5 Common Mistakes Water Businesses Make Between Regulatory Reviews

Ricardo’s 5 Common Mistakes Water Businesses Make Between Regulatory Reviews webinar brought together seasoned regulatory experts to unpack where water businesses commonly stumble between determinations, and what they can do to strengthen regulatory performance.

Across jurisdictions, the same themes recur: regulatory submissions may be strong, but the discipline required between reviews is often where value is lost.

Read some a summary of the webinar and key insights below or watch the full recording of the webinar.

Presenters:

• Courtney Rogers: Regulatory strategist, Brisbane.
• Richard Cawley: Regulatory professional, Adelaide.
• Tim Ryan: Regulatory economist, Melbourne.
• David Heeps: Former CEO of the Essential Services Commission, Victoria (regulator perspective).

The 5 Common Mistakes:

1) Not Embedding the Determination in Business Processes

A recurring challenge is the failure to fully integrate opex, capex, and service commitments into internal planning, budgeting, and performance monitoring. Without robust close-out processes and ongoing tracking, organisations struggle to explain variances, meet obligations, or maintain regulatory confidence.

• Problem: Opex, capex, and other commitments from the regulatory submission are not integrated into internal budgets, planning, or performance monitoring.
• Consequences:
• Difficulty tracking commitments or explaining variances.
• Impacts reporting to customers and regulators.
• Potential penalties and loss of regulatory trust.
• Solution:
• Conduct project close-outs, document outcomes, track variances.
• Embed budgets and commitments into business planning and monitoring frameworks.
• Create dashboards for ongoing tracking.

2) Not Conducting Lessons Learned After Submissions

Teams frequently move on after a submission, resulting in repeated mistakes and institutional knowledge gaps. Formal, timely lessons-learned processes, including inviting regulator input, help lift internal capability and build credibility over multiple price cycles.

• Problem: Organizations repeat mistakes and fail to embed previous learnings.
• Consequences:
• Repeated errors reduce team morale.
• Loss of credibility with regulators and peers.
• Solution:
• Conduct formal lessons learned immediately after submission and after receiving decisions.
• Include regulators in feedback sessions.
• Implement systemic changes and track actions with accountability.

3) Failure to Forecast or Flag Future Expenditure

Unflagged step-changes in future investment lead to customer surprises and regulatory distrust. Better integration of strategy, long-term planning, and regulatory processes, supported by adaptive planning and scenario analysis, helps smooth price trajectories and expectations.

• Problem: Large increases in expenditure (e.g., capex) not anticipated in long-term planning.
• Consequences:
• Customer price shocks and stakeholder dissatisfaction.
• Erosion of regulator trust.
• Solution:
• Integrate strategy, business planning, and regulatory processes.
• Use adaptive planning and scenario modeling.
• Maintain ongoing stakeholder engagement and proactive regulator communication.

4) Loss of Traction in Planning and Resourcing Post-Submission

Regulatory fatigue can slow implementation of determinations and hinder preparation for the next review. Long-term resourcing plans, realistic workload management, and embedded monitoring frameworks help sustain momentum across the cycle.

• Problem: After submissions, internal interest in regulatory projects drops due to regulatory fatigue.
• Consequences:
• Delays in implementing determinations and monitoring frameworks.
• Poor planning and resourcing for the next regulatory project.
• Solution:
• Develop long-term resourcing plans.
• Embed lessons learned into future projects.
• Manage workloads and ensure appropriate breaks for project staff.

5) Regulatory Processes Not Integrated with Strategy and Planning

When regulatory work sits apart from business strategy, customer engagement, and organisational planning, inefficiencies and duplicated effort follow. Process mapping, co-design, and continuous improvement help align regulatory requirements with long-term business direction.

• Problem: Regulatory processes operate separately from business strategy, planning, and customer engagement.
• Consequences:
• Inefficiencies, duplicated effort, customer/stakeholder fatigue.
• Difficulty operationalizing regulatory decisions.
• Solution:
• Integrate strategy, business planning, and regulatory processes.
• Process map, co-design, and monitor integrated processes.
• Identify efficiencies and improvements.

Regulator Perspective

David Heeps reinforced the fundamentals regulators look for: prudent governance, efficient investment decisions, and clear justification grounded in guidance — not rhetoric. Focus on:

• Demonstrating prudent governance.
• Make efficient investment choices.
• Provide clear reasons and justifications.
• Focus on regulator guidance rather than PR.

Key Takeaways:

• Proactively embed regulatory outcomes into business operations.
• Document lessons learned and implement actions.
• Plan and forecast to prevent surprises and price shocks.
• Address regulatory fatigue with long-term resourcing and structured planning.
• Integrate regulatory processes with strategy and business planning.
• Continuous engagement with stakeholders and regulators is critical.