TRADE WASTE RISK RANKING PRICING

2

WHY HAS FIXED FEE PRICING CHANGED?

TREATMENT PLANTS

ASSETS

ENVIRONMENT WATER REUSE

OH&S

Cost Better Reflects Trade Waste Risk To 5 Key Objectives of

Integrated Sewage Quality Management System (ISQMS)

WHY HAS FIXED FEE PRICING CHANGED?

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Consistency/Equity across 3 water retailers

• CWW implemented around 10 years ago

• SEW implemented 1st July 2013-2014

Polluter pays model Greater the risk to YVW and metro sewage system, the greater the fee

Financial incentive to better manage trade waste • More non-compliances can increase the fixed trade waste fees

• Maintaining compliance can lower or maintain fixed trade waste fees

CHANGES IN TW FEE DETERMINATION 2013-2014

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On the 1st July 2013 determination of some trade waste prices have changed

• Contract Fees

• Application Fees

Max. Volume

Risk Ranking

• Volumetric Charge

• Quality Charge (BOD, SS, iTDS, TKN)

No Determination Change

Fixed

Variable

TRADE WASTE PRICE INCREASES 2013-2014

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• Trade waste increase 7.6% compared to average Water & Sewer increase of 24.7%

• Overall Trade Waste Charge increases lowest since 2007 bar the price freeze

• CPI increase for the following 4 years

0

2

4

6

8

10

12

14

16

18

20

08/09 09/10 10/11 11/12 12/13 13/14

%increase

%increase

Price Freeze

HOW HAS FIXED FEE PRICING CHANGED?

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Application Fees (New and Renewal Agreements/Consent) • Prices set to be cost neutral overall to YVW customer base

• ESC ratified new fees June 2013 (incorporates 7.6% trade waste price increases)

Daily Consented Max Volume

Charge 2012/13

≤0.5kl/d $0.00

>0.5kl/d & ≤4kl/d $59.27

>4kl/d & ≤20kl/d $144.94

>20kl/d & ≤50kl/d $335.56

>50kl/d & ≤100kl/d $369.73

>100kl/d & ≤1000kl/d $1456.11

>1000kl/d $2912.86

Risk Rank Charge 2013/14

5 $57.89

4 $113.83

3 $667.29

2 $1193.30

1 $3687.04

HOW HAS FIXED FEE PRICING CHANGED?

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Contract Fees (Agreement/Consent operational management)

• Prices set to be cost neutral overall to YVW customer base

• ESC ratified new fees June 2013 (incorporates 7.6% trade waste price increases)

Annual Discharge Annual Charge 2012/13

<2500kl/yr $529.46

2500.1-25000kl/yr $1589.81

25000.1-100000kl/yr $5301.42

>100000kl/yr $15905.41

Risk Rank

(Dynamic)

Annual Charge

2013/14

5 $569.84

4 $1711.07

3 $5705.79

2 $15170.37

1 $17118.61

WHO IS AFFECTED BY FIXED FEE PRICING CHANGE?

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• Out of 6489 customers as at May 2013, only 2.5% will incur a significant increase

4.8% customers

Paying Less

2.5% customers

Paying More

92.7% Customers

No Significant

Change

RISK RANKING DETERMINATION

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RISK RANK RISK DESCRIPTOR SITE VISIT FREQUENCY YVW CUSTOMERS 30 JUNE 2013

1 Extreme 1 month 10

2 High 2 months 12

3 Moderate 3 months 47

4 Low 6 months 236

5 Insignificant 12 months (selected customers only)

6193

• Devised in 1991 with formation of Melbourne Water from MMBW

• System adopted by YVW, SEW and CWW in 1995, in use to this day

• Until now system used internally for setting compliance site visit frequency

• All current and new YVW customers are assigned a risk ranking

RISK RANKING ALGORITHM

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Risk Rank derived from the sum score of 6 risk factors

L + H + V + A + S + C = RR score Where;

L is Location (treatment plant specific score)

H is History (compliance history)

V is Volume (specific score for volume range)

A is Activity (specific score for an activity conducted on-site)

S is Substance (for hazardous substances from activity)

C is Class (a score for a safety factor for higher risk discharge)

LOCATION COMPONENT

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Scoring based on treatment plant vulnerability to trade waste discharge

TP with higher class water reuse and/or smaller catchment has higher score

TREATMENT PLANT

WATER REUSE SCORE

WTP Large System Capacity 0

ETP Large System Capacity 0

Healesville Low system Capacity 10

Monbulk Low System Capacity 10

Upper Yarra Low system Capacity 10

Craigieburn Class B 15

Lilydale Class B 20

Whittlesea Class B 20

Wallan Class C 20

Aurora Class A 25

Brushy Creek Class A 25

HISTORY COMPONENT

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History is determined by the following formula

H = (NC/S) x 100 Where;

NC = Number of non-compliant samples in last 3 years to date

S = Number of samples taken in last 3 years to date

Default Scenarios:

New Customers = Score of 10

Customers with less than 4 samples = Score of 10

VOLUME COMPONENT

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Scoring based on a discharge volume range of consented maximum volume

Higher the volume the greater the consequence of a non-compliant discharge

VOLUME RANGE

SCORE

0 - <5kl/day 1

5 - <25kl/day 10

25 - <50kl/day 20

50 - <75kl/day 30

75 - <100kl/day 40

100 - < 500kl/day 50

500 - <1000kl/day

75

1000 - <2000kl/day

100

≥2000kl/day 150

ACTIVITY COMPONENT

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ACTIVITY SCORE DESCRIPTOR

Animal Care 1 Caring of animals in the form of meal preparation, grooming, medical attention

Food Manufacture 5 The manufacture of food products

Embalming 5 Preservation of bodies, body parts, organs and animals

Groundwater 10 Discharge of uncontaminated groundwater to sewer

Pulp & Paper Manufacture 25 Processing of wood and recycled paper to produce pulp and paper products

Commercial & Hospital laundering

25 Washing / Cleaning of linen from Hospitals, Restaurants, Nappy Services etc

Chemical manufacture 50 The reaction of two or more chemicals to produce a product or an intermediate which is used in other processes to manufacture end products, ie vinyl chloride monomers, resins, emulsions, etc

Liquid Waste Disposal 75 The treatment of schedule 4 wastewater

• 244 Activities describing onsite processes, each is given a score for deemed risk

• Higher risk activities incur a higher activity score

• Sites with multiple activities, highest score activity used

SUBSTANCE COMPONENT

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Substance is hard coded to the activity score to account for contaminants that pose an

additional risk to the sewage system

The higher risk the activity, the higher the substance score

For multiple substance scores, the highest substance score is used

ACTIVITY SCORE

SUBSTANCE SCORE

75 50

50 50

25 10

10 10

5 0

1 0

CLASS COMPONENT

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Class is hard coded to the activity score as an extra safety factor for classes of hazardous

substances such as petrochemicals, heavy metals, volatile organic chemicals

Sites with multiple classes, highest class score is used

ACTIVITY CLASS SCORE

Animal Care 0

Food Manufacture 0

Fuel Dispensing Area 10

Laboratory 15

Metal Pickling 20

Tip Leachate 25

Chemical manufacture 50

Liquid Waste Disposal 50

RISK RANK SCORE

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RISK RANK SCORE RANGE

1 ≥150

2 120-149

3 90-119

4 50-89

5 <50

L + H + V + A + S + C = RR score

• The Risk Rank score is dynamically determined on a daily basis

EXAMPLES

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Example 1

Commercial laundry discharging a maximum 95kl/day to Eastern treatment plant, has had 2

non compliances in 3 years taken from 25 samples

L=0 H=8 V=40 A=25 S=10 C=0 Total=83 RR=4

Contract Fee = $1711.07 Application Fee = $113.83

Example 2

Metal finisher has ‘electroplating – dip’ as activity has started business discharging a maximum

27kl/day to Brushy Creek treatment plant, as it is a new business it has no sample history

L=25 H=10 V=20 A=25 S=10 C=25 Total=115 RR=3

Contract Fee = $5705.79 Application Fee = $667.29

WHAT CAN CUSTOMERS DO TO MAINTAIN OR REDUCE CURRENT RISK RANKING?

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By maintaining compliance over a rolling 3 year period

Ensure volume is correct and maintain compliance to limit

Check activities on site are correct or if they have changed since last agreement

THANK YOU

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• Questions?