How the new 3Cs Framework is shaping customer value

Sydney Desalination Plant (SDP) plays a crucial role in ensuring a resilient water supply for Sydney as it grows. As the regulatory landscape evolves, so does SDP’s approach to delivering value for customers. We sat down with Cameron Shields, Head of Regulation at the SDP, to discuss the regulatory framework and how SDP is embracing it to shape a customer-centric future.

Q: Cameron, the Independent Pricing and Regulatory Tribunal (IPART) recently introduced a new water regulatory framework. Can you tell us what this framework is all about and what it means for the Sydney Desalination Plant?

A: IPART’s new water regulatory framework was published in 2023. The framework focuses on the 3C’s: Customers, Costs, and Credibility.

For SDP, this means a much stronger emphasis on developing pricing proposals that genuinely demonstrate and promote customer value. IPART’s expectation is clear. Every water business must actively involve and engage with its customers to develop a set of outcomes that are truly aligned with their preferences. It’s about moving beyond operational efficiency to identify better ways of delivering services by understanding what matters most to our direct customer, Sydney Water, but also to the people and businesses of Greater Sydney that we serve.

Q: When is the Sydney Desalination Plant scheduled to submit its inaugural proposal under this new 3Cs Framework?

We’re currently working diligently towards that. SDP is scheduled to submit its first proposal under the new 3Cs Framework in September 2026.

Q: What specific aspects of the 3Cs Framework do you believe will drive the most value for customers?

A: We are particularly excited about the flexibility embedded within this new framework. It allows us to craft a high-quality proposal that not only meets IPART’s expectations but also genuinely addresses the needs of our stakeholders.

Our vision at SDP is to provide safe, reliable, and high-quality drinking water to the people, households, and businesses of Sydney. The 3Cs framework enables our proposal to reflect the services that are most valued by Sydney Water, our direct customer, while also ensuring we deliver those services as efficiently as possible. This flexibility also gives us the scope to present our long-term operational plans that acknowledge and integrate important feedback about what water users in Sydney value.

Q: Customer engagement is clearly a cornerstone of the 3Cs framework. Can you elaborate on the key components of SDP’s enhanced customer engagement strategy under this new approach?

A: Customer engagement is absolutely central to our next regulatory proposal moving forward, and we’ve put a significant amount of focus on aligning our corporate and customer engagement strategies.  We believe that truly understanding our customers’ priorities is the only way to continue delivering meaningful value.

A key component of our engagement strategy involves a series of deliberative engagement workshops. These workshops bring together critical stakeholders, including Sydney Water, the NSW Government, and crucially, members of our Customer Advisory Panel.

Our Customer Advisory Panel is a particularly exciting initiative. It’s comprised of sophisticated customer advocates who will play a vital role in helping SDP interpret and understand what water users in Sydney truly value. This multi-faceted approach ensures that our decisions are informed by a wide range of perspectives, leading to a more customer-centric outcome.

Q: How is SDP leveraging data from Sydney Water’s engagement program to inform its own customer approach?

A: We’ve established a data sharing agreement with Sydney Water, which has provided us with access to the data from their extensive customer engagement program, ‘Our Water, Our Voice.’

We are using this data to gain a deeper understanding of what water users in Sydney value. It allows us to analyze how the feedback they provided to Sydney Water relates specifically to SDP and the essential services we provide. This information is instrumental in helping us develop a regulatory proposal that aligns with what both Sydney Water and its end customers value.

Q: The cost of energy is significant for producing desalinated water. How will SDP’s future energy procurement approach be integrated and presented within the 3Cs regulatory process?

A: You’re right, producing desalinated water is an energy-intensive process and we’ve made a binding long-term commitment to ensure our energy supply is 100% renewable. The Australian energy market is in the midst of a generational transformation, which means the costs and risks associated with future renewable energy procurement are heightened. In this context and because energy is a key cost component for SDP, our goal is to ensure that whatever approach we take is prudent and efficient, allowing us to continue delivering high-quality desalinated water at the lowest possible cost to water users. We will be engaging extensively with our key stakeholders to discuss the various options available. This will all culminate in our next regulatory proposal, where we will outline a clear and customer-interest-focused approach to how SDP procures its energy.”

Q: Finally, Cameron, how will the Sydney Desalination Plant demonstrate its commitment to these key issues through the regulatory process, specifically within the context of the 3Cs Framework?

A: SDP is dedicated to undertaking a high-quality and transparent engagement process. We want to demonstrate what best-practice customer engagement looks like for a bulk water supplier. As part of our approach, we will openly discuss key issues with all our stakeholders and actively seek to incorporate their feedback into our regulatory proposal.

The 3Cs framework elevates the role of customer engagement, and we see this as a fantastic opportunity for SDP to clearly demonstrate how the vital services we provide are directly aligned with what our customers value. We believe this transparency and commitment to listening will build greater trust and ensure that the SDP continues to be a valued and essential part of Sydney’s water future.