, consisting of $2.42 million in capital expenditure and operating expenditure of $46.10 million.

The projected cash deficit of $3.42 million will be funded out of existing cash reserves as ESV does not foresee a requirement for debt financing in the short term. ESV maintains its strategy of utilising cash reserves built up from previous years to invest in growth and capital expenditure. Therefore, the projected cash balance at the end of 2019/20 financial year will decrease to $5.47 million from the $8.71 million forecast in 30 June 2019.

Industry levies for 2019/20 – 2020/21

Levies on energy sector participants comprise more than half of ESV’s income, which is used to fund regulatory activities. Levies recovered $22 million in 2018/19.

Levies are set for a two-year period with the approval of the Minister responsible for ESV and levied each year. New levies must be set for the first two years covered in this Corporate Plan, 2019/20 and 2020/21.

In addition to maintaining the provision of statutory services, and compliance monitoring and enforcement activities, ESV must also respond to emerging safety issues and a dynamic strategic environment. This will require ESV to take on new regulatory roles and conduct additional education, compliance and enforcement activities, and approved levies to pay for this reflect an average annual increase in cash over the next three years of $4.20 million.

The increases in approved levies in 2019/20 – 2020/21 of $5.60 million will be allocated to:

61% Additional inspection, compliance and audit activities

20% Meeting new governance requirements for ESV

8% New systems to support regulatory actions

6% Enhance capacity/capability for stakeholder engagement

5% Apprentice safety

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Independent Review of Electricity and Gas Network Safety Framework

In 2018, the Victorian Government publicly responded to the Independent Review of Victoria’s Electricity and Gas Network Safety Framework which examined the design and adequacy of the regulatory system governing the safety of Victoria’s electricity and gas networks, including ESV’s capabilities and regulatory approach. The Government supports 42 of the 43 recommendations, either fully or in-principle, to strengthen the safety framework, including 22 recommendations directed at ESV.

ESV will continue to work with the Department of Environment, Land, Water and Planning (DELWP) to design and deliver the required changes to ESV’s processes and practices in response to these recommendations to ensure their implementation reflects best practice.

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PART ONE: ESV and energy safety

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Our Vision Our Purpose Our Values

ESV will make a real difference in the safe supply and use of energy. We will be recognised nationally as the leader in the regulation of electricity, gas and pipeline safety.

ESV protects and assists the community by:

• working in consultation with the industry and community to facilitate safety outcomes

• developing and communicating safety and efficiency requirements and programs

• monitoring, auditing and enforcing compliance with the safety regulations and Acts

• administering licensing, registration and safety systems that maintain standards and skills.

At ESV the following values are embraced and expressed in our day-to-day actions, decisions and interactions with others.

Respect

Treat all staff and stakeholders with respect.

Integrity

Always act with integrity.

Partnerships

Work cooperatively with internal and external colleagues, stakeholders and customers to achieve ESV objectives.

Accountability

Accountable for all our actions.

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ESV’s electrical safety jurisdiction

TRANSMISSION NETWORKS

LOW VOLTAGE INSTALLATIONS

LICENSED ELECTRICIAN

DOMESTIC RENEWABLE GENERATION

RAIL POWER NETWORKSDISTRIBUTION

NETWORKS

LARGE SCALE RENEWABLE GENERATION COAL/GAS GENERATION

HIGH VOLTAGE INDUSTRIAL INSTALLATIONS

Production

Use

Consumer and worker safety

Transmission and distribution

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ESV’s gas and pipeline safety jurisdiction

Production and supply Use

Public safety

Transmission and distribution

NATURAL GAS AND LPG RETICULATION SUPPLY SYSTEMS

NATURAL GAS DISTRIBUTION NETWORKS

NATURAL GAS TRANSMISSION PIPELINES

BIOGAS

TYPE A GAS APPLIANCES

COMPLEX GAS INSTALLATIONS

LICENSED HYDROCARBON AND CHEMICAL PIPELINES

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ESV organisational and regulatory governance structure

ESV has established an integrated governance and management approach for the appropriate oversight of:

• organisational governance that ensures integrity and compliance that controls the risks associated with the management of work programs and activities,

• regulatory governance that ensures regulatory decision-making and actions are proportionate and demonstrate due process.

ESV governance is facilitated by a number of committees each having specific functions in relation to organisational or regulatory governance. The existing key governance elements are shown on the structure diagram opposite.

ESV’s approach to governance ensures alignment with public sector policy and values, and that employee conduct is compliant with public sector requirements and ESV performance requirements through:

• instruments of Regulatory Delegation and organisational authorisations to confer decision making authority

• a Performance Management Program across ESV, including:

– documented performance reviews and audits

– structured training programs for ESV leaders to ensure performance management plans are in place for all ESV staff

– support and advice to ESV leaders during the performance management cycle

• investigating opportunities to utilise and invest in technology to increase workplace efficiency

• utilising Internal Audit to provide assurance that regulatory and management practices are robust

• ensuring that critical information is effectively captured, stored and protected

• an Integrity and Regulatory Framework that encompasses the Code of Conduct, Gifts, Benefits and Hospitality Policy, Conflict of Interest Policy, Fraud and Corruption Policy, and supporting procedures.

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Remuneration Committee

Advises the DoES on assessment and remuneration regarding new or revised senior executive and employee positions.

Compliance and Enforcement Panel

Endorses annual plans for specific regulatory surveillance activities.

The panel also advises the DoES (or relevant delegates) on significant enforcement actions and decisions, and the planning of regulatory surveillance activities.

Audit and Risk Committee (ARC)

Advises the DoES on organisational integrity and compliance, and on specific corporate risk matters.

Risk Management Commitment

Advises the DoES (via ARC) on ESV’s enterprise risk management programs.

Safety Case Evaluation Panels (gas/pipelines and electricity)

Provides assurance advice to regulatory decision makers on acceptance of safety case-type submissions.

Internal Audit Program

Provides compliance assurance to the DoES through the Executive Management Board and on advice from ARC.

Information Management Governance Committee

Provides executive advice to the DoES (via ARC) about the need for, and management of major Information Communications Technology (ICT) projects and significant ICT system matters. This includes advice in line with Victorian Government principles for data quality, security and sharing, and project governance.

Section 8 and Statutory Committees

Statutory committees, including those convened under section 8 of the ESV Act, advise ESV or DoES on energy safety topics, including matters relating to bushfire mitigation.

Executive Management Board

• Chief Operating Officer

• General Manager Licensing, Standards and Training

• General Manager Risk, Regulatory Planning and Policy

• General Manager Electrical Safety and Technical Regulation

• General Manager Gas and Pipeline Safety and Technical Regulation

The Executive Management Board consists of senior executives with accountabilities for efficient and prudent management of organisational resources, and delivery of work programs defined in this plan. Executive Management Board meetings are the principal forum for coordination and control of organisational activities.

Individual Executive Management Board members, according to their regulatory accountabilities and delegations, advise and support the DoES regarding regulatory decisions and the exercise of powers provided under the ESA and GSA.

REGULATORY INSTRUMENTS

OF DELEGATION

DIRECTOR OF ENERGY SAFETY (DoES) (Chief Executive Officer)

Accountable Officer under the Energy Safe Victoria Act 2005, responsible for the efficient and prudent management of organisational matters. Statutory decision maker responsible for regulatory decisions and the exercise of powers under the Electricity Safety Act 1998 (ESA) and the Gas Safety Act 1997 (GSA).

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PART TWO: Strategies for energy safety

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The strategic environment

ESV faces an evolving strategic environment with transforming markets, technologies and participants creating new regulatory implications, risks and hazards. The strategies outlined in this Corporate Plan respond to this changing landscape.

An energy industry in transition

Energy markets and systems around the world are experiencing their greatest transformation since the 1950s, driven by climate change, new technologies and society’s demands for sustainable, affordable, safe and reliable energy supply.

The existing energy sector, consisting of a small number of monopoly suppliers of electricity and gas with established energy products, is now facing greater uncertainties with the proliferation of new entrants and consumers with an increasing desire for independence and control over electricity supply and use.

The decarbonisation of industry and the transition of Australia’s electricity sector towards a greater level of renewables with technologically-empowered customers who own substantial energy resources connected behind the meter, means the future of the electricity sector will impact networks at all levels.

The technology of energy supply is changing from the traditional one-way model where the majority of power is distributed by networks connecting brown coal base load power stations in the Latrobe Valley to a market and system where businesses and householders have more options to supply and manage energy.

New players are emerging to develop commercial opportunities in this new energy world, and developing innovative business models using new technology to do so.

This energy industry transition from existing to a new world brings with it complex regulatory implications relating to the skills and behaviours of existing and new players, which are detailed on the facing page.

A changing regulatory landscape

The key objective of the electricity and gas network safety framework is to protect the Victorian community from the risks associated with the supply and use of electricity and gas. As the energy products and industry changes, the regulatory framework and the methods implemented by ESV need to adapt to these changes.

Future initiatives, including ESV’s response to the ‘Independent Review of Victoria’s Electricity and Safety Gas Network Safety Framework’, will build on the work already completed to enhance community safety and augment ESV’s regulatory performance.

The regulatory strategies identify the regulatory challenges, objectives and enforcement focus. The outputs are typically delivered or monitored over the year of the business plan. Business plans include performance measures. The outcomes are generally longer term and can take several years to be measurable.

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REGULATORY IMPLICATIONS

Many players to track

Defects passed on to others

Unsafe assets/ installations

Gaps in regulatory regimes

Gaps between skills and tech

demands

Blurred links between safety decisions and

eventsInadequate

investment in expertise and

assets

Unsafe assets/installations

Gaps in regulatory regimes

Delegation of safety to others

EMERGING NEW ENERGY

SECTOR CHALLENGES

Short term safety

horizon

New technology

and business models

Inadequate experience

Many new players

New skills and expertise needed

Profit driven

Working ageing

assets longer

Accepting more risk

Cutting costs

Management of risk Deferring

investment in assets and

training

Natural monopoly

disappearing

EXISTING ENERGY SECTOR

CHALLENGES

Building partnerships

with other regulators

Targeted education

and guidance

Increasing field

presence

Acquiring specialist expertise Building

a more capable regulator

Better informed by data

ESV ACTIONS

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Strategy for electricity, gas and pipeline infrastructure safety

Electricity and gas is supplied to households, businesses and industry through large networks. Pipelines convey large quantities of fuel gases, liquids and chemicals for industrial purposes or to supply fuels to consumers. Electricity ‘poles and wires’ are easily identified in the streetscape and countryside, but gas networks and large pipelines are usually hidden underground; all need to be designed, built, operated and maintained to prevent dangerous failures, and all are susceptible to damage by environmental and man-made threats.

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Gas supply networks and pipelines

Regulatory Challenges

Third parties damage gas supply networks 3275 times on average each year; some of the main causes include failing to make reasonable efforts to locate the network, and installation supply lines not being uniformly located.

Strategic Objectives

ESV will:

• work with gas supply companies to establish a database of causes of network damage by third parties

• advise and encourage third parties to improve their practices when they do not have or follow proper process to locate services.

Enforcement Focus

• Prosecute repeat offenders - those who do not make reasonable efforts to locate the network and continue to cause damage and/or harms.

Outputs

• Network database is established, with sustainable analysis and reporting in place. Common causes understood

• Establish an Offenders Register to identify repeat offenders.

Outcomes

• Gas supply is not interrupted due to damage and the community is protected (zero deaths and serious injuries)

• Asset owners have implemented strategies and ESV approved plans to reduce the occurrence of asset damage by addressing common causes

• 20% reduction in hits to gas mains by 2022.


Inadequate quality control of subcontracting work by the gas supply companies can lead to shortened life cycle of assets and gas leaks, resulting in increased public risk now and into the future.


ESV will:

• increase field resources to inspect subcontractor work practices

• conduct more investigations, audits and inspections to ensure Distribution Businesses (DBs) improve their oversight of subcontracting work quality.

Enforcement Focus

• Direct a cessation of work where there is an immediate safety risk

• Prosecution in the event of a failure to address systematic issues, and/or where harm is caused.

Outputs

• A network database is established to record findings of ESV audits, inspections and investigation activity, with sustainable analysis and reporting in place.

Outcomes

• Common causes of poor network works practices understood by asset owners and strategies for reduction in occurrence identified and implemented

• 20% reduction in nonconformance identified at ESV pipeline inspections

• Zero deaths and serious injuries caused by poor work practices of asset owners and their subcontractors.


Increasing numbers of people are living near pipelines, without risks being fully assessed by planning authorities and pipeline licensees. In addition, there are around 71 near-miss strikes on pipelines each year, which is likely to increase as more people move into the areas where pipelines are buried.


ESV:

• will support with councils and the pipeline industry to implement a Latrobe Valley pilot program to develop and test new planning mechanisms

• has engaged planning expertise to assist in educating/communicating with council planners

• will continue to run three roadshows a year to raise pipeline awareness with council planners, as well as facilitate communication between pipeline operators and council planners, and act as an independent arbitrator where necessary.

Outputs

• Land Development Presentations will be delivered to all Victorian councils by December 2019.

Outcomes

• ESV is notified of instances of land development without engagement by the pipeline licensee when it becomes aware

• LaTrobe Valley Pilot Program review of existing planning controls in the Latrobe Planning Scheme to be finalised by December 2020.

GAS SUPPLY NETWORKS ARE REGULARLY DAMAGED BY THIRD PARTY INTERFERENCE

POOR CONTRACTOR WORKSPRACTICES MAKE GAS SUPPLY NETWORKS UNSAFE

RESIDENTIAL DEVELOPMENTS ARE OCCURRING NEAR PIPELINES WITHOUT FULL CONSIDERATION OF THE RISKS

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Network and pipeline operators must comply with safety requirements and conditions imposed by their licences, but must also submit and agree with ESV plans for managing foreseeable risks to people and property – including bushfire mitigation for electricity network operators – to achieve acceptable levels of safety.

ESV’s strategy for electrical networks will include comprehensive monitoring and audit programs to ensure that power companies are prepared for the challenges of declared bushfire seasons.

Electricity supply networks

NON-COMPLIANT VEGETATION CAUSES FIRES IN HIGH BUSHFIRE RISK AREAS


• There have been instances of high levels of power company non-compliance with safety requirements to keep vegetation away from power lines. This has improved but more work must be done to reduce fire risk levels

• Power companies are adopting innovative approaches to achieve vegetation management compliance that are not yet proven to be effective at mitigating fire risks

• Two to three privately owned power lines in poor condition fail each week, creating a fire risk.


The team will track the progress of the power companies’ rollout of innovative programs, ensuring they are included in their accepted Bushfire Mitigation Plan. ESV will hold the companies to account if they do not meet these bushfire safety objectives.

ESV will use its regulatory powers to ensure fire risks are minimised through:

• responding on a case-by-case basis where privately owned power lines are in poor condition and need to be repaired or placed underground to address fire risks

• ESV inspectors conducting field inspections to validate power companies tree clearance programs, test for compliance and drive rectification of any inadequate work

• overseeing power companies programs to implement new fire prevention technologies and undergrounding of power lines

• progressing the review of the HBRA/LBRA1 boundaries across the state.

Enforcement Focus

• Prosecution of network operators who fail to prevent contact between high voltage lines and trees, or fail to maintain clearances between vegetation and electric lines

• Formal determinations and directions for network operators to rectify failures to follow either regulatory requirements or agreed safety plans

• Fines for network operators who fail to implement new technology and upgrades into their networks according to mandated timeframes

• Issue formal directions to support network operators disconnecting private power lines at risk of causing fires

• Force the underground replacement of failed private power lines within 60 days.

Outputs

• ESV reports on compliance rates of responsible persons

• Powercor HBRA/LBRA boundaries reviewed.

Outcomes

• Severe weather contact between powerlines and vegetation incident rate below 0.56

• 20% reduction in the number of non-compliant spans managed by the distribution businesses

• Transparent reporting of compliance rate of municipal councils and ongoing 20% improvements in compliance rates thereafter.

1 Hazardous bushfire risk area/Low bushfire risk area

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ASSETS AND POWERLINES IN POOR CONDITION ARE UNSAFE FOR PEOPLE AND PROPERTY


• Power companies are trying to extend asset life to cut costs, but asset failure incidents raise questions about the adequacy of their asset management decisions

• There is insufficient evidence to demonstrate that power companies are adequately scheduling long-term asset replacement based on an accurate picture of asset condition.


ESV will test if power companies’ asset maintenance and replacement is adequate to prevent safety issues - particularly bushfire risk - arising from asset failure by:

• broadening the scope of ESV audits of power companies’ accepted management systems, to test that they accurately anticipate asset condition problems and ensure action to prevent failure

• refocusing field works practice audits by ESV, to test the validity and accuracy of power companies’ inspections that establish asset condition

• establishing a new team of asset inspectors to independently test the validity of inspection methods used by power companies to establish asset condition, and to identify urgent safety rectification issues

• introducing a new program of work to determine whether distribution business asset management practice is designed to deliver sustainable long-term safety outcomes

• acquiring power pole asset condition data from power companies to independently assess the adequacy of forecasted replacement programs.

Enforcement Focus

• Formally instruct operators to rectify identified immediate safety issues, and to prevent future incidents by amending agreed safety plans.

Outputs

• Publicly available reports on asset management performance focusing on safety

• Reports on asset management on Powercor due December 2019 and AusNet Services due December 2020.

Outcomes

• Downward trend reduction in asset failure rates under safety critical circumstances

• Severe weather asset failure incident rate below 1.21.

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Strategy for high-energy electrical facilities safety

A high-energy electrical Installation is a place or network that:

• needs significant electricity from the Victorian supply network, in order to run industrial processes, provide public transportation services, or provide power to multiple consumers, or generates electricity to supply the Victorian supply network, and

• operates at high voltages or high supply currents.

These higher risk installations are safe when they are built, operated, repaired and maintained to rigorous safety standards. They must be by certified and only operated by licensed workers. ESV’s strategy for high-energy facilities addresses the different safety outcomes that need to be achieved across a broad sector that ranges from ageing industrial installations to increasing numbers of large-scale renewal generation facilities.

WORKER EXPOSURE TO HIGH-ENERGY ELECTRICITY


Recent incidents indicate that the electrically hazardous environment of the existing industrial world is becoming more hazardous because:

• high-energy electrical equipment is ageing and if not replaced or maintained may become potentially more dangerous

• changes in an ageing workforce has led to the loss of safety intellectual property and undocumented safety practices

• there has been inadequate assessment of risks to safety in the redesign and modification of these installations

• the fast growing renewables sector is attracting new players using new technologies, but they may be unfamiliar with Victorian safety standards and requirements.


ESV will establish a team specifically to conduct regulatory monitoring of industrial high-energy installations in order to test that:

• adequate consideration of safety risks has been included in modifications and changes to the installation

• there are documented systems and procedures to ensure dangerous electrical work is done safely and competently, and specifically to address high-energy hazards.

This team will also inspect the actual safety of the installation to make sure that:

• the installation is appropriately maintained to acceptable levels of safety

• arc flash hazard mitigation practices have been implemented.

ESV will audit and inspect renewable energy facilities to establish that:

• competent and licensed workers are used as required by Victorian regulations

• the installation is designed and operated to comply with relevant Australian standards, including the Australian Wiring Rules and the Blue Book for high voltage equipment.

ESV will also educate and produce guidance material as needed to advise on identified safety issues.

Enforcement Focus

• Direct the rectification of non-compliance and inadequate safety practices.

Outputs

• An audit and inspection strategy that is informed by risk

• Unlicensed and unsafe workers are identified and prosecuted and/or required to prove competency to resume working.

Outcomes

• The number of deaths and serious injuries caused by equipment failures or high-energy hazards will trend towards zero

• Reducing trend in unsafe/defective equipment caused by hazardous installation modifications.

Industrial facilities and renewable energy facilities

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UNSAFE INSTALLATIONS WITH MULTIPLE DUTY HOLDERS


• Privately owned high voltage supply systems in multi-tenanted buildings may not be maintained to the same technical and safety standards as power company networks, and the private owners may not have the competencies to safely design, construct, operate and maintain them

• Micro-grids represent an emerging business model for supply networks to be privately owned without meeting the standards for safe construction, operation and maintenance.


ESV will continue to assess emerging alternatives for the supply of electricity that differ from the traditional model of ownership and control by power companies. This work will seek to:

• define pictures of alternative electricity supply models, their safety risks, and possible timelines for their realisation

• draft a cross-government position on the regulatory framework that could apply to these models, following collaboration with other agencies involved in the regulation of electricity supply.

Outputs

• A report outlining the potential micro-grid models and associated risks

• Regulatory responsibilities, overlaps and gaps are documented.

Outcomes

• ESV is adequately prepared via risk monitoring to respond to new and substantive risks.

STRAY CURRENT EXACERBATES THE CORROSION OF METAL ASSETS


Victorian rail infrastructure power networks and projects impact the optimisation between systems that minimise stray current production, which is a corrosion risk to buried metal infrastructure.


ESV will use its regulatory powers to minimise stray current by:

• assessing the adequacy of stray current minimisation measures proposed in rail system designs

• reviewing rail project designs to ensure adequate stray current mitigation capability

• working with Metro Trains Melbourne on a pilot program to determine and assess the stray current effects of increased energy recovery measures in the train network

• establishing a cathodic protection system audit program to identify operators that are not compliant with their registration to the detriment of other asset owners.

Enforcement Focus

• Direct asset owners who generate stray current to install mitigation systems, or to reduce the amount of stray current produced.

Outputs

• A Victorian Electrolysis Committee escalation process to support the Electricity Safety Act is established and implemented

• The stray current mitigation capability of all applicable rail infrastructure projects are reviewed by ESV

• Cathodic protection systems are reviewed, registered and audited by ESV.

Outcomes

• Zero non-compliance by rail power network operators with regulatory requirements to minimise stray current risks

• Zero instances of unprotected licensed pipeline assets due to stray currents

• Zero instances of non-compliant cathodic protection systems with registration conditions.

Microgrids and multi-tenancies Rail power networks

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Strategy for safe complex gas installations and low voltage electrical installations

An ‘Installation’ is a place (usually a building) that electricity or fuel gas is supplied to, so domestic and commercial electrical equipment and gas appliances can be used.

ESV’s strategies for safe installations focus on ensuring that low voltage electrical and complex gas installations are safe when they are built, repaired and maintained by competent, licensed and registered tradespeople, who follow technical guides and comply with legal requirements, and prove the installation is safe to use through mandatory testing.

Gas appliances, piping, electrical cables, switches and other parts of an installation must comply with Australian standards for safety, and many must be individually certified as being safe to use.


At initial inspection by ESV (and before rectification), complex installations have a 22% non-compliance rate due to gasfitters:

• undue reliance on ESV checks

• complacency regarding compliance with Australian standards

• inability to apply Australian standards when working on complex installations.


ESV will establish a formal data share agreement with the VBA (the authority that registers gasfitters) to identify:

• incompetent gasfitters

• ambiguity within Australian standards; ESV will publish technical guidance to clarify where a technical standard is unclear.

Enforcement Focus

• Prosecute any gasfitter who completes or modifies a complex installation without notification to ESV

• Enforcement action against gasfitters that repeatedly carry out non-compliant work, and/or cause harm.

Outputs

• Establish an offenders register to identify repeat offenders.

Outcomes

• The number of deaths and serious injuries caused by defective or unsafe gasfitting work in complex gas installations will trend to zero

• The number of complex gas installation gas leaks caused by defective gasfitting work will trend to zero

• Reduction in non-compliance rate from 22% to 15% by 2022.

Complex gas installations

INCOMPETENT GAS FITTING WORK LEADS TO UNSAFE COMPLEX GAS INSTALLATIONS

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Low voltage installations


• There are increasing technical requirements and decreasing experience and technical skills in the licensed electrical work industry

• Increased complaints and defect rates detected through COES audits indicate an increased rate of electrical work non-compliant with safety requirements

ESV will aim to ensure that electrical workers manage electrical hazards while working and that the installation they do work on is safe through:

• educating electricians through industry forums and training events on key safety matters, trends and electrical equipment issues, particularly not working live on low voltage installations

• target the marketing of safety issues to electrical apprentices (e.g. not working live) and their supervisors

• respond to complaints of defective or unsafe work to ensure rectification of safety issues and defects.

Enforcement Focus

• Prosecution of individuals carrying out unlicensed or unregistered electrical work

• Removal of licences from inspectors where evidence shows they certified an installation but failed to attend the site, or failed to identify hazardous installation defects

• Suspension of the licenses of electrical workers who do work that leaves an installation unsafe, until they can prove competency through further education/testing as appropriate.

Outputs

• ESV to conduct 1000 worker briefings

• ESV reports on enforement action on incompetent and unsafe electrical work.

Outcomes

• Decreasing incidents of harm to electrical workers

• Decreasing complaints and reports of unsafe or incompetent installation work.


Non-compliance rate of up to 30% for maintenance of clearances between trees and power lines in urban areas; previous incidents have shown that this can cause electric shock potential for people in houses and public spaces.


ESV will conduct a robust inspection program of urban vegetation compliance by municipal councils and power companies that will:

• collect sample data of vegetation management compliance rates to establish urban electrical safety levels

• identify high risk areas for prompt rectification, and direct rectification plans for other non-compliances

• educate municipal councils on regulatory compliance.

Outputs

• Transparent reporting of compliance rate of municipal councils.

Outcomes

• Zero deaths and serious injuries caused by urban vegetation mismanagement

• Continued increase in compliance rates overtime.

INCOMPETENT CONVENTIONAL INSTALLATION WORK BY LICENSED ELECTRICAL WORKERS CAUSES SAFETY ISSUES

UNSAFE INSTALLATIONS AND PUBLIC SPACES

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Forecast increases in the installation of domestic renewable energy systems creates the potential for more fires and safety incidents due to defective/unsafe installation of solar panels and batteries.


ESV will:

• continue in partnership with Solar Victoria to ensure renewable electrical work is done by licensed workers, and to educate on installation compliance requirements

• work with DELWP and AEMO to provide information from COES system to AEMO for verification of the information provided by distribution businesses to the Distributed Energy Register

• implement skills maintenance courses before licence renewal to test electrician’s competency with changes to standards and Wiring Rules

• maintain offenders register to track repeat offenders and support strong enforcement action for further offences

• implement ESVConnect for registering and maintaining COES to:

– provide more efficient means for licensed workers and registered contractors to comply with statutory requirements

– develop a compliance database that allows ESV to provide education on compliance trends to industry

– support the implementation of a new audit program by 2021 that tracks the rectification of defects.

Enforcement Focus

• Prosecution of individuals carrying out unlicensed or unregistered electrical work

• Removal of licences from inspectors where evidence shows they certified an installation but failed to attend the site; or failed to identify hazardous installation defects

• Suspension of the licences of electrical workers who do work that leaves an installation unsafe, until they can prove competency through further education/testing as appropriate.

Outputs

• ESV monitors and reports on safety critical defects rates

• ESV monitors and reports on the pass rates for the LEA.

Outcomes

• Zero deaths and serious injuries caused by defective or unsafe electrical work by licensed electrical workers installing renewables

• 10% reduction in the number of installation fires caused by defective electrical work

• 10% reduction in the safety critical defects rate confirmed by ESV

• 10% improvement in pass rate for first LEA attempt

• Reduction in the number of repeat offenders.

DEFECTIVE INSTALLATIONS OF RENEWABLES ARE UNSAFE FOR PEOPLE AND PROPERTY

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Strategy for safe electrical equipment and domestic/commercial gas appliances

Electrical equipment ranges from consumer goods – such as washing machines, televisions and smart phones – through to large industrial machines. Switches, plugs and switchboard components in a building are also electrical equipment. Gas appliances are typically used in domestic settings, and include water heaters, cooktops, space heaters, and outdoor appliances such as BBQs. Commercial catering appliances are typically used in commercial kitchens and restaurants.

Electrical equipment and standard gas appliances are safe when designed and manufactured to Australian safety standards, and where the manufacturer has considered how to mitigate the specific and foreseeable risks of use by a consumer. Suppliers of equipment and appliances to Victorian consumers must ensure that these requirements have been met, and, in some cases, ensure that an expert independent accredited test laboratory has tested the electrical equipment and gas appliance and that a recognised certification body has certified that the particular equipment or appliance is safe (compliant with relevant standards). Where equipment or an appliance is permanently connected to a gas or electrical installation the work must be done by competent, licensed and registered tradespeople.

ESV’s strategies for safe gas appliances includes continuing work with the Victorian Building Authority (VBA) to raise community awareness of carbon monoxide risks and ensure the installation and testing of gas heaters in residential settings is done competently by registered gasfitters.

Electrical equipment supply and certification is now managed through a developing national approach that ESV (Victoria) and Queensland have pioneered, and ESV’s strategies include implementation of this Electrical Equipment Safety System (EESS). Gas appliance certification is now also managed through a national approach pioneered by ESV.

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Strategic: Objectives

ESV will:

• continue to ensure that gasfitters are competent to perform gas appliance servicing and testing to address carbon monoxide hazards, in conjunction with the appliance owner

• implement new requirements for the cyclic recertification of high risk appliances, with the agreement of all Australian technical safety regulators

• continue to lead the improvement of Australian standards

• instruct all certification bodies to implement additional certification conditions, where deficiencies are identified, to ensure safety.

Enforcement Focus

• Enforce appliance recalls where there is evidence that the appliance is unsafe or can be dangerously misused

• Prosecution of appliance suppliers that persistently supply uncertified products to Australian consumers

• Through the certification process, prohibit the sale of non-compliant products.

• Coordination with the ACCC to recall equipment supplied to Victorian consumers that is proven to be of unsafe design or manufacture, and is likely to cause further incidents

• Prohibit the further sale of equipment that is proven to be unsafe to use, or is susceptible to installation errors that may make it unsafe.

Outputs

Successful implementation of the EESS and establishment of risk and data driven ESV monitoring processes.

Outcomes

• Industry and public can access information about certified products and registered suppliers

• Government appointed Senior Committee of Officials has oversight of progress and the implementation of EESS.

• 20% reduction in the number of deaths and serious injuries caused by unsafe electrical equipment of unsafe products in the marketplace

• 20% reduction of unsafe products in the marketplace

• 25% reduction in the number of electrical shocks or domestic fires caused by high risk products.

Outputs

• Requirements are developed for the servicing of open-flued gas heaters

• All certification bodies are audited by ESV for compliance to schemes rules and appliance standards

• Establish and implement new requirements for the periodic recertification of high risk appliances.

Outcomes

• Gasfitters identify and rectify carbon monoxide hazards in gas heaters during servicing (zero deaths or serious injuries)

• 100% of certification bodies comply with ESV requirements for block flue and downdraught testing of open-flued gas heaters (OFGH).


Unsafe gas appliances may enter the retail market because:

• current certification processes are unable to ensure appliances stay safe following certification

• certification processes do not adequately consider possible appliance misuse.

DOMESTIC/COMMERCIAL GAS APPLIANCES ELECTRICAL EQUIPMENT


ESV will partner with Queensland’s Electrical Safety Office (ESO) to implement the Electrical Equipment Safety System (EESS) to:

• increase supplier visibility

• provide a national service to enable the public to identify safe products

• increase the scope of product check/testing programs to better identify unsafe equipment or non-compliant suppliers

• develop EESS databases to gather evidence to identify repeat offenders, market trends and push for improvements in safety standards through ESV’s membership of international and Australian standards committees.

Enforcement Focus

• Prosecution of equipment suppliers that deliberately continue to supply unsafe products to Victorian consumers

• Enforcement action against suppliers that fail to comply with EESS requirements.


The modern marketplace allows consumers to unwittingly access unsafe products.

Uncertified gas appliances are unsafe to sell and use

Uncertified electricity appliances are unsafe to sell and use

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Supporting delivery of the strategies

The key capabilities to support and enable the ESV strategies detailed in the previous section are shown here. They include:

• effective tools and capabilities to achieve compliance and enforce regulatory obligations, including through rigorous audit and inspection programs

• technical expertise and understanding of the industry being regulated

• strong data analytics capabilities and reporting

• strong engagement with entities being regulated and the public, including effective communication of regulatory requirements and safety risks.

Culture and resources

A committed work culture, coupled with the right resources – people, facilities and tools – ensures that ESV will have the capability and capacity to address safety issues and monitor compliance, now and in the future. ESV investment in culture and resources enables:

• the acquisition and development of the regulatory capabilities that ESV needs

• determination of levies and fees that support ESV’s commitment to facilitating community energy safety objectives

• investment in long-term initiatives that ensures ESV remains a modern regulator and in touch with new technologies

• leadership competencies in senior staff that ensure ESV remains a strong and effective regulator

• diversity and inclusion to drive fair, proportionate and transparent regulatory decision making

• staff with the necessary resources (e.g. phones, laptops, desks) to safely and efficiently perform their role.

Technology

The implementation of ‘right sized’ new technologies enables ESV to increase its regulatory impact by:

• enhancing the efficiency and usability of ESV’s internal and external technology platforms

• maintaining and upgrading ICT systems to ensure effective management of ESV operations

• ensuring that critical information is effectively captured, stored and protected.

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Data and analytics

ESV needs to continually develop its data and analytics capability to become more risk focused, evidence based and targeted in its regulatory activities. As the establishment of the foundation elements is underway, the focus will shift towards building a detailed safety profile for Victoria.

ESV will make a real difference by progressively improving how tangible safety outcomes are measured and communicated. Data and analytics capabilities will also be applied to improve value for money, in how ESV services are delivered.

Communications and marketing

ESV invests in education and communication programs, campaigns and events to:

• inform the public about how to reduce energy safety risks

• educate industry about safety standards, requirements and risks

• change community behaviour around energy safety.

ESV IMPROVES STAKEHOLDER CONNECTION


• The electrical and gas industry sectors need to interact with ESV in order to comply with requirements for licensing, approvals, and declarations of electrical safety, but have found it cumbersome and time consuming to use manual and paper-based systems.


ESV will continue to expand its digital platform for industry compliance – ESVConnect – with new modules for different industry sectors, in order to:

• deliver a step-by-step process to make regulatory compliance clear and efficient

• provide users with a consistent experience of lodgement, assessment and approval interactions with ESV.

Outputs

• ESVConnect platform for licensing and COES to go live 2019

• Improved ESV staff efficiencies.

Outcomes

• Electricity and gas industry sectors achieve regulatory compliance, at reduced cost, in less time

• 10% increase in COES usage

• Licence and registration applications approved within 10 days.

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ESV ASSISTS APPRENTICES TO UNDERSTAND SAFETY


Poor supervision and mentoring of apprentice electricians – with inadequate experience managing electrical hazards – has led to a rise in incidents and fatalities of these vulnerable electrical workers. Since 2015, ESV has investigated five electrical worker fatalities, of which four were apprentices and four were under 25 years of age.

Strategic ObjectivesESV will continue to:

• raise awareness of electricity hazards with first year apprentices through Registered Training Organisations (RTOs), and particularly the importance of following safe work practices and using appropriate safety equipment on the job.

• continue to support eligible first year apprentices through issuing Lock Out Tag Out (LOTO) kits that include low voltage insulating gloves to protect against accidental contact with live parts, such as when testing or fault finding, and lock out devices and danger tags.

Outputs • ESV presentations and guidance to RTOs

• Report number of eligible first year apprentices engaged and LOTO kits issued.

Outcomes• Zero apprentice deaths and serious injuries attributable to poor supervision.

ESV ENCOURAGES ACTION ON THE DANGERS OF CARBON MONOXIDE


Gas heaters can become hazardous and produce poisonous carbon monoxide (CO) if not serviced properly, or changes are made to the building they are installed in.

Many homes have a gas heater installed, with a large number of older appliances still being used, particularly in rental premises. The owner is responsible for ensuring the ongoing safety of a gas heater, but awareness of the dangers of CO and need to take action is low.

Strategic ObjectivesESV will continue to deliver its behaviour change campaign commenced in 2011 that encourages owners to get their gas heaters serviced at least once every two years by a qualified gasfitter

The campaign will be expanded to empower users of gas heaters to mitigate the risks of CO poisoning from an open-flued gas heater.

Outputs • A comprehensive broad based statewide awareness campaign is delivered..

Outcomes• Increased rates of gas heater owners taking action to have gas heaters serviced,

measured on an annual basis

• Increased rates of gas heater users applying safe practices for use, measured on a six-monthly basis.


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Delivering the strategies

The strategies support programs detailed in this Corporate Plan are scheduled to be delivered over the next three years of this Corporate Plan.

Progress against the delivery of these strategies, and safety outcomes achieved, will be detailed through:

• ESV’s routine reporting, provided to the Minister for Energy, Environment and Climate Change and DELWP

• ESV’s Annual Report, tabled in Parliament and published on an annual basis on the ESV website

• published safety performance and other safety and technical reports

• technical guidance for industry (notes and factsheets)

• regulatory policy and compliance with Acts and regulations.

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Major Deliverables 2019/20 2020/21 2021/22

Jul-Dec 2019 Jan-Jun 2020 Jul-Dec 2020 Jan-Jun 2021 Jul-Dec 2021 Jan-Jun 2022

Infrastructure Strategy Objectives

Facilitate and encourage appropriate developments around pipelines through education programs and mediating between parties

Jointly support a trial of new planning mechanisms

Educate council planners and mediate disputes

Encourage and enforce third parties to adopt appropriate practices that avoid damaging gas supply networks

Establish an offender database and prosecute repeat offenders

Establish an asset damage database, and advise and encourage contractors on good safety practices

Monitor and enforce good gas network subcontractor works practices

Increase field inspections of subcontractor works practices

Audit and investigate gas supply company contractor oversight arrangements

Monitor and enforce power company and responsible persons compliance with vegetation management requirements to mitigate bushfire

Continue with extensive field inspections of power company tree clearance compliance with ESV approved plans →

Monitor the effectiveness of innovative power company vegetation management programs →

Oversee power company implementation of fire prevention technologies/programs →

Monitor, inspect and enforce adequate asset management by power companies to test acceptable safety outcomes are being achieved

Broaden audits of power company systems to test the adequacy of asset replacement decisions →

Refocus works practice inspections to test the accuracy of power company asset condition testing methods →

Commence field inspections to validate power company asset assessments →

Acquire power company asset condition data to assess the adequacy of asset replacement plans →

High-Energy Installation Strategy Objectives

Monitor and enforce acceptable high energy safety practices and control by industrial installation operators

Produce guidance on identified safety issues

Field inspections of high energy installation safety complianceEncourage and enforce large-scale renewable installation operators to comply with safety standards and requirements Produce guidance on identified safety issues

Lead the development of a cross-government position on the regulation of alternative electricity supply models

Define pictures of alternative electricity supply

Develop a cross-government regulatory framework Regulate emerging supply models →

Monitor, facilitate and enforce the minimisation of stray current to acceptable levels, by rail operators and Cathodic Protection System operators

Assess the stray current mitigation adequacy of rail infrastructure projects →

Assess proposed heavy rail energy recovery trials

Establish auditing of excessive Cathodic Protection System stray current production

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Complex Gas/Low Voltage Electrical Installation Objectives

Educate, inspect and enforce complex gas installation gas fitting work and installations to comply with safety standards and requirements

Prosecute unapproved complex gas fitting work

Address Australian Standards ambiguities

Produce guidance on technical safety issues

Monitor, educate and encourage compliance with urban vegetation management safety requirements by municipal councils and other responsible persons

Increase field inspections of municipal council tree clearance compliance safety standards

Direct municipal councils to implement rectification plans

Educate and enforce the installation and inspection of renewables and new technology to comply with safety standards and requirements

Implement ESVConnect to make compliance easier

Establish a compliance database Prosecute repeat offenders →

Educate electricians on safety matters including the supervision of apprentices around electrical hazards →

Implement skills maintenance training and testing for re-licensing of electriciansEducate and enforce electrical installation work to be conducted safely by electricians, and so that installations comply with safety standards and requirements

Work with Solar Victoria to ensure renewable installation work is done by licensed workers

Direct the rectification of reported unsafe installations and electrical work →

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Electrical Equipment and Gas Appliance Objectives

Partner with Queensland to establish the Electrical Equipment Safety System (EESS) as a means for ensuring the safe supply of electrical equipment to Victorian consumers

Use EESS data to target online supply channels and drive compliance

Audit and educate suppliers in relation to EESS requirements

Increase product check testing activities through a national approach

Monitor, facilitate and enforce independent certification processes to ensure that gas appliances comply with safety standards as long as the product is sold

Implement cyclic recertification of gas appliances

Instruct certification bodies to increase certification requirements, where safety issues identified

Strategy Support Objectives

Continue to develop a strong, diverse and capable workforce to address current and emerging safety issues

Develop the leadership competencies of senior staff

Enhance workforce diversity to support fair, proportionate and transparent regulatory decisions

Enhance and develop regulatory capabilities to be an effective modern regulator

Implement ‘right-sized’ technologies to continually improve ESV’s efficiency and regulatory impact

Provide technology support for efficient field regulatory activities

Ensure critical information is captured, stored and protected

Continue to develop and apply ESV’s data analytics capability Implement data analytics for targeting and assessment of the impact of regulatory activities

Continue safety campaigns to raise industry and community awareness of energy safety risks and how they should be managed

Continue issuing Lock Out Tag Out (LOTO) kits to all first year apprentices

Implement a ‘Be Sure’ awareness campaign to educate the public and the gas fitting industry on the mitigation of carbon monoxide hazards

Respond to the Independent Review of Victoria’s Electricity and Gas Network Safety Framework

Implement the 22 recommendations for ESV’s action

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ESV activities have been fully funded by the energy industry since its formation in 2005, by way of a combination of fee-for-service income, licence fees and Minister approved levies on the electricity, gas and pipeline industries.

Safety regulation costs are ultimately included in the prices paid by consumers of electricity and gas.

The Minister responsible for ESV reviews and determines levies for industry every two years. (See approved levies for 2019/20 - 2021/22 opposite). Regulated fees and charges will be reviewed and reset when they expire.

ESV’s strategic financial objectives are to:

• maintain key financial viability ratios by ensuring ESV can pay its debts when they are due, and

• maintain liquidity and cash viability to ensure that any short-term uncertainties caused by any of the following unforeseen circumstances are accounted for:

– delay in approval of levy determinations

– major incidents or natural disasters

– possible legal proceedings

– unanticipated retirements and unexpected changes in Certificates of Electrical Safety (COES) income reflecting market conditions.

Budget 2019/20

ESV has budgeted for an income of $42.52 million for 2019/20, comprising mainly of $24.95 million in levies and $17.29 million in fees. Total expenditure for 2019/20 is budgeted at $48.52 million, consisting of $2.42 million in capital expenditure and operating expenditure of $46.10 million.

The projected cash deficit of $3.24 million will be funded out of existing cash reserves as ESV does not foresee a requirement for debt financing in the short term.

ESV maintains its strategy on utilising cash reserves built up from previous years to invest in growth and capital expenditure. Therefore, the projected cash balance at the end of 2019/20 financial year will decrease to $5.47 million from the $8.71 million forecast in 30 June 2019.

Forward looking assumptions

Looking beyond 2019/20, ESV’s financial forecasts are based on the following assumptions:

• fully funded enterprise agreement that aligns with Government requirements

• COES income to decrease 4.60% and licensing income to decrease 3.40% due to a forecast downturn in the housing market

• rent increases of 3.80% per year as reflected in the lease agreement

• staff increase to reflect the expanding role of ESV as safety regulator and new growth as a technical regulator

• impact of new accounting standard AASB 16 for leases, resulting in ESV bringing its operating leases such as occupancy and car fleet onto the balance sheet.

Funding the strategies Financial strategy for 2019/20 - 2021/22

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Industry levies for 2019/20 - 2021/22

Levies on energy sector participants comprise more than half of ESV’s income, which is used to fund regulatory activities. Levies are currently set to recover $22 million in 2018/19.

Levies are set for a two year period with the approval of the Minister responsible for ESV, and levied each year. New levies must be set for the first two years covered in this Corporate Plan, 2019/20 and 2020/21, and are detailed in this section.

The strategic and regulatory challenges that ESV must meet are outlined in this Corporate Plan; in addition to maintaining the provision of statutory services, and compliance monitoring and enforcement activities, ESV must also respond to emerging safety issues and a dynamic strategic environment. This will require ESV to take on new regulatory roles and conduct additional education, compliance and enforcement activities. Approved levies to pay for this reflect an average annual increase over the next three years in cash of $4.80 million.

The increase in costs of $5.60 million associated with new initiatives include:

• additional inspection, compliance and audit activities costing $3.42 million (61%), including:

– two new asset management inspectors in electricity infrastructure regulation, targeted to ensuring effective power company asset management practices

– three new compliance officers in electrical installation regulation, with a focus on high energy installations and renewable equipment installation

– two new electrical engineers in electrical equipment regulation, to implement the joint Victorian/Queensland Electrical Equipment Safety System

– one new enforcement officer to support the implementation of ESVConnect for improved Certificate of Electrical Safety (COES) compliance

– four new technical and engineering officers in gas network and pipeline regulation, with a focus on contractor management and asset construction, operation and maintenance practices

– one new Type A gas engineer to backfill the team as it works more on providing technical and regulatory advice as well as to support work on hydrogen strategy.

• meeting new governance requirements for ESV, including Commissioners and new committees, costing $1.12 million – 20%

• investigation and implementation of new technologies and strategies to support regulatory actions, costing $0.45 million – 8%

• enhanced capacity and capability to engage and respond to stakeholders, costing $0.34 million – 6%

• education and marketing to ensure the safety of electrical apprentices costing $0.27 million – 5%.

61%20%

8%

6%5%

Inspection compliance and audit

61%

Meeting new governance

requirements for ESV

Enhance capacity /

capability for stakeholder engagement

Apprentice Safety

20%

New systems to support regulatory

actions

8%

6%

5%

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APPENDIX ONE: ESV Business Plan

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45

Electricity safety and technical regulation division

REGULATORY ASSURANCE

Electricity network risk

Electricity networks are composed of many different types of assets and equipment with different service lives (both individually and for particular classes of assets) and maintenance/replacement requirements. Networks may be geographically widespread and subject to a wide range of environmental conditions and physical threats that impact upon the integrity and sustainability of assets and equipment at a local level. Networks are typically configured to provide a degree of redundancy so that faults can be isolated, the effects of outages contained, and repairs easily made.

This complex risk environment is best managed through the Network Electricity Safety Management Schemes (ESMS) regime, which requires a network owner to develop and maintain a comprehensive and risk-based plan for managing the safe construction, operation, maintenance and repair of their network. An ESMS is accepted and monitored by ESV for a five-year term, until superseded by an acceptable replacement.

Network Electricity Safety Management Schemes (ESMS)

ESV ensures that the use of an ESMS effectively addresses electricity network risks by:

• setting and communicating regulatory policy and interpretive guidelines that establish the requirements for acceptance of an ESMS

• reviewing and validating each proposed ESMS to ensure that it provides a comprehensive safety proposition and a commitment to achieve specified safety outcomes

• planning and conducting a tailored regulatory surveillance program of systems audits, inspections and works practice observations, to provide assurance that the ESMS:

– is effective at managing risk to achieve acceptable levels of safety

– has been complied with network owner, and

– remains valid for managing network risks.

In 2019/20, ESV will conduct up to 12 Major Electricity Company (MEC) ESMS compliance audits, and increase the number of works practice observation audits from 18 to 31 audits.

Provision of electrical safety technical expertise to industry and the community

ESV’s activities include overseeing the development of, and making available, guidance material that establishes the foundation for good practice when working around electrical infrastructure and overhead electric lines.

ESV undertakes a number of work programs and activities to provide expert advice to industry and the community.

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Electrical safety technical guidance – overhead electric lines

ESV:

• facilitates the Electrical Safety Committee (the Blue Book Committee) and issues the Blue Book, which sets minimum safety standards for work on or near high voltage electrical installations and supplies

• confirms that industry develops detailed practices and guidance that comply with the Blue Book, including the production of the Green Book for distribution network operators and the Orange Book for traction industry networks

• provides guidance that interprets requirements in relation to prescribed no-go zones around overhead and underground electric lines, including for works and activities in the vicinity of electrical infrastructure, and clearances between structures and overhead electric lines

• issues guidance material to assist MECs to develop and submit acceptable ESMS.

Industry engagement – operators of electricity networks and significant electrical installations

ESV engages directly with the owners, operators and key stakeholders of electricity networks and significant electrical installations on safety issues, industry safety trends, and risk management requirements. ESV does this through a range of forums including:

• the MEC General Managers Forum

• the Distribution Businesses Consultative Forum

• the High Voltage Customer Committee (including data and analytics topics of interest)

• section 8 Committees, including the Powerline Bushfire Safety Committee (PBSC), Electrical Safety Committee (the Blue Book Committee), Victorian Railway and Tramway Electrical Safety Committee, and Emerging Technologies Advisory Committee

• statutory committees under the ESA, including the Electric Line Clearance Consultative Committee (ELCCC) and Victorian Electrolysis Committee (VEC).

4747

Electricity safety and technical regulation division

Bushfire risk

In accordance with contemporary best practice around the world, ESV monitors and regulates the bushfire risk of above ground powerlines across Victoria through:

• inspection, monitoring and maintenance regimes that prevent fire start due to asset failure

• vegetation management that maintains adequate electric line clearances in high bushfire risk areas, and

• engineering innovations and standards to make networks more resilient to threats, and better able to mitigate the fire ignition potential of asset and equipment failures.

Bushfire Mitigation Plans (BMP)

Network and other specified operators must gain ESV’s acceptance of a Bushfire Mitigation Plan, which is accepted and monitored by ESV for a five-year term. ESV assesses and accepts electricity network BMPs that address the key controls specific to bushfire risk mitigation, including:

• the operation of the network in hazardous bushfire risk areas, and during times of high bushfire risk, including responding to incidents and emergencies

• maintenance regimes to prescribed standards that prevent asset and equipment failures that could ignite a ground fire in hazardous bushfire risk areas

• the identification, monitoring and inspection of at-risk electric lines, supply networks and other network equipment at mandated intervals

• the delivery of mandated bushfire mitigation programs and ESV directions in relation to bushfire risk mitigation.

ESV also plans and conducts a targeted regulatory surveillance program to provide assurance that BMPs are complied with and remain effective for mitigating network bushfire risks. In 2019/20 ESV will increase its bushfire inspection activities from 2,000 spans per annum to 6,000 spans per annum, and conduct up to six systems audits of MEC BMP compliance.

Bushfire mitigation projects

Amendments to the 2013 Electricity Safety (Bushfire Mitigation) Regulations made in 2016 imposed additional bushfire risk mitigation requirements on MECs’ network asset management strategies and practices. ESV ensures that network operators comply with these additional requirements to:

• test and adopt the latest technology, including Rapid Earth Fault Current Limiters (REFCLs), to reduce the risk of fire starts due to phase-to-earth faults

• replace uninsulated overhead electric lines with underground cables or insulated alternatives in designated Electric Line Construction Areas (ELCAs), and

• implement programs to replace Automatic Circuit Reclosers (ACRs) with next-generation devices with lower fire start potential.

ESV oversees the progress of these projects in detail to ensure compliance with regulations, as part of its annual reporting obligations.

ESV also administers an expert advisory group known as the Powerline Bushfire Safety Committee (PBSC) under Section 8 of the Energy Safe Victoria Act, the membership of which provides independent technical expertise and advice to support ESV’s regulatory oversight of bushfire mitigation projects.

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Line clearance assurance

Network vegetation management surveillance

ESV conducts surveillance of nine Major Electricity Companies (MECs), 67 municipal councils, and 18 owner-operators of electric lines (that are not MECs), to ensure that vegetation is adequately managed and any potential impacts on network integrity are minimised.

This surveillance consists of a number of work programs, including:

• a review of Responsible Person’s Electric Line Clearance Management Plan (ELCMP), to ensure its compliance with legislation and ESV’s minimum expectations of a quality plan

• an Evaluation and Approval Program to confirm that regulated entities adopt a strategic, risk-based approach to electric line clearance through their ELCMP

• a systems Audit Program of regulated entities to ensure that relevant management and control systems listed in their ELCMP are working effectively to mitigate electricity safety risks, and to ensure the safety of the public and vegetation management workers, and

• an Inspection Program to visually test compliance with the prescribed Code of Practice that specifies clearance distances that must be maintained between vegetation and overhead electric lines. This includes conditions in both hazardous bushfire risk areas (HBRA) and low bushfire risk areas (LBRA).

Each of Victoria’s nine network operators (MECs) is required to prepare and submit an annual ELCMP to ESV. ESV evaluates, approves and monitors the application of each ELCMP to ensure that the MEC’s vegetation management controls are effective – particularly in relation to mitigating bushfire risks.

A total of 67 municipal councils and 18 owner-operators of electric lines are also required to prepare annual ELCMPs, although they are not required to submit these plans unless specifically requested to do so by ESV. ESV conducts targeted regulatory surveillance programs to ensure that the municipal operator has an effective and valid ELCMP and is complying with its requirements to effectively control vegetation management risks.

ESV’s work programs are developed in proportion to existing and emerging electrical risk caused by vegetation, and are designed to provide assurance that vegetation levels are maintained at safe levels in the areas in which they are conducted.

The surveillance programs include:

• Elevated Risk HBRA (Codified Areas) Program

• Hazardous Bushfire Risk Area (HBRA) Program

• Low Bushfire Risk Area (LBRA) Program

• Vegetation Management Education Program

Elevated Risk HBRA (Codified Areas) Program

This program inspects the compliance of MECs with the requirements of the Code of Practice for Electric Line Clearance (ELC), in areas where new technology will be implemented under amendments to the Electricity Safety (Bushfire Mitigation) Regulations. These areas are considered particularly prone to the threat of bushfire and are inspected prior to the onset of each fire danger period.

While ESV is guided by HBRA/LBRA determinations made by a relevant fire authority, ESV’s audit and inspection programs are targeted on the actual bushfire risk in each area.

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Hazardous Bushfire Risk Area (HBRA) Program

Prior to and during the fire danger period ESV:

• conducts system audits of each MEC for compliance with the Electricity Safety (Electric Line Clearance) Regulations and their approved ELCMP every two years

• annually reviews each MEC’s HBRA line clearance inspection programs and outcomes to ensure they are compliant with their ELCMP, and effectively mitigate bushfire risk

• completes visual inspections of HBRA to provide assurance that vegetation is being managed to acceptably safe standards and is compliant with the Code of Practice for Electric Line Clearance.

In 2019/20 ESV will review, evaluate and approve the ELCMPs of:

• nine MECs

• four municipal councils (with HBRA declared areas)

• three specified operator (with at risk electric lines), and

• two other Responsible Persons.

ESV will also conduct system audits of:

• five MECs, and

• four municipal councils (with HBRA declared areas).

Under the Electric Line Clearance Inspection Program, ESV will inspect and test the compliance of:

• five MECs, and

• 10 HBRA declared areas (municipal councils).

A target is set for the inspection of 16,000 spans per annum across all inspection programs.

Low Bushfire Risk Area (LBRA) Program

ESV completes visual inspections of LBRA areas to provide assurance that vegetation is being managed to acceptably safe standards and is compliant with the Code of Practice.

In 2019/20 ESV will review, evaluate and approve the LBRA ELCMP elements of eight municipal councils (with LBRA declared areas) Systems Audit Program.

ESV will also conduct system audits of six municipal councils (LBRA declared), and under the Electric Line Clearance Inspection Program, ESV will inspect and test the compliance of five MECs (LBRA) and ten municipal councils (LBRA declared).

A target is set for the inspection of 16,000 spans per annum across all inspection programs.

Vegetation Management Education Program

ESV conducts a range of activities to educate key Responsible Persons, stakeholders and the community on vegetation management requirements and their application. These programs aim to:

• promote greater understanding of the intention and value of compliance, and of the link between non-compliance and compromised safety outcomes

• encourage and mandate closer collaboration between municipal councils and electricity network operators

• encourage greater dialogue between vegetation management duty holders and community groups on the appropriate balance between line clearance in the interests of safety, and the amenity of vegetation in urban environments.

In 2019/20 ESV will attend:

• five Victorian based industry events to promote the ESV safety message and to inform its personnel of contemporary industry practice

• one national industry event to promote the ESV safety message and to inform its personnel of contemporary industry practice.

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Competent and experienced electrical workers play a critical role in ensuring that all installations and electrical work safety standards are complied with consistently, and that appropriate safety outcomes are achieved across all circumstances in which electricity is used. Competence and experience are measured through the licensing and registration requirements prescribed by the Electricity Safety Act (ESA).

Electrical installation safety

High energy installations, including high voltage facilities, pose additional risks to people and property. Installations and electrical work in high voltage and complex electrical installations in Victoria are required to be compliant with the requirements of regulations 301 and 302 of the Electrical Safety (Installations) Regulations. High voltage, complex and low voltage/high current installations operate with limited contact with regulators. ESV recognises that the electrical industry needs better guidance in regard to hazards associated with arc flash, safe work practices, and access authority systems (permit systems).

ESV manages or oversees programs that test, confirm and monitor the competency of electrical workers and the safe and compliant operations of electrical installations, including:

• Responding to electrical work defects

• Voluntary Electricity Safety Management Schemes

Responding to electrical work defects

There are increasing technical requirements and decreasing experience and technical skills in the licensed electrical work industry. More complaints, and increased defect rates detected through COES audits indicate an increased rate of electrical work non-compliant with safety requirements.

ESV will aim to ensure that electrical workers manage electrical hazards while working and that the installation they do work on is safe by:

• educating electricians through industry forums and training events on key safety matters, trends and electrical equipment issues, particularly not working live on low voltage installations

• targeting the marketing of safety issues to electrical apprentices (e.g. not working live) and their supervisors, and

• responding to complaints of defective or unsafe work to ensure rectification of safety issues and defects.

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Voluntary Electricity Safety Management Schemes

The ESA enables the owners and operators of complex electrical installations to achieve an acceptable level of safety compliance, while building on the efficiency of their operations, by committing to a voluntary, non-prescriptive Electricity Safety Management Scheme (ESMS).

ESV ensures that the use of an ESMS effectively addresses the risks of complex electrical installations by:

• setting and communicating regulatory policies and interpretive guidelines that establish the requirements for the acceptance of a voluntary ESMS by ESV,

• reviewing and validating each proposed ESMS to ensure it achieves the same safety outcomes as provided by compliance with prescriptive standards,

• monitoring and auditing compliance of 20 accepted Voluntary ESMSs, and

• investigating incidents arising in relation to complex electrical installations to determine if the alternative means of compliance specified in an accepted ESMS are effective and facilitate sufficient levels of safety.

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Under the Electricity Safety (Equipment Safety Scheme) Regulations 2019, all electrical equipment sold in Victoria must comply with tough new safety and certification standards designed to prevent dangerous or defective equipment from entering the market.

All importers, manufacturers of in-scope electrical equipment are required to register as ‘responsible suppliers’ on the national Electrical Equipment Safety Scheme (EESS) database before they offer electrical equipment for sale. Any equipment classified as medium or high risk must also be individually registered by ESV or an independent certification company, based upon independent test results that demonstrate compliance with appropriate technical standards.

ESV provides representatives to international and Australian technical standards committees responsible for maintaining key technical standards, which are incorporated in the Electricity Safety (Equipment Safety Scheme) Regulations.

As the key statutory body overseeing Victoria’s energy safety, ESV is responsible for ensuring that electrical equipment sold or supplied in Victoria complies with the rigorous safety standards prescribed in the Electricity Safety (Equipment Safety Scheme) Regulations. These standards apply to all importers, manufacturers of in-scope electrical equipment, including suppliers who provide this equipment through online channels.

ESV monitors suppliers’ compliance with electrical equipment safety standards, both prior to and following their supply to markets, through a variety of work programs that are listed in the following sections.

Registration of responsible suppliers

Victorian-based importers and manufacturers of in-scope household electrical equipment need to register as ‘responsible suppliers’ on the EESS national database, before they can supply this equipment to consumers.

Registration of Level 2 and 3 electrical equipment

Level 2 and 3 electrical equipment must be registered on the EESS database against a responsible supplier before it can be offered for supply. For Level 3 equipment, the registration is required to be made with a certificate of conformity, which can only be issued if the equipment is independently certified to comply with specific standards.

Certification of prescribed electrical equipment

ESV reviews applications for the supply of certain higher risk (prescribed) electrical equipment and, where it is determined that the equipment is compliant, issues certificates of approval for that equipment. ESV performs a technical review of documents supplied (including independent test results where applicable) to confirm that the equipment complies with all relevant safety standards. Turnaround time is approximately 10 days, with 750 certifications processed each year.

Electrical equipment compliance monitoring

ESV’s key activities for monitoring compliance with electrical equipment safety standards include:

• conducting electrical safety audits of 180 stores to ensure that prescribed equipment offered for sale has been approved

• conducting check testing of a class of in-scope electrical equipment available in markets, in conjunction with other technical regulators (coordinated by the EESS), and

• undertaking major compliance projects on significant safety issues identified through incident reports or investigations, or through the monitoring of safety trends.

These projects examine the systemic factors underlying a safety issue and identify appropriate regulatory interventions – including prosecution, recalls, prohibitions of sale and large-scale remediation actions to ensure the safety of the Victorian community.

They also respond to incidents reported by emergency services in relation to the failure of electrical equipment, including identifying if the relevant supplier has complied with their obligations.

Electrical equipment safety and efficiency

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Electrical Equipment Safety System (EESS)

The new EESS legislation provides a systematic approach that integrates ESV’s existing electrical equipment work programs into a national system. The EESS includes a database for the self-registration of responsible suppliers, a risk-based certification process that adjusts the level of regulatory certification requirements to the assessed risk of each class of equipment, and the registration of equipment on a public certification database – along with relevant certification documentation.

The EESS will provide ESV with the capability to:

• undertake more advanced data analytics on electrical equipment safety trends, to identify equipment safety issues and trends before they pose a significant risk in Victoria

• provide a stronger evidence base for amending prescribed and technical safety standards

• reduce red tape and tailor regulatory and certification requirements based on the proven safety performance of equipment types

• provide a public search function for consumers to check if the product they wish to purchase is certified and registered

• provide a simple system for labelling compliant products, with the old ‘approval numbers’ replaced with a single Regulatory Compliance Mark (RCM).

EESS legislation currently covers the jurisdictions of Queensland, Western Australia and Victoria. The scheme is also recognised by South Australia, Tasmania and New Zealand, where complementary legislation is in development.

ESV’s electrical safety mission is backstopped by a comprehensive range of investigation tools and processes, which examine serious safety incidents and associated safety matters. Through these investigations, a team of seasoned safety experts will examine the causes of incidents and levels of adherence to specific safety standards, in order to identify the basis and scope for corrective actions and interventions. ESV investigations also look at broader safety issues that may require regulatory intervention, or need to be brought to the attention of industry or the Victorian community.

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To become more risk focused, evidence based and targeted in its regulatory activities, ESV will continuously develop and provide reliable, accurate and objective analytical services across the organisation, in line with its strategic priorities.

With the foundations of this work underway, the focus will shift towards building a comprehensive and detailed safety profile for the entire State of Victoria. To make a real and measurable difference, ESV will progressively improve the ways in which tangible safety outcomes are measured and communicated. Enhanced data analytics capabilities will be applied to improve the efficiency, reliability and value of ESV’s service delivery.

Data and analytics

ESV will undertake relevant data analysis and disseminate regular reports to support its gas and electricity safety programs, including:

• an Annual Report that objectively represents the safety of the Victorian gas and electricity industry

• guidance material on good safety practices adopted by the gas and electricity industry and the wider community, and

• technical safety advisory communications for Victorian industry.

Regular reports will be produced to:

• communicate ESV’s performance and effectiveness of its work programs

• support ESV management decision-making with respect to regulatory activities and the exercising of its powers, and

• inform and educate ESV staff and its key stakeholders on the harms associated with particular gas risks and safety issues.

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Electrical Regulators Advisory Council (ERAC)

ERAC consists of representatives from Australian and New Zealand electrical safety regulators. Its primary objectives are to provide a forum for the national coordination of electricity safety issues, and respond to significant incidents and electricity safety trends. ERAC has a particular focus on:

• the national coordination of electricity safety requirements, licensing and electrical equipment certification

• efficient mobilisation of electrical workers between Australian and New Zealand jurisdictions

• the coordination of information sharing to support consistent safety outcomes, and

• monitoring and reviewing of electricity safety trends and issues.

ESV chairs ERAC. ESV’s participation in the council provides an avenue to contribute leadership and expertise to the inter-jurisdictional coordination of:

• electrical worker licensing and training standards

• the application of legislation and prescribed safety standards

• inputs to Australian and New Zealand technical standards, and

• responses to electricity safety issues and incidents.

Standards Australia International Electrotechnical Committee (IEC) Committee

ESV is a member of the Standards Australia IEC Committee, which analyses emerging trends in technology and system usage to ensure Australia has appropriate and adequate representation at the international level.

ESV also has a representative on the IEC Technical Committee for Appliance Safety and chairs a technical committee.

Victorian Skills Commissioner (VSC)

The VSC provides advice to the Minister for Training and Skills on how the training system can better support the economy and jobs by addressing skills shortages, meeting workforce training needs, and boosting productivity for employers.

ESV is a member of the VSC’s Electro Technology and Electrical Industry Advisory Group, and contributes to skills shortage assessments, curriculum content and funding applications.

Australian Industry and Skills Committee (AISC)

The AISC was established by the COAG Industry and Skills Council to give industry a formal, expanded role in policy direction and decision-making for the vocational education and training sector. The AISC undertakes reviews and development of national training packages through advice obtained from a network of Industry Reference Committees (IRCs). ESV plays a key role in this work through:

• representation on the IRCs and technical advisory committees for electro-technologies and electricity generation and transmission

• ensuring that national training packages meet industry, students’ and regulators’ needs for technical and safety content, and

• ensuring the Electrotechnology Training Package meets ERAC’s Essential Performance Criteria and covers new technologies.

Solar Victoria

ESV is a member of Solar Victoria’s enforcement committee, and ESV works closely with Solar Victoria to ensure the safety of solar and battery installations.

Distributed Energy Resources Register

The Council of Australian Governments Energy Council has requested that a register of small scale battery storage systems be established. The responsibility for establishing and maintaining the register falls to AEMO; ESV will work with DELWP and AEMO to provide information from the COES system to AEMO for verification of the information provided by distribution businesses to the register.

Licensing, standards and training division

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CERTIFICATES OF ELECTRICAL SAFETY

Monitoring compliance with prescribed safety standards for electrical work

Licensed electrical workers must provide a declaration that any work they have undertaken is safe and compliant with relevant prescribed safety standards. They do this by issuing a Certificate of Electrical Safety (COES) to their customer on each occasion that electrical work is completed.

ESV uses an external audit provider to test – on a sampling basis – that non-prescribed work is compliant and safe.

Independent inspection of prescribed electrical work

ESV manages the issuing of a special class of licences and endorsements to the independent providers of inspection services, who:

• conduct limited re-testing in accordance with the prescribed safety standards for testing electrical work

• conduct visual inspections of switchboards and electrical connections

• identify and ensure rectification of electrical work defects to ensure compliance, and

• certify compliance with standards for prescribed work.

Electrical worker licensing and registration

Competent and experienced electrical workers play a critical role in ensuring that installation and electrical work safety standards are complied with consistently, and that appropriate safety outcomes are achieved across different circumstances in which electricity is used.

Competence and experience are recognised through the licensing and registration requirements prescribed in the Electricity Safety Act (ESA).

ESV manages or oversees programs that test, confirm and monitor the competence of electrical workers, and ensure that electrical installations are safe and compliant with prescribed safety standards.

ESV’s management of the licensing of Victorian electrical workers includes:

• conducting Licensed Electrician’s Assessment (LEA) and Licensed Electrical Inspector (LEI) exams as a prerequisite for licensing, and to assess the knowledge and technical skills of prospective electrical workers

• undertaking enforcement action where electrical work is undertaken by an unlicensed or unregistered individual

• cancelling or suspending licences when an electrical worker is proven to lack sufficient competency, is negligent in undertaking electrical work, or is willfully non-compliant with prescribed safety standards

• administration of a licensed electrical worker registration database, which ensures that electrical contractors use only licensed workers and have nominated technical experts to ensure compliance with the ESA’s prescribed safety standards, and that electrical contractors have appropriate insurances.

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Gas and pipeline safety and technical regulation division

GAS AND PIPELINE INFRASTRUCTURE SAFETY

Pipeline development and construction

Gas transmission networks and other pipelines must be sited, planned, designed, constructed, tested and commissioned so that they will be resilient to integrity risks and encroachment. The Pipelines Act (PA) and the Gas Safety Act (GSA) prescribe conditions for the licensing, construction and asset lifecycle management, which require that:

• designs are in accordance with a national pipeline construction and commissioning standard

• ESV accepts a Construction Safety Management Plan (CSMP) before construction can commence

• a Consent to Operate (CTO) is approved by ESV before product is introduced and operations can commence, and

• an operating Safety Management Plan (SMP) is accepted by ESV before operations can commence (refer to Pipeline Safety Management Plans, below).

ESV may also be asked by the Victorian Government to provide technical safety advice during the planning and route selection for a new pipeline, or the modification of an existing pipeline.

Land planning around pipelines

With increasing urban growth and renewal in Victoria, land development encroachment on existing licensed pipelines remains a significant challenge within the planning system. This was highlighted in the March 2017 report of the Major

Hazard Facilities Advisory Committee, which recommended that this issue should be addressed through a review of planning mechanisms, to manage the risks of encroachment on existing energy infrastructure during ongoing land development.

The Government’s decision to adopt the committee’s recommendations was considered as part of its response to the Review of Victoria’s Electricity and Gas Network Safety Framework. ESV continues to work with the Department of Environment, Land, Water and Planning (DELWP), local councils, and the pipeline industry to improve the management of pipeline encroachment.

Pipeline construction safety management

ESV ensures that the construction and commissioning of gas transmission and other licensed pipelines effectively address construction and operating risks by:

• assessing and approving compliant CSMPs that establish:

– a suitable risk-based approach to ensure that pipelines are designed and constructed to address location and operation-specific integrity and encroachment risks

– that the pipeline meets prescribed integrity standards and functional parameters (including licence conditions such as operating pressure limits)

– site-specific emergency response and management arrangements during the construction phase.

• conducting compliance monitoring and on-site inspections to ensure that pipeline construction, alterations and repair work is undertaken in accordance with approved CSMPs and repair plans.

Pipeline Consent to Operate (CTO)

ESV assesses applications for, and provides, CTO prior to first operation of a new or modified pipeline. ESV assesses that the licensee demonstrates that the pipeline is safe to operate as intended, through reviews to:

• confirm that the test and commissioning results demonstrate compliance with the prescribed safety and integrity standards

• verify that the design and construction of the pipeline complies with the accepted CSMP. New pipeline owners/operators also need to provide an operating SMP for acceptance prior to commencing operations of the pipeline.

Building construction near pipelines

ESV assesses applications under Section 120 of the PA for land developments and building siting that may encroach on pipeline buffer zones, and makes recommendations to government with respect to approval. ESV’s work program:

• establishes requirements for these applications

• ensures consistency in submission requirements and the assessment process, and

• provides consent on behalf of the Minister.

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Gas network and pipeline operations risk

Gas networks and pipelines may be geographically widespread and subject to a range of environmental conditions and physical threats that impact on their integrity and sustainability at a local level. Pipelines are typically constructed to be resilient to integrity threats, and are protected by virtue of being underground in established areas where ground disturbance is minimal. However, the strictly controlled nature of gas pipelines and infrastructure requires that repairs are carried out whenever their integrity is compromised by an external threat, or when their service condition degrades to a point where leaks may occur.

This creates a complex risk environment best managed through the Gas Safety Case or Safety Management Plan regimes. These require a network owner or licensed pipeline operator to develop and maintain a comprehensive, risk-based plan for managing the safe construction, operation, maintenance and repair of their network or pipeline. A Gas Safety Case is accepted and monitored by ESV for a five-year term, while pipeline SMPs must be reviewed by the operator every five years, with the results notified to ESV.

Gas Safety Cases and Pipeline Safety Management Plans

ESV ensures that the use of Gas Safety Cases (GSCs) and Safety Management Plans (SMPs) effectively address fuel gas network and pipeline product risks by:

• setting and communicating regulatory policy and interpretive guidelines that establish the requirements for acceptance of a GSC or SMP

• reviewing and validating a proposed GSC and SMP to assess that they provide a comprehensive safety proposition and commitment to achieve specified safety outcomes that allow the SMP or GSC to be accepted; It is expected that ESV will receive a total of 14 GSCs and 4 SMPs for review in FY 2019

• planning and conducting a tailored regulatory surveillance program of system audits, to provide assurance that:

– the GSC or SMP is complied with by the operator

– the GSC or SMP is effective at managing risk to achieve acceptable levels of safety

– the GSC or SMP remains valid for managing network or pipeline construction and operation risks

– the GSC or SMP contains adequate arrangements for responding to emergencies, and

– pipeline licence conditions are met.

• assessing licensee reviews of SMPs every five years

• imposing conditions, or requiring amendments of a GSC or SMP, to ensure that they remain current and effective

• reviewing and validating pipeline integrity management plans and pipeline repair plans to ensure they make adequate provision for maintaining pipeline integrity and compliance with licence conditions when repairs are carried out

• undertaking field inspections and works practice observations of high-risk gas network construction and maintenance activities, to provide assurance of compliance repair plans, SMPs and CSMPs

• assessing cathodic protection reports for licensed pipelines to test and establish the maturity of pipeline asset integrity management approaches used in industry.

Performance monitoring program

ESV monitors the safety performance and compliance of gas network and pipeline operators through information provided directly to ESV by operators, including:

• information from reported incidents and near-miss events, which is used to identify where specific accepted safety systems are ineffective or deficient, and

• data against agreed KPIs, which provides insights into safety trends and industry safety issues and risks, are provided quarterly.

ESV also undertakes trend analyses and produces an annual safety management report, which objectively represents the health of the gas and pipeline industry including trends and issues.

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Industry engagement - operators of gas networks, licensed pipelines, and declared gas companies

ESV engages directly with gas companies and pipeline licensees on safety issues, specific industry risk trends, and ESV’s risk management requirements. ESV does this through a range of forums including periodic sector specific consultation forums with gas company and licensee representatives.

Voluntary Gas Safety Cases

Voluntary Gas Safety Cases (VGSCs) allow manufacturers of complex gas installations, operators of complex gas installations in manufacturing or industrial premises, or manufacturers of Type B appliances intended for use in manufacturing or industrial premises, to submit a safety case to apply to the respective manufacture or operation of a gas installation. In essence, they voluntarily take on the obligations of a gas company in return for convenience in situations where it may be more cost-efficient to deal with multiple exemptions across a large industrial installation, or similar exemptions for multiple Type B gas appliances at a single site.

ESV’s activities in managing VGSC programs include:

• providing guidance to complex gas installation operators seeking a voluntary safety case that complies with the Gas Safety (Gas Installation) Regulations

• assessing and accepting proposed voluntary safety cases to determine if an acceptable level of safety can be achieved through alternative forms of compliance, and

• conducting audit and inspection activities to provide assurance that each voluntary safety case is complied with, and remains current and effective. Acceptance audits will be conducted in 2019/20, and by 2020/21 these Safety Cases will be subject to annual compliance audits.

ELECTROLYSIS MITIGATION AND CATHODIC PROTECTION

The rapid expansion of Victoria’s rail infrastructure has produced an inevitable increase in the incidence of stray electrical currents, which can have a significant corrosive impact on underground pipelines and other nearby metal structures. This increasing challenge has forced the owners of such infrastructure to implement more costly measures to protect their assets from the effects of stray current corrosion.

ESV’s mandate with regard to the minimisation of stray current in new and existing railway projects includes:

• assessing the adequacy of electrolysis mitigation and other stray current minimisation measures proposed in rail system designs

• endorsing rail project gateway reviews in which the rail system design provides adequate stray current mitigation capabilities

• working with Metro Trains Melbourne on a pilot program to assess the impact on stray currents of increased energy recovery measures in the train network

• establishing a new Cathodic Protection System (CPS) audit program to identify operators that do not comply with their registration conditions to the detriment of neighbouring asset owners.

Victorian Electrolysis Committee (VEC)

In discharging its responsibility for electrolysis mitigation, ESV is advised by industry experts on the VEC in order to maintain and improve standards for managing the risks posed by stray electrical currents. The VEC provides advice to ESV on a variety of issues, including:

• the operation and suitability of proposed CPS

• risks arising from projects that may impact on stray current levels, and

• new methods or technologies that can help to mitigate stray current risk.

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Electrolysis Mitigation Assurance Program

ESV’s electrolysis mitigation work program ensures that mitigation systems are effective, and that their owners comply with regulations, through:

• conducting 22 area tests per annum to balance and monitor the electrolysis mitigation system associated with individual traction substations that protect underground structures

• conducting 870 TDU and 12,000 Drainage Bond inspections annually to monitor and ensure electrolysis mitigation systems are working as intended and are appropriately calibrated, and

• taking enforcement actions - informed by the technical advice provided by the VEC - with respect to audit, inspection and testing reports, as well as any claims of adverse effects of stray current.

Cathodic Protection (CP) Audit Program

ESV’s CP Audit Program ensures that CPS are effective and comply with the conditions of their registration, through the administration of CP registrations and operational conditions recommended by the VEC. ESV aims to conduct 240 audits per annum of CP systems operating at a current of 2 amperes or more.

GAS OPERATIONS

Complex gas installation safety

Victoria’s Gas Safety Act (GSA) provides two primary mechanisms for ensuring that complex gas installations are safe:

• a gas acceptance scheme

• compliance with safety standards prescribed through the GSA’s subordinate regulations.

Gasfitting work carried out on a complex gas installation must be offered for acceptance by ESV prior to commissioning. Furthermore, any complex gas installation that contains a Type B appliance must not operate until ESV has accepted the entire installation. All complex gas installations and gasfitting work must comply with safety standards prescribed in the GSA, as well as specific Gas Safety (Gas Installation) Regulations: AS 3814 for Type B appliances and AS/NZS 5601 Parts 1 and 2 for complex installations. ESV’s primary focus is to ensure that standards mitigate risk to an acceptable level, and to support improvements that make standards accessible, understandable and achievable for all.

Gasfitting work on complex installations must be undertaken by licensed gasfitters with appropriate competence and experience, as recognised by the licensing and registration requirements of the Victorian Plumbing Regulations administered by the VBA.

International and Australian technical standards committees

ESV provides representatives to a number of international and Australian technical standard committees that are responsible for maintaining the key technical standards adopted by the Gas Safety Regulations, including:

• AS 3814 for Type B appliances

• AS/NZS 5601 Parts 1 and 2 for complex gas installations.

ESV also develops Technical Guidance Bulletins for certification bodies on behalf of the Gas Technical Regulators Committee (GTRC) and Gas Information Sheets for industry stakeholders, where guidance is considered necessary to clarify components of the prescribed standards.

Complex gas installations and gasfitting work safety

ESV manages or oversees programs that undertake inspecting, testing and monitoring to ensure that complex gas installations comply with regulations and prescribed safety standards.

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Complex gas installation inspection program

Gas applications must be submitted to ESV prior to the commissioning of a complex or standard gas installation of a prescribed class. Complex gas installations must be accepted by ESV, following submission of a gas application by a gasfitter. ESV’s acceptance is also required for a complex gas installation involving a Type B appliance prior to the installation being used.

Upon receipt of the gas application, ESV assesses the risk profile of the proposed installation or works and set requirements that must be met prior to acceptance by ESV and operation of the installation. ESV may determine which technical safety standards should apply to an installation’s design, based upon the scope, configuration, and level of risk involved.

Depending on its risk profile, ESV may also inspect the installation at the completion of the proposed works. ESV’s acceptance scheme is utilised by gas companies to satisfy themselves, that the installation is safe to supply with gas.

Exemption program

The GSA requires any person carrying out gasfitting work to ensure that their work complies with prescribed standards. When compliance with a standard does not warrant the cost and a commensurate degree of safety can be attained by other means, the person can apply for an exemption to all or part of that standard.

TYPE A GAS APPLIANCES

Most of the more common gas appliances, such as gas heaters, water heaters, ovens and cooktops used in homes, are Type A appliances. Type B appliances are less common given their complexity and high rate of gas consumption, and are most often used in commercial and industrial installations.

Type A gas appliance safety is achieved by ensuring that appliances sold in the Victorian market are compliant with relevant Australian safety standards through the authorisation of acceptance schemes in Section 68 of the Gas Safety Act or acceptance by ESV under Section 69. ESV, or an independent certification body recognised by ESV, will certify appliances based upon independent laboratory test results that demonstrate compliance with the appropriate Australian technical standards.

ESV also contributes to the development of minimum standards for energy efficiency. The Commonwealth Department of the Environment and Energy is responsible for administering the Greenhouse and Emissions Minimum Standards (GEMS) Act, with ESV providing technical support and advice on appliance energy efficiency matters. ESV has a specific accountability for ensuring that gas water heaters operate efficiently through the processing of applications on behalf of the GEMS Regulator.

ESV’s work programs for monitoring compliance with Type A gas appliance safety standards occur both prior to and following supply to markets.

International and Australian technical standards committees

ESV provides representatives to a number of international and Australian technical standards committees that develop, maintain and promote key technical standards, codes and legislation for Type A gas appliances, including:

• AS/NZS 5263.0 Gas appliances: general requirements and AS/NZS 5263 part 1 - Appliance specific standards

• a host of Australian and international gas component standards.

ESV’s participation in these technical standards committees provides an avenue to contribute leadership in:

• developing and maintaining Australian and harmonised international standards for gas safety and efficiency

• ensuring the systematic application of legislation and prescribed safety standards, and

• coordinating responses to gas appliance safety issues and incidents.

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Additional gas appliance safety standards

When technical standards are inadequate, absent or lose currency, ESV may consult with affected stakeholders and relevant technical standards committees to facilitate the resolution of individual technical safety issues. This includes providing guidance to industry through publications such as the Technical Guidance Bulletins published for certification bodies on behalf of the GTRC. These Bulletins are considered for future revision or amendment of Australian gas safety standards.

Certification body assurance program

ESV focuses on ensuring compliance with minimum standards and consistency across all gas appliance and gas component certifying bodies, including:

• working with JAS-ANZ in our capacity as technical experts to conduct joint audits of all certification bodies, in order to test that Type A gas appliances and components are certified using a consistent process, in accordance with the Gas Technical Regulators of Australia Scheme Rules and the appropriate international standard for certification bodies (ISO 17065). These audits are typically conducted every 6 to 12 months, based upon the JAS-ANZ work schedule, and

• reviewing individual certification processes where an appliance or component has been involved in an incident, or where manufacturing or safety deficiencies have been identified, or ESV testing processes have established non-compliance with a technical standard.

Point of Sale (POS) audits

ESV undertakes limited inspections primarily based upon incident notifications of Type A gas appliance certification compliance at retail outlets, on a random sampling basis. The purpose of this program is to develop assurance of certification compliance in the ‘bricks and mortar’ retail environment.

Type A appliance acceptance program

ESV may accept Type A gas appliances upon application, based on independent test results and evidence of compliance with prescribed technical safety standards, and where it is impractical (due to low unit volumes, such as one-off imports) or too difficult (due to the complexity or technical aspects of the appliance) for a commercial certification body to provide certification.

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FINANCE AND BUSINESS SUPPORT

Governance and management

Administer Board and executive management meetings and processes on behalf of the Director of Energy Safety (DoES), including:

• administer Audit and Risk Committee (ARC) and sub-committee meetings and processes on behalf of the DoES

• administer Remuneration Committee meetings and processes on behalf of the DoES

• administer the internal audit program on behalf of the ARC and the DoES, and

• manage and continuously monitor reporting systems structured to provide transparency and accountability.

Financial Management Services

• oversee and facilitate financial management compliance with the Financial Management Act (FMA) and Australian Accounting Standards

• manage annual budget development processes and expenditure accounting

• monitor changes in the FMA and Australian Accounting Standards, and maintain corporate competencies, and

• work collaboratively across ESV’s divisions to manage budgets and forecasts, and identify emerging efficiencies.

Performance monitoring

• establish, review and continuously improve management performance reporting systems and compliance baselines

• enhance the transparency and accountability of ESV’s management practices

• support managerial decision-making and quality management processes, and

• identify efficiencies in business processes, and support the organisation through change management activities.

Support

• manage facilities, vehicle fleets and organisational arrangements to ensure compliance with public sector policy

• manage procurement processes to ensure probity and compliance with public sector policy, and

• develop a long-term property management strategy that supports ESV’s anticipated future facilities requirements and business goals.

Corporate services

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Program governance

• Manage significant ICT projects to ensure alignment with, and support delivery against, ESV’s strategic and regulatory objectives.

• Administer ICT systems and processes to identify, capture and communicate knowledge and information assets.

• Ensure the progress and prioritisation of key projects is transparent, measured and communicated.

Projects

Significant ICT projects to be continued from 2019/20 or tackled in 2020/21 that will modernise and digitise the following business and organisational capabilities:

• COES and Licensing by delivering ESVConnect

• management and regulation of Equipment Safety by delivering EESS System Development Project, and

• replacement of the Event/Case/Investigation Management System.

Information management systems

• Oversee and facilitate ESV’s compliance with records management and ICT requirements, including the Public Records Act, Privacy Act, the Victorian Protective Data Security Framework, and Australian standards for data security.

• Implement and maintain appropriate collaborative technologies to facilitate effective field and inter-office information management.

• Review and verify ESV’s compliance with the requirements of the Victorian Protective Data Security Framework.

• Upgrade and/or replace critical software and ICT systems, including:

– smartphone security management upgrades

– data backup systems upgrades

– record management systems replacement and modernisation, and

– Skype for business telephone and video conference system.

Support

Provide a sophisticated and comprehensive ICT support function to ensure accessibility to the right technology to enable ESV activities and work programs, including:

• maintaining all ICT technology and assets

• responding to and managing ICT failures and incidents

• providing records management support to facilitate effective records and document management practices

• maintenance of operational procedures and systems to ensure good practice in the business as usual systems including internal audit activities to provide assurance to the organisation.

Information services

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Enterprise Agreement (EA)

ESV’s EA will expire in 2019. In line with Government wages policy and enterprise bargaining framework, ESV has commenced discussions with relevant unions and employee representatives to reach a new agreement that supports ESV to perform the role of a modern regulator.

Diversity and inclusion

In addressing diversity and inclusion we will maintain focus on the organisation’s culture and the development of people management practices that make ESV employment accessible across genders, diverse cultural backgrounds, disability, age and other personal employment barriers.

ESV Leadership Program

Develop our Leadership Program to:

• Expand ESV’s leadership culture across Executive Management and the Extended Leadership Group

• Build leadership skills and capability to offer mentoring and professional development opportunities across the organisation

• Improve overall employee performance.

Unconscious bias training

Deliver unconscious bias tailored training to enable ESV people to develop their understanding of the negative effects of unconscious bias in service delivery and the workplace culture.

Health and Wellbeing Program

• Provide free health screening checks to employees to continue to ensure the physical and psychological health of ESV people

• Support and encourage physical sports and charity activities.

• Provide support options to assist employees to manage employment and personal stress, including administration of the EAP program and the appointment and training of Contact Officers..

People services

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Occupational Health and Safety (OHS) Program

Manage compliance with OHS legislation to make ESV workplaces safe for all employees by:

• managing and updating our OHS Framework

• administering our OHS Committee

• coordinating employee health and safety representatives

• facilitating OHS incident reporting and investigation

• coordinating the selection and training of first aiders.

Improve OHS management to have a greater focus on management control and accountability, and hazard management at operational levels, by:

• implementing risk-based OHS plans for operational (field) and technical functions, and organisational functions

• develop and implement task-specific work method statements and OHS risk registers

• conducting a Risk Based Training Needs Analysis to determine information, instruction and training needs.

Workforce Planning Framework

Conduct an annual workforce profiling exercise to ensure that work group skills and knowledge are fit for purpose by:

• establishing workforce capability gaps against a skills and knowledge baseline

• identifying recruitment priorities

• identifying major sources of risk and strategies for addressing them.

Learning and Development Program

Manage and enhance systems and programs that develop and maintain the capability of our work groups by:

• maintaining and building technical skills and knowledge to enable the delivery of regulatory, public entity and organisational functions

• developing staff understanding of the regulatory domain that governs ESV’s work

• maintaining employee knowledge of compliance requirements related to corruption, integrity, bullying and diversity, through cyclical compliance training.

Talent Acquisition Program

Manage and develop recruitment systems and processes to attract employees who will:

• be motivated by, and engaged in, delivering ESV’s objectives and functions

• have technical, professional and interpersonal skills and knowledge that closely align with ESV’s strategic directions

• benefit professionally through their employment at ESV.

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People services

Performance Management Program

Manage and develop a practical and comprehensive performance management program across all ESV’s divisions, including:

• online performance reviews and audits

• structured training programs for ESV leaders to ensure performance management plans are in place for all ESV staff

• support and advice to ESV leaders during the performance management cycle.

Investigate opportunities to utilise and invest in technology to increase efficiency and enhance stakeholder experiences in areas such as:

• recruitment process management

• business as usual personnel management

• leave availability and cover management

• implement and manage the Reward and Recognition Program, and

• performance development and management practices and processes continually reviewed and developed in line with best practice.

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Communications and marketing services

External Communications Program

Maintain a cohesive organisational narrative for communicating ESV’s roles and goals to external stakeholders, through:

• monthly reporting to government

• annual production and publishing of a Corporate Plan and Annual Report

• other communications on specific energy safety topics, including marketing campaigns, partnerships, media engagement and online communications

• lead engagement and coordination with government, other agencies and industry on critical energy safety events and issues

• build ESV’s credibility and influence to provide actionable advice to the Victorian community on electricity and gas safety issues, and

• formalise ESV’s organisational narrative and refine the channels and means to communicate this to external stakeholders.

Internal Communications Program

• Ensure that accessible, accurate and high-quality information on emerging issues is shared across ESV’s divisions to enable all employees to optimise their work.

• Reinterpret how ESV should communicate internally, to improve our efficiency, coordination and collaboration.

• Run activities to improve employee competencies to communicate with each other on work programs/activities and specific projects.

Significant Programs

• Safety campaigns: the carbon monoxide awareness campaign ‘Be Sure’ will be a broad-based statewide campaign aimed at empowering Victorians to take action and mitigate the dangers of carbon monoxide poisoning from open flued heaters. The cross-government campaign will launch in June.

• Social responsibility: ESV $50,000 in sponsorship for two Clown Doctors to treat burns patients at the Royal Children’s Hospital, Melbourne twice a week for 50 weeks of the year. Clown Doctors use humour to distract young patients in the burns clinic from the pain of their treatment.

• Community engagement: ESV provides a $25,000 grant program to football/netball clubs across Victoria encouraging energy safety in club canteens. Clubs can apply for a $1000 grant to replace old or unsafe equipment. Clubs that receive a grant are obliged to display ESV consumer safety messages on branded signage, counter mats and menu boards.

Evaluation

• ESV engages an external consultant to conduct reach and recall surveys that benchmark our campaigns against key performance indicators.

• Further discrete research projects are also carried out to determine the impact of other engagement projects.

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Risk, regulatory planning and policy

Collaboration with other public entities

ESV coordinates and directly collaborates, with federal and state regulatory authorities and other statutory bodies that share our safety regulation interests. These include:

• the development and maintenance of Memorandums of Understanding that establish a basis for communication, collaboration and information sharing

• regular coordination forums for developing coordinated responses to specific safety issues or incidents, and

• direct coordination on specific safety matters and emerging trends.

Administer key government and ESV regulatory governance practices

Risk, Regulatory Planning and Policy (RRPP) administers ESV regulatory governance processes that include:

• Compliance and Enforcement Panel meetings and processes

• Electricity and Gas Network Evaluation Panel meetings and processes, and

• administer ESV’s integrity framework such as ensuring conflicts of interest, potential fraud and corruption, and gifts and benefits properly addressed by the organisation.

Ensure regulatory decisions are supported by formal processes and evidence and manage ESV regulatory policy, including the development, implementation and maintenance of regulatory policy that:

• lead and facilitate the remaking the electricity safety regulations and legislative instruments in collaboration with other areas of ESV, DELWP and affected stakeholders

• establishes the frameworks for administering energy safety duties and regulatory requirements

• defines jurisdictional boundaries and the intended scope of energy safety legislation, and

• establishes the basis for good regulatory practice, and supports the development of organisational regulatory competency.

Lead and coordinate ESV’s risk management practices and processes to continue a strong risk basis for ESV regulatory compliance and enforcement functions.

• ESV compliant with Government policy (Standing directions).

• Lead engagement and coordination with central government and other agencies on the management of inter-public entity risks and cross-jurisdictional issues.

• Maintain the currency and relevance of established ESV risk management systems, practices, risk registers and documents, including compliance with Department of Treasury and Finance and insurer requirements.

Administer Risk Management Committee meetings and processes. Conduct periodic enterprise risk reviews and maintain risk management system elements to reflect ESV’s current risk management approach.

Implement government and ESV priorities

ESV will facilitate the implementation and reporting of the following priorities:

• Licensing of line workers

• Independent Review in collaboration with all areas of ESV and DELWP

• skills maintenance and continued professional development of licensed electricians.

Provide legal advice

• Provide legal advice and/or research, or obtain specialist external legal support where required.

• Review correspondence or legal documents, including contracts.

• Provide advice on compliance and enforcement options and decisions – including recalls, prohibitions, improvement notices, and directions.

• Provide advice on compliance with government policies and legislation.

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Provide organisational legal services to ESV

ESV’s legal support function provides, or obtains external, specialist legal advice to support ESV with:

• organisational legal advice, correspondence/document reviews, including contracts

• compliance and enforcement options and decisions (including recalls, prohibitions, improvement notices, directions)

• compliance with Government policies and legislation, legal research

• legal management and support services.

The legal support function directly supports ESV’s functions and legal obligations through providing management services that provide:

• coordination of the ESV infringement notice system

• management of the efficient and accurate representation of ESV interests in all relevant court and tribunal processes

• facilitated public access to FOI information by managing the appropriate and efficient release to third parties of relevant information collected through ESV regulatory functions/activities.

Manage the process of complaints received from the public in relation to energy safety

ESV manages the complaints system/processes to provide the community with safety assurance and obtain safety intelligence for ESV and responds to approximately 60 complaints per month.

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APPENDIX TWO: Financial strategy, statements and position 2019/20 - 2021/22


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Strategic business and financial overview

The basis on which ESV funds its operations is through fully recovering capital and operational costs from the industry. Costs are recovered from industry through a range of fees and charges on individuals and industry levies on companies operating in the pipelines, gas and electricity industries. Safety regulation costs are ultimately included in the prices paid by consumers of electricity and gas.

The Minister reviews and determines levies for industry every two years.

Regulated fees and charges will be reviewed and reset when they expire.

Strategic business and financial overview

The strategic financial objectives for ESV are:

• to maintain key financial viability ratios:

– Current ratio is >=1.0

– Assets to Liabilities ratio is >=1.0

• to maintain liquidity and cash viability to ensure that any short-term uncertainties caused by any of the following circumstances are accounted for:

– delay in approval of levy determinations

– major incidents or natural disasters

– possible legal proceedings, and

– unanticipated retirements and the vagaries of COES income reflecting market conditions.

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7777

The 2019/20 budget and forecast position at 30 June 2019

Cash forecast 2018/19

The forecast cash balance for 2018/19 establishes the opening position for ESV’s business plan for the new financial year. The cash position is made up of cash income less cash operating and capital expenditure.

Compared to a budgeted net cash outflow of $1.57 million, ESV’s forecast total cash position for 2018/19 is expected to result in a net outflow of $0.08 million, an improvement of $1.49 million. This is made up of a forecast increase in cash inflow of $0.31 million, plus a decrease in cash outflow of $1.18 million. The decrease in cash outflow includes a decrease in payments to employees and compliance audits.

Income forecast 2018/19

The overall increase in forecast revenue of $1.28 million (an increase of 3.2 per cent on the budget) is mainly due to an increase in sale of safety certificates of $0.98 million and in appliance efficiency fee income of $0.22 million.

Expenditure forecast 2018/19

The aggregate expenditure (capital and operating) forecast for 2018/19 is $41.67 million against the budget of $43.10 million for 2018/19.

Operating expenditure 2018/19

Forecasted decrease in operating expenditure of $1.13 million, (a decrease of 2.85 per cent on the original budget) is a result of a reduction in:

• salaries – $1.02 million

• compliance audit – $0.70 million

• motor vehicle – $0.16 million

• general administration – $0.16 million

This is partially offset by increased expenditure in:

• consultants and contractors – $0.61 million

• professional fees – $0.22 million

• depreciation and amortisation – $0.5 million

The 2018/19 budget was based on staffing assumptions of maintaining 156 full time equivalents (FTE), whilst actual numbers for staffing have been maintained across the year at 149 FTE leading to a forecast decrease of $1.01 million in salaries by the end of the 2018/19 financial year. The forecast decrease is mainly attributable to unfilled vacancies during the year.

Reduction in compliance audit cost of $0.70 million is due to reduced audit sample size while still compliant with regulatory requirements.

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Capital expenditure 2018/19

ESV continues to invest in its systems architecture, mainly ESVConnect, and enhancing our data analytics capabilities. The forecast capital expenditure is $2.71 million by 30 June 2019.

The ESVConnect program of work, bringing the convenience and ease of online applications to benefit the industry, continues in 2019/20. Following the release of the Licensing of Electrical Workers (LEW), Registration of Electrical Contractors (REC) and Certificates of Electrical Safety (COES) workflows, there will be ongoing support and maintenance. Further development of ESVConnect will be shaped by the overall needs, priorities and strategy of ESV.

Asset management strategy

ESV maintains an asset management strategy that is reviewed on an annual basis to ensure its validity and alignment with ESV’s organisational strategy.

ESV main assets are:

• leased motor vehicle fleet

• office leases at Southbank and Glen Waverley

• furniture, fittings and office equipment

• intangible assets mainly ESVConnect and software applications.

ESV’s vehicle fleet is leased through a fleet management company. ESV’s strategy is to ensure the vehicles continually enable the organisation to perform its role as a regulator effectively.

ESV’s Business Services team ensures that our offices provide the necessary tools and equipment for our staff to operate optimally. Leases are reviewed periodically to ensure alignment with future size and requirements of the workforce.

ESV is committed to investing in its technology and analytics capabilities. With the growth of ESV’s regulatory activities, ESV will continue to invest in the development and maintenance of its system capabilities to effectively and efficiently enable it to discharge its regulatory responsibilities.

Financing 2019/20 - 2021/22

ESV is not anticipating the need to borrow funds at this time.

7979

2019/20 budget

Cash budget 2019/20

The total budgeted cash deficit for the 2019/20 year is estimated based on the projected cash closing position for 2018/19 plus cash inflow less cash outflow (operating and capital expenditure).

ESV’s overall net cash budget for the 2019/20 financial year is a net cash outflow of $3.24 million. This reflects ESV’s continuing strategy of utilising cash reserves built up from historical efficiencies to invest in our systems and to grow our boots on the ground presence.

Income budget 2019/20

The income budget for 2019/20 is $42.52 million and is made up of the following (the percentage proportion of overall income is shown in brackets):

• levy income of $24.95 million (58.7 per cent); an overall increase of $2.93 million on 2018-19 budget of $22.02 million.

• fee income of $17.29 million (40.7 per cent); an overall increase of $0.26 million on 2018-19 budget of $17.03 million.

• other income of $0.29 million (0.7 per cent); a decrease of $0.17 million on 2018-19 budget of $0.46 million.

Levy income is based on cost recovery principles informed by aggregate resourcing levels determined in this plan and approved by the Minister. ESV commenced a new levy order period from 1 July 2019 increasing rates by 14.3% for electricity and 11.6% for gas and pipeline per annum.

Certificate of electrical safety and registration and licensing fees are aligned to economic metrics such as building approvals. All fees are tied to the Monetary Units Act 2004. ESV will align with the value of a monetary fee unit from 1 July 2019 resulting in a 1.6 per cent increase in 2019/20.

Expenditure budget 2019/20

Total expenditure for 2019/20 is budgeted at $48.52 million. This consists of capital expenditure of $2.42 million and operating expenditure of $46.10 million.

Operating expenditure 2019/20

Operating expenditure of $46.10 million is an increase of $4.14 million compared to the 2018/19 Corporate Plan.

Salaries are expected to increase by $3.06 million reflecting the expanding role of ESV as both safety regulator and new growth as a technical regulator. As per the enterprise agreement commitment, salaries also include a 3.0 per cent increase.

Capital expenditure 2019/20

ESV’s capital budget will be $2.42 million in the 2019/20 financial year, decrease from a $2.71 million projected spend in 2018/19. This capital investment is being undertaken to ensure ESV meets its increased organisational requirements and its enhanced regulatory role. This will be directed toward ESVConnect enhancement, data analytics and improved systems for compliance, enforcement and investigations.

Financing 2019/20

ESV is budgeting for a cash deficit of $3.24 million in 2019/20. This will be funded out of existing cash reserves as ESV does not foresee a requirement for debt financing in the short term.

ESV maintains its strategy on utilising cash reserves built up from historical efficiencies to invest in growth and capital expenditure.

As a result the projected cash balance at the end of 2019/20 financial year will decrease to $5.47 million from the $8.71 million forecast in 30 June 2019.

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Assumptions for the 2019/20 budget

• Increasing the number of frontline staff numbers to reflect the expanding role of ESV as both safety regulator and new growth as a technical regulator and staff with expertise to deliver.

• The salaries include an increase of 3.0 per cent in line with the enterprise agreement outcome.

• Major non-discretionary costs being employee costs, occupancy, depreciation, motor vehicle and computer leases are reflective of costs per contractual terms. Other costs are prepared in nominal terms, hence are declining in real terms.

• The budget also included increased expenditure of $0.83 million relating to meeting new governance requirements. ESV will be reconstituted as a multi-member commission from 2019/20.

Assumptions for 2019/20 through to 2021-2024

Looking beyond 2019/20, ESV’s financial forecasts are based on the following assumptions:

• fully funded enterprise agreement that aligns with Government expectations

• COES income to decrease 4.6 per cent due to a forecast downturn in the housing market

• licensing income to decrease 3.4 per cent due to a forecast downturn in the housing market

• rent increases of 3.8 per cent per year as reflected in the lease agreement.

• increasing the number of frontline staff numbers to reflect the expanding role of ESV as both safety regulator and new growth as a technical regulator and staff with expertise to deliver. The salaries include an increase in line with the enterprise agreement outcome

• the impact of the new accounting standard AASB 16 for leases. This new accounting standard resulted in ESV bringing its operating leases such as occupancy leases and car fleet leases onto the balance sheet.

Planned efficiency program

• Efficiencies will continue to be driven by monitoring expenses (especially discretionary procurement) and ensuring resources are allocated and shared optimally across functions.

• Continuing processing and administrative efficiencies through the implementation of additional applications in ESVConnect.

• The ongoing development of IT based management systems, such as data analytics and intelligence to support more efficient business processes and allocation of resource.

Levy determination

The activities of ESV have been fully funded by industry since its formation in 2005.

Funding is by way of a combination of fee-for-service income, licence fees and Minister approved levies imposed on the electricity, pipeline and gas industries.

Industry levies are set according to the following principles:

• reflecting direct costs to administer and regulate the relevant industry sector by ESV

• administrative simplicity and transparency

• efficiently allocated to ensure each end-consumer bears an appropriate share of the costs of safety regulation

• stable and predictable levy price path to avoid price shocks

• non-distorting to market entry and exit.

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2019/20 budget

Background and the 2019/20 budget position

Industry levies will account for approximately 58.7 per cent (or $24.95 million) of ESV’s total revenue requirements in 2019/20. This is consistent with previous years’ levies. The projected increase between 2018/19 and 2019/20 is $2.93 million.

The proposed levies at this time account for known increases in regulatory responsibilities.

The levies for 2019/20 maintain aggregate resourcing levels determined by Government following the 2009 Victorian Bushfires Royal Commission. Additionally, the expanding role of ESV as both safety regulator and new growth as a technical regulator will require ESV to further increase resourcing levels for the 2019/20 period to ensure safety outcomes for all Victorians are maintained and improved upon. ESV has consulted and communicated with the affected companies and industry sectors about the proposed levy increases.

ESV, in accordance with this Corporate Plan, seeks approval by Ministerial Determination of the proposed levy for a two-year period covering 1 July 2019 to 30 June 2021. ESV is seeking Ministerial approval for the levy determinations by 30 June 2019, which will allow invoicing to be undertaken in a timely manner and will maintain ESV’s cash flow for the coming year.

ESV has been able to maintain the projected levy increases advised in previous Corporate Plans for the last five years.

Industry/sector position

The expanding role of ESV as both safety regulator and new growth as a technical regulator has required amendment to the previous forecast levy increases to enable ESV to achieve full cost recovery and to continue delivering safety outcomes for Victoria.

Electricity industry

ESV will increase levies for the new determination period by $1.32 million (14.3 per cent) for 2019/20 and $1.24 million (11.7 per cent) for 2020/21. The increased levies if fully passed through to customers will increase electricity accounts by an estimated 44¢ per household per annum.

Gas industry

ESV will increase levies in aggregate for the new determination period by $1.6 million (12.6 per cent) for 2019/20 and $1.51 million (10.5 per cent) for 2020/21.

The gas industry consists of four sectors. The increased levies if fully passed through to customers will increase gas accounts by an estimated 56 cents per household per annum.

ESV has previously aligned its levy orders with the AER and Electricity Distribution Pricing Review (EDPR) and Gas Access Arrangements Review (GAAR) determinations over their respective five-year windows. ESV has developed its levy models to remain consistent with previous plans to ensure that ESV retains a sustainable cash position and is able to raise a stable levy on industry. The changes for this levy determination period were not known or envisaged when the last Corporate Plan or financial models were developed.

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Financial management and accounting compliance

ESV’s prudent organisational governance ensures compliance with all statutory and public sector requirements for sound financial performance through:

• accounting policies that follow Australian Accounting Standards to ensure compliance with the Financial Management Act 1994 requirements to recognise revenue and expenditure on an accrual basis, and to recognise vehicle lease and facilities rental obligations

• an Enterprise Risk Management System complying with Victorian Managed Insurance Authority requirements for organisational risk control

• the provision of annual attestations as required by the Victorian Department of Treasury and Finance.

Significant expenditure is in accordance with ESV policies so that:

• workforce capability supports ESV’s statutory objectives, and other deliverables agreed with the Victorian Minister for Energy, Environment and Climate Change

• new employees are recruited on the basis of merit and diversity

• appropriate probity and rigour is applied to the procurement of goods and services from ethical suppliers

• ESV decisions that involve significant expenditure are informed by independent and expert advice from third parties.

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Financial statements and position Income statement

FY19 Feb Forecast FY20 Budget FY21 FY22 FY23 FY24

Income ($‘000)

Sale of safety certificates 11,396 10,417 9,942 10,181 10,436 10,660

Electrical licensing fees 3,874 3,742 3,615 3,672 3,727 3,776

Electrolysis 1,919 1,918 1,918 1,918 1,918 1,918

Cathodic protection systems 65 96 96 96 96 96

Electrical appliance testing fees 353 425 425 425 425 425

Appliance efficiency fees 650 693 693 693 693 693

Fee Income 18,257 17,291 16,689 16,985 17,295 17,568

Electricity industry levy 9,201 10,519 11,753 12,874 13,282 13,701

Gas industry levy 11,847 13,341 14,736 16,004 16,464 16,939

Pipelines levy 928 1,086 1,200 1,303 1,340 1,379

Levy Income 21,976 24,945 27,689 30,181 31,086 32,019

Other income 190 108 108 108 108 108

Advertising space - magazine 81 6 6 6 6 6

Interest 282 174 120 78 81 88

Other Income 553 288 234 192 195 202

Total income 40,786 42,524 44,612 47,357 48,577 49,788

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Financial statements and position Expenses statement


Expenses ($‘000)

Employee 23,012 27,805 29,265 30,143 31,048 31,979

Compliance audit 3,022 3,089 2,899 2,899 2,899 2,899

Marketing 2,061 2,457 2,457 2,457 2,457 2,457

Motor vehicle 1,450 850 865 865 865 865

Consultants and contractors 2,626 2,130 1,302 1,302 1,302 1,302

Occupancy 1,154 201 21 56 74 74

Information services 1,554 1,420 1,420 1,420 1,420 1,420

Insurance 452 453 453 453 453 453

Training and workshops 490 679 679 679 679 679

Travel 350 439 439 439 439 439

Professional fees 954 861 861 861 861 861

Memberships and subscriptions 609 671 671 671 671 671

General administration 662 995 995 995 995 995

Interest expense - Lease 0 458 404 339 268 191

Total expenses 38,397 42,506 42,731 43,578 44,429 45,284

Profit/(loss) before non-cash items 2,389 18 1,881 3,779 4,148 4,504

Non-cash expenditure

Depreciation and amortisation 569 3,590 3,894 3,587 3,390 3,453

Net profit/(loss) 1,820 -3,572 -2,013 192 758 1,052

8585

Financial statements and position Balance sheet


Current asset ($‘000)

Cash 8,709 5,468 3,114 2,903 2,925 3,147

Receivables 810 563 335 331 332 333

Prepaid expenses 895 821 821 821 821 821

Non-current asset

Plant and equipment 847 11,373 9,460 7,395 5,397 3,397

Intangible assets 6,068 7,025 7,148 7,730 8,443 9,094

Total assets 17,329 25,250 20,878 19,180 17,917 16,792

Current liabilities

Prepaid income 0 156 -156 -78 0 78

Payables 2,343 2,377 2,190 2,190 2,190 2,190

Provisions - current 121 153 157 162 167 172

Other current liabilities 110 1,984 1,646 1,932 1,876 2,021

Non-current liabilities

Provisions - non-current 3,615 3,723 3,835 3,950 4,069 4,191

Other non-current liabilities 442 9,731 8,092 5,718 3,551 1,024

Total liabilities 6,630 18,123 15,764 13,874 11,853 9,675

Net assets 10,699 7,127 5,114 5,306 6,065 7,116

Current year profit/(loss) 1,820 -3,572 -2,013 192 758 1,052

Accumulated funds 5,093 6,913 3,341 1,328 1,521 2,279

Asset revaluation surplus/ (deficit) 176 176 176 176 176 176

Contributions by owners 3,610 3,610 3,610 3,610 3,610 3,610

Equity 10,699 7,127 5,114 5,306 6,065 7,116

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Financial statements and position Statement of cashflows

Income Statement FY19 Feb Forecast FY20 Budget FY21 FY22 FY23 FY24

Statement Of Cashflows ($‘000)

Sale of safety certificates 11,537 10,675 10,159 10,181 10,436 10,660

Electrical licensing fees 3,874 3,742 3,615 3,672 3,727 3,776

Fee Income 3,128 3,382 3,393 3,393 3,393 3,393

Levy Income 21,927 24,945 27,689 30,181 31,086 32,019

Other Income 2,154 1,879 1,757 1,698 1,704 1,718

Total cash inflows 42,619 44,623 46,613 49,124 50,347 51,566

Payments to employees -23,428 -27,508 -29,461 -29,946 -30,846 -31,774

Payments to suppliers -16,566 -17,690 -17,192 -17,075 -17,164 -17,256

Total cash outflows -39,994 -45,198 -46,653 -47,020 -48,011 -49,030

Net cash flows from/(used in) operating activities

2,625 -575 -40 2,104 2,336 2,536

Capital expenditure -2,706 -2,666 -2,314 -2,314 -2,314 -2,314

Net cash flows from/(used in) investing activities

-2,706 -2,666 -2,314 -2,314 -2,314 -2,314

Net increase/(decrease) in cash and cash equivalents

-81 -3,241 -2,354 -210 22 222

cash and cash equivalents at the beginning of the period

8,790 8,709 5,468 3,114 2,903 2,925

cash and cash equivalents at the end of period

8,709 5,468 3,114 2,903 2,925 3,147

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Approved fees and levies for 2019/2022

The Monetary Units Act 2004 permits fees to be expressed in regulations in ‘fee units’. Fee units are indexed on 1 July each year, which ensure they can be updated without the need for continual updates to regulations.

The table below sets out the value of fee units prior to, and from 1 July 2019.

Description Prior to 1 July 2019 From 1 July 2019 Change

Monetary fee unit $14.45 $14.81 2.49%

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FeesElectricity

Fees payable under the Electricity Safety Act 1998 remained the same number of fee units during 2018/19, which means the amounts payable under this formula will only increase by 2.49%.

The table sets out the fees payable under the Electricity Safety (Registration and Licensing) Regulations 2010.

Type Fee 2019/20

Electrical contractor application (43.3 fee units) $641.27

Electrical contractor renewal (20.8 fee units) $308.05

Licence application – Electrical worker (27.8 fee units) $411.72

Licence application – Electrical inspector and restricted electrical worker (43.3 fee units) $641.27

Licence application – Supervised worker licence (issued up to 3 years) (27.8 fee units) $411.72

Licence renewal – Electrical worker (13.9 fee units) $205.86

Licence renewal – Electrical contractor (20.8 fee units) $308.05

Licence renewal – Electrical inspector and restricted electrical worker (20.8 fee units) $308.05

Licence application – Switchgear worker (27.8 fee units) $411.72

Licence renewal – Switchgear worker (13.9 fee units) $205.86

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The table below sets out the fees payable under the Electricity Safety (Installations) Regulations 2009.

The table below sets out the fees payable under the Electricity Safety (Equipment) Regulations 2019.

TypeFee

(in fee units)Fee

2019/20

Application for a new certificate of compliance 60 $888.60

Application for renewal of certificate of compliance 17 $251.77

Application for modification of certificate of compliance – change of name or model 17 $251.77

Application for modification of certificate of compliance – other than a change of name or model

40 $592.40

Application for new certificate of approval for electrical devices or luminaires 34 $503.54

Application for new certificate of approval for electrical appliances (other than an electrical luminaire)

51 $755.31

Application for renewal of certificate or approval 17 $251.77

Application for modification of certificate of approval for electrical devices or luminaires 23 $340.63

Application for modification of certificate of approval for electrical appliances (other than an electrical luminaire)

34 $503.54

Application for modification of certificate of approval – change of name model 17 $251.77

Application for transfer of certificate of compliance or approval 17 $251.77

Type Fee 2019/20

Electronic Certificate of Electrical Safety form for prescribed electrical work (2.2 fee units) $32.58

Paper Certificate of Electrical Safety form for prescribed electrical work (2.4 fee units) $35.54

Periodic Certificate of Electrical Safety for relating to non-prescribed electrical work (55.6 fee units) $823.44

Any other electronic Certificate of Electrical Safety 6.75*

Any other paper Certificate of Electrical Safety 7.40*

Application for exemption under Installation Safety Regulation 401 (5.99 fee units)# $88.71

* Prescribed fees which are less than the value of one fee unit are not tied to the indexing formula set out under the Monetary Units Act 2004 but may still be increased on 1 July each year up to the value of the indexation formula.

# Exemptions are charged based on current fee units that apply for the financial year

FeesElectricity

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The table below sets out the fees payable under the Electricity Safety (Cathodic Protection) Regulations 2009.

Type Fee 2019/20

Registration fee for a Cathodic Protection System with a total output up to and including 250 milliamperes (8.77 fee units) $129.88

Registration fee for a cathodic protection system with a total output over 250 milliamperes and up to and including 2 amperes (21.95 fee units) $325.08

Registration fee for a cathodic protection system with a total output over 2 amperes (49.57 fee units) $734.13

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FeesGas

The fees for application for Safety Cases made under sections 52, 53 and 54 of the Gas Safety Act 1997, are set out in the Gas Safety (Safety Case) Regulations 2018 are:

Two fees payable under the Gas Safety (Gas Installation) Regulations 2018 relate to the acceptance of appliances and applications for exemptions for prescribed standards. These are:

TypeFee

(in fee units)Fee

2019/20

Voluntary Safety Case (ss52, 53, 54 Gas Safety Act 1997)

1,007 per annum $14,913.67

TypeFee

(in fee units)Fee

2019/20

Acceptance of appliance (s69 Gas Safety Act 1997) 51 $755.31

Application for exemption from standards (s72(3) Gas Safety Act 1997) 8 $118.92

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LeviesElectricity

Determinations made by the Minister for Energy and Resources under section 8 of the Electricity Safety Act 1998 require electricity distribution companies to pay specified amounts to ESV to cover the reasonable cost and expenses of ESV in fulfilling its regulatory functions. These are based on the number of customers in each electricity distribution area. The levies are:

Company Levy 2019/20

Jemena $1,218,075.35

CitiPower Pty $1,230,965.36

Powercor Australia $2,997,680.55

SPI Electricity Pty Ltd/AusNet Services $2,661,015.01

United Energy Distribution Pty Ltd/Alinta $2,410,775.26

Total $10,518,511.53

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LeviesGas - Natural Gas companies

Determinations made by the Minister for Energy, Environment and Climate Change under section 11 of the Gas Safety Act 1997 require gas companies to pay specified amounts to ESV to cover the reasonable costs and expenses of ESV in fulfilling its regulatory functions. The levies for natural gas companies are:

Company Type Companies Levy 2019/20

Natural gas companies

Fixed fee $10,118.61

Natural gas pipeline companies

Natural gas distribution pipeline owned in Victoria

$43.68 per kilometre


Natural gas distribution pipeline domestic customers in Victoria

Multinet Gas Distribution Partnership Australian Gas Networks Ltd AusNet Gas Services Pty Ltd Enwave Victorian Networks Pty Ltd

$5.44 per customer


Natural gas transmission pipeline owned in Victoria

Jemena Gas Pipelines Holdings Pty Ltd (EGP and Vic Hub) Tasmanian Pipeline Pty Ltd (TPG) LYB Australia Ltd (Loy Yang B) Gas Pipelines Victoria Pty Ltd APA VTS Australia (Operations) Pty Ltd Beach Energy Resources (licence is in the name of Lattice Energy Ltd) APA ORBOST Gas Plant Pty Ltd (Orbost pipeline) South East Australia Pty Ltd APT Pipelines (SA) Pty Ltd (SESA Pipeline) Multinet Gas Distribution Partnership


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Determinations made by the Minister for Energy, Environment and Climate Change under section 11 of the Gas Safety Act 1997 require other gas companies including those supplying LP Gas, to pay specified amounts to ESV. The levies for these companies are:

LeviesGas - Other Gas entities


In the case of a LP or Landfill company with direct or indirect customers of unreticulated LP Gas

2 to 1,000 Clean Energy Fuels Australia Pty Ltd $3,151.90

1,001 to 5,000 $6,282.34

5,001 to 10,000 $15,736.54

10,001 to 20,000 Origin LPG $31,453.41

20,001 to 50,000 Supagas $62,885.43

Over 50,000 Elgas $157,203.40

In the case of a LP or Landfill Gas company that operates a reticulated LP Gas system or systems

Service fee Energy Developments Pty Ltd $5,977.16

Other Declared Gas Companies (reticulated LPG)*

Service fee $5,977.16AusNet Services (Mt Baw Baw)Indigo Shire Council (Buller Gas)Mt Hotham Alpine Resort Management BoardWesternport Water & Gas

$3,151.90

1,001 to 5,000 Elgas (Victorian LP Gas Reticulation Systems) $6,282.34

5,001 to 10,000 $15,736.54

10,001 to 20,000 $31,453.41

20,001 to 50,000 $62,885.43

Over 50,000 $157,203.40

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LeviesNon-gas pipelines

Determinations made by the Minister for Energy and Resources under section 132A of the Pipelines Act 2005 requiring licensed pipeline companies to pay specified amounts to ESV. The levies payable by non-gas pipeline companies are:


Licensed pipeline companies

Fixed fee $10,118.61

Licensed pipeline companies

Licensed pipeline owned in Victoria

Air Liquide Australia LtdASSC Property Custodian Pty LtdBHP Billiton Petroleum Pty LtdBOC LtdBP Australia Pty LtdCooper Energy LtdElgas Reticulation Pty LtdEsso Australia Pty LtdIncitec Pivot LtdIxom Operations Pty LtdMobil Oil Australia Pty LtdMobil Refining Australia Pty LtdOrica Australia Pty LtdOrigin Energy Resources Ltd Qenos Pty LtdViva Energy Australia Pty LtdUnited Terminals Pty Ltd


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APPENDIX THREE: Legislation and regulations administered by ESV

Regulatory Strategy | 2019/20 - 2021/22

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Statutory objectives

Energy Safe Victoria is an independent statutory body responsible for the safe generation, supply and use of electricity, gas and pipelines in Victoria. Established under the Energy Safe Victoria Act 2005, ESV oversees the regulatory safety frameworks that prevent death, injury, damage or loss due to electrical, fuel gas and pipeline product safety hazards.

ESV’s safety and regulatory mandates cover the supply, conveyance and use of electricity and fuel gases within Victoria, in accordance with the Electricity Safety Act (ESA) and the Gas Safety Act (GSA). ESV also administers the regulatory safety framework for licensed pipelines, in accordance with the Pipelines Act (PA). The specific legislation and regulations under our administration are listed at the end of this appendix.

The ESA, GSA and PA include certain statutory objectives that ESV must fulfil, which are intended to prevent serious electrical, gas and pipeline safety incidents. These objectives include ensuring that:

• energy installations are safely operated, and energy infrastructure and pipelines are safe during their construction and operation

• gas and electrical work is undertaken only by individuals and businesses recognised as competent, and in accordance with prescribed safety standards

• electrical currents do not cause loss or damage to existing structures

• electrical equipment and gas appliances supplied or purchased in Victoria are safe to operate, and

• the community and industry are aware of electricity and fuel gas safety requirements.

ESV achieves these statutory objectives by ensuring that:

• regulated entities and individuals involved in the conveyance and supply of electricity or fuel gases, or the operation of a licensed pipeline, operate effective systems and processes that manage and minimise electrical, gas and pipeline product safety risks as far as practicable

• only individuals recognised as competent (predominantly by being licensed) undertake electrical installations and gasfitting work, and they do so in accordance with prescribed safety standards

• gas and electrical equipment and appliances comply with relevant safety standards when offered for sale, and

• the community is made aware of how to eliminate hazards and manage risks when using electricity or fuel gases, including the use and maintenance of gas appliances and electrical equipment, to ensure ongoing safety.

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ESV functions

ESV’s regulatory and organisational functions are defined by the Energy Safe Victoria Act, the Electricity Safety Act, the Gas Safety Act and the Pipelines Act, as well as various Victorian Government requirements and corporate governance and professional practice guidelines. These functions establish the operational framework within which our work programs and activities are developed, implemented and conducted.

As an independent regulatory public entity, ESV must strive to maintain recognition as an authority on energy and pipeline safety, while competently balancing the need for effective regulatory action against the efficient deployment of capability.

As a public sector authority, ESV must comply with government sector business practices and statutory requirements to demonstrate appropriate probity and accountability within defined organisational functions.

The Electricity Safety Act and the Gas Safety Act describe common regulatory roles for electricity and fuel gas safety, along with additional functions for risks specific to each type of energy product. The Pipelines Act also assigns roles to ESV that relate to safety requirements for licensed pipelines. These roles and requirements are presented in the following table.

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ESV functionsRoles and requirements

Requirement Function (ESA) Function (GSA) Function (PA)

Specify prescribed safety standards to be met by the responsible person.

Determine minimum safety standards for electrical equipment, electrical installations and electrical work (section 7).

Issue guidelines specifying minimum safety standards for gas appliances, equipment, components, installations, gas related services, and the conveyance, sale, supply, measurement, control and use of gas (section 10).

Department of Environment, Land, Water and Planning (DELWP) accountability.

Specify prescribed safety standards to be met by the responsible person.

Inspect and test electrical equipment, installations and work for compliance with specified safety standards (section 7).Regulate, monitor, educate and enforce compliance with the registration and licensing of electrical workers (sections 31-41), and electrical work undertaken according to prescribed safety standards.Supply a Certificate of Electrical Safety (COES) and receive completed certificates (section 45b).Administer prescribed minimum standards for energy efficiency of electrical equipment, and inspect and test electrical equipment for compliance with specified minimum efficiency standards1 (section 7B is no longer administered by ESV).

Monitor compliance of gas appliances, equipment, components, installations, gas related services, and the conveyance, sale, supply, measurement, control and use of gas with the specified safety standards (section 10).

Not applicable.

Ensure prescribed safety standards are complied with by the responsible person.

Encourage and monitor the use of Electricity Safety Management Schemes (ESMSs - section 7).Assess or determine ESMSs (sections 102, 105). Ensure compliance with ESMSs (section 106).Regulate, monitor and enforce the prevention and mitigation of bushfires that arise out of incidents involving electric lines or electrical installations (section 7).Support and enforce additional bushfire mitigation duties relating to polyphase electric lines in Part 10A of the ESA.Regulate, monitor and enforce the mitigation of stray current risks (sections 91-93).Regulate the safety of electrical equipment available in consumer markets (sections 54-68A).

Issue guidelines in relation to preparing safety cases (section 10).Monitor gas companies’ compliance with accepted safety cases (section 10).Audit accepted safety cases to determine their adequacy and effectiveness (section 10).

Ensure construction does not impede electrical apparatus or other pipelines (section 103 – delegated).Provide consent to operate a pipeline (section 108 – delegated).Regulate the use and siting of pipeline (sections 113-115, 120(1) – delegated).Review and accept Safety Management Plans (section 127).Request further information to enable a determination, impose conditions, require amendments of plans or receive reviews of plans after five years (sections 128 - 132).

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Requirement Function (ESA) Function (GSA) Function (PA)

Systematically identify where prescribed safety standards have been ineffective or have failed.

Investigate incidents with implications for electricity safety (section 7), or where claims are made for adverse effects due to stray currents.

Investigate incidents with implications for gas safety (section 10).

Investigate safety incidents.

Advise industry and the community on electricity, fuel gas and pipeline product technical safety matters and requirements.

Advise and consult on electricity safety and electrical equipment, electrical installations and electrical work (section 7).Advise the electricity industry and the community on electricity safety (section 7).

Advise and consult on gas safety (section 10). Advise and consult on gas safety with industry and the community (section 10).

DELWP accountability.

Monitor and enforce compliance with legislative obligations and prescribed safety standards.

Monitor and enforce compliance with the ESA and subordinate regulations (section 7).

Monitor and enforce compliance with the GSA and subordinate regulations (section 10).

Enforce safety requirements (sections 155, 157-158 – delegated).

Undertake additional leadership and administrative responsibilities that contribute to energy safety.

Other functions conferred by or under the ESA or subordinate regulations include:• the Director of Energy Safety issuing directions to make an

electricity emergency situation safe.

Other functions include:• exemptions from installation regulations

and requirements for gasfitting workers

• issue directions to any person by the Director of Energy Safety to make a gas emergency situation safe.

Other functions conferred by or under the PA or subordinate regulations. For example, the Minister may delegate any of their functions under the PA to the Director or any employee of ESV (section 184)

1 Federal legislation for the efficiency of electrical equipment means ESV no longer directly administers legislation in this area. But ESV does contract its energy efficiency expertise to the Federal Government so that it can approve efficiency applications, and by undertaking energy efficiency audits of electrical equipment and buildings on the Government’s behalf.

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Administered legislation and regulations Energy Safe Victoria administers, and enforces compliance with, the following Acts and regulations.

Acts

• Energy Safe Victoria Act 2005 – establishes ESV

• Electricity Safety Act 1998 – provides for the safety of electricity supply and use, and the efficiency of electrical equipment

• Gas Safety Act 1997 – provides for the safety of gas supply and use, and the efficiency of gas equipment

• Pipelines Act 2005 – provides for the safety of pipelines and minimises their adverse environmental impacts.

Regulations

Safety of electricity supply:

• Electricity Safety (Electric Line Clearance) Regulations 2015 prescribe the Code of Practice for Electric Line Clearance, which sets out the practices to be adopted and observed in tree pruning near electric lines

• Electricity Safety (Bushfire Mitigation Duties) Regulations 2017 prescribe specific mitigation duties that electricity suppliers must undertake

• Electricity Safety (Bushfire Mitigation) Regulations 2013 prescribe the methods and standards for electricity suppliers’ bushfire mitigation plans

• Electricity Safety (Management) Regulations 2009 provide the requirements, procedures and other matters relating to the acceptance of electricity safety management schemes

• Electricity Safety (Installations) Regulations 2009 set out:

– duties of the public in relation to the protection of low voltage electrical installations operating on public land, high voltage electrical installations, and the supply networks of Major Electricity Companies

– electricity suppliers’ obligations in relation to the electrical installations that they supply.

Protection against corrosion of underground and underwater structures:

• Electricity Safety (Cathodic Protection) Regulations 2009 provide:

– standards for the design, installation and operation of Cathodic Protection Systems

– means of registering cathodic protection systems

– mitigation systems for the purposes of the Electricity Safety Act.

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Safety of electrical installations and electrical workers:

• Electricity Safety (Registration and Licensing) Regulations 2010 provide for:

– the registration of electrical contractors

– the licensing of electrical workers (including electricians and inspectors).

• Electricity Safety (Installations) Regulations 2009 set out:

– safety standards and requirements for electrical installation work

– duties of the owners and operators of complex electrical installations, high voltage electrical installations, and small gauge railway systems

– requirements for the testing and certification of electrical installation work.

• Electricity Safety (Management) Regulations 2009 provide the requirements, procedures and other matters relating to the acceptance of electricity safety management schemes.

Safety of electrical equipment:

• Electricity Safety (Equipment Safety Scheme) Regulations 2019 provide minimum safety standards for electrical equipment and the approval of prescribed electrical equipment.

Safety of gas supply:

• Gas Safety (Safety Case) Regulations 2018 provide safety cases in relation to gas facilities, installations and appliances, and for the reporting of gas incidents, and include the minimum safety standards for gas quality.

Safety of gas installations:

• Gas Safety (Gas Installation) Regulations 2018 provide:

– standards for gasfitting work and requirements for gas quality for LPG suppliers (not gas companies)

– procedures relating to the acceptance of gas appliances and installations

– the safety of gasfitting work, gas installations and appliances.

Pipelines:

• Pipelines Regulations 2017 provide standards for safety of the design, construction, operation and maintenance of pipelines.

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This report has been endorsed by the Director of Energy Safety in Victoria.

Authorised and published by the Victorian Government Melbourne October 2019

© Copyright State of Victoria 2019

You are free to re-use this work under a Creative Commons Attribution 4.0 licence, provided you credit the State of Victoria (Energy Safe Victoria) as author, indicate if changes were made and comply with the other licence terms. The licence does not apply to any images, photographs or branding, including Government logos.

ISBN: 978-1-925838-12-1 (Print) ISBN: 978-1-925838-38-1 (Online)

This document is also available online atwww.esv.vic.gov.au

http://www.esv.vic.gov.au

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