Corporate and Customer Services Contracts

Background


Icon Water has two contracts with ActewAGL in relation to corporate and customer services, named the Corporate Services Agreement (CSA) and Customer Services and Community Support Agreement (CSCSA).

This page provides an explanation of the corporate and customer services contracts so our customers and community can understand this part of our business. This page excludes some details of the contracts which remain confidential between the parties, for legal and commercial reasons.

This page also provides:

  • An overview of the history of provision of water, electricity and gas services in the ACT.
  • The evolution of contractual arrangements for the provision of corporate and customer services provided to the water, electricity and gas businesses.
  • Information regarding the range of bodies which currently provide independent oversight and which support transparency and accountability of Icon Water’s business operations.

Long history of arrangements


The current services contracts between Icon Water and ActewAGL are the most recent in a long history of arrangements for sharing the delivery of services in the context of utility services. This recognises the natural synergies that exist between the utilities.

The provision of water and electricity services in the ACT have been linked since 1988 when the ACT Electricity and Water Authority (ACTEWA) was established. The reasons given for the creation of this authority included recognition of the value of shared corporate, customer and other services in the delivery of the various utility services. In 2000, gas services also combined with water and electricity when the ActewAGL joint venture was formed. 

TimelineThis table outlines the changes to the owners and providers of water, electricity and gas services.

Time period

Bodies responsible for utility services

Explanation of changes to structural arrangements

Corporate and customer services

1962–1988


Water
– Commonwealth public service.

Electricity – ACT Electricity Authority (ACTEA).Commonwealth statutory authority under the Australian Capital Territory Electricity Supply Act 1962 (Cth).

Gas – Australian Gas Light Company (AGL).

Not applicable.

Assumed to be separate for each.

1988–1995


Water and electricity
– ACT Electricity and Water Authority (ACTEWA). Statutory authority under the Electricity and Water Ordinance 1988 (Cth) (Commonwealth body until self–government in 1989 and then an ACT body).

Gas – AGL.

Consolidation of electricity retail and distribution and the provision of water and sewerage services within the one entity, using the existing infrastructure of ACTEA.

Shared between water and electricity.

Separate for gas.

1995–2000

Water and electricity – ACTEW Corporation Limited.Territory-owned corporation under the Territory-owned Corporations Act 1990 (ACT) (TOC Act).

Gas – AGL.


Corporatisation of the body responsible for delivery of electricity and water services.

This was part of the ACT’s commitment to the National Competition Policy to provide a strategic framework for the efficient and sustainable reform of the Australian water industry.

Shared between water and electricity.

Separate for gas.

2000–2012


Water
– ACTEW Corporation Limited (owner of assets) and ActewAGL (provider of operations and maintenance services and corporate and customer services).

Electricity and gas – ActewAGL.

Joint venture between two partnerships, ActewAGL Distribution and ActewAGL Retail. Initially, ACTEW Corporation Limited and AGL were each equal partners in both partnerships.


Creation of a multi-utility service provider to ensure ACTEW would be able to compete in an increasingly competitive electricity market and to improve price and service quality for ACT electricity and water consumers.

To establish commercially viable corporate structures and to ensure that both organisations benefitted from the synergies created from being a multi utility provider of water, electricity and gas services.

Shared between water, electricity and gas.

2012-today

Water – ACTEW Corporation Limited (now named Icon Water Limited).

Electricity and gas – ActewAGL.


Re-integration of the operations and maintenance of the water and sewerage assets back into Icon Water. To ensure both ownership and operations aligned with the Territory-Owned Corporation Act objectives of efficient operations, maximising sustainable returns, social responsibility and ecologically sustainable development.

Shared between water, electricity and gas.

 
 
 
 
 
 
 
 


History of corporate services provision since 2000


Since the formation of the ActewAGL joint venture in 2000, there has been a series of agreements relating to the provision of corporate and customer services between the parties. The key agreements are outlined below.

History of corporate services provision since 2000

Water and Sewerage Managing Contractor Alliance Agreement

The Managing Contractor Alliance Agreement (MCAA) was established between ActewAGL and ACTEW Corporation Limited (now named Icon Water Limited) in 2000. It sets out the alliance principles by which Icon Water engaged ActewAGL to manage and operate Icon Water’s water business, including the operation and maintenance of Icon Water’s water and sewerage networks. The MCAA was entered into with the specific intention to be replaced with a longer-term, performance based outsourcing agreement once the costs and risks of the water and sewerage operations by the joint venture had been established.

Utilities Management Agreement

The Utilities Management Agreement (UMA) was the contract established between ActewAGL and Icon Water in 2004, to replace the MCAA. The UMA provided for ActewAGL to operate and maintain the water and sewerage networks owned by Icon Water. This also included the provision by ActewAGL to Icon Water of certain corporate and customer services.

The term of the UMA was aligned to the regulatory period during which price directions are set by Icon Water’s economic regulator (the Independent Competition and Regulatory Commission (ICRC)). The UMA had an expiry date of 30 June 2023. This agreement remained in place until the water and sewerage operations were internalised back into Icon Water in 2012.

Corporate Services Agreement

The Corporate Services Agreement (CSA) was entered into between ActewAGL and Icon Water in 2012 when responsibility for the operation and maintenance of the water and sewerage networks was internalised back into Icon Water. The CSA sets out the arrangements for the provision of corporate services to Icon Water.  The CSA allowed for the continuation of the services provided to the water business until 2023.

Customer Services and Community Support Agreement

The Customer Services and Community Support Agreement (CSCSA) was entered into between ActewAGL and Icon Water in 2012 when responsibility for the operation and maintenance of the water and sewerage networks was internalised back into Icon Water.  The CSCSA sets out the arrangements for the provision of customer and community support services to Icon Water.  The CSCSA allowed for the continuation of the services provided to the water business until 2023.

Public and independent accountability and oversight

 
As Icon Water is a publicly owned company providing essential utility services to the community, there are a number of mechanisms in place for oversight of Icon Water’s business and operations. The independent bodies with different review and oversight powers include those outlined below.

Voting Shareholders and ACT Legislative Assembly

The Territory Owned Corporations Act sets out the circumstances for Icon Water to obtain prior approval of the Voting Shareholders, and in some cases the Legislative Assembly, for particular significant activities of Icon Water.

Icon Water’s Annual Report to the ACT Government is tabled in the Legislative Assembly in October each year. The Annual Report provides financial statements independently audited by the ACT Auditor General.

Every year, Icon Water’s budget and forecast over the forward estimates is published in the ACT Budget papers, which are available to the public and tabled in the Assembly.

In 2013, the ACT Government initiated a Review of Institutional Arrangements for ACTEW Corporation Limited (ACTEW) – the Cohen Review. The Review was asked to consider whether ACTEW’s institutional arrangements, which had been in place for some years, continued to be appropriate and reflect best practice.

Following a motion passed by the ACT Legislative Assembly in September 2018, the Hon Richard Refshauge was appointed as the Independent Arbiter to review the CSA and CSCSA (services contracts). The Hon Refshauge decided that it is not in the public interest to release commercially confidential information contained in those contracts.  The Hon Refshauge identified that there was some additional information in the contracts that could be made public and Icon Water subsequently provided revised redacted contracts to the Legislative Assembly on 9 November 2018. 

Australian Securities and Investments Commission

The Australian Securities and Investments Commission (ASIC) is an independent Commonwealth body responsible for (amongst other things) regulation of companies under the Corporations Act 2001 (Cth).

As Icon Water is an unlisted public company under the Corporations Act we must exercise corporate responsibilities including reporting and disclosure obligations in this regard. Icon Water is governed by an independent board of directors.

Independent Competition and Regulatory Commission

Under the Independent Competition and Regulatory Commission Act 1997 (ACT) the Independent Competition and Regulatory Commission (ICRC) sets prices for water and sewerage services in the ACT. In undertaking this role, the ICRC has objectives that relate to promoting effective competition and balancing efficiency considerations with environmental and social considerations. The ICRC’s periodic and detailed reviews of Icon Water’s operating costs seek to examine whether expenditure is prudent and efficient. This review specifically includes assessment of the operating costs payable by Icon Water under the corporate and customer services contracts. The ICRC is supported in this review by expert external consultants.

ACT Auditor-General

Icon Water is subject to the ACT Auditor-General’s annual Financial Audits and occasional performance audits, such as that relating to the Bulk Water Alliance in 2015.

The corporate and customer services


The corporate and customer services include unique support activities and services required for running a utility. There are a range of services within the corporate and customer services contracts, including those listed below:.

Corporate Services

Customer Services and
Community Support Services

  • Information communications technology (ICT) physical hardware, computer software systems and supporting technical services
  • Emergency contact centre 
  • Economic regulatory services
  • Human resource services
  • Tax
  • Treasury
  • Accounts payable
  • Procurement
  • Warehouse management
  • Fleet management
  • Property and security
  • Legal services
  • Accounting
  • Meter reading
  • Customer billing
  • Customer account management
  • Customer contact centre
  • Accounts receivable and credit management
  • Customer data storage and protection
  • Community communications
  • Corporate communications
  • Sponsorships

 

                                                                                                                                      

Future of corporate and customer services provision after 2023


The current contracts expire in 2023.

In preparation for and well in advance of this date, Icon Water will assess its ongoing service requirements and options. Future decisions regarding corporate and customer services will involve assessment of various service delivery arrangements in accordance with Icon Water’s procurement framework.

A key focus for Icon Water will be to ensure that we can maintain access to the support activities and services required to operate our business efficiently and effectively, so that we can continue to provide high quality affordable water and sewerage services to our customers.

Further information about the corporate and customer services contract obligations