{"id":14905,"date":"2025-04-01T12:16:10","date_gmt":"2025-04-01T11:16:10","guid":{"rendered":"https:\/\/isleutilities.com\/?post_type=executive-exchange&p=14905"},"modified":"2025-11-21T16:39:38","modified_gmt":"2025-11-21T15:39:38","slug":"ep-6","status":"publish","type":"executive-exchange","link":"https:\/\/isleutilities.com\/es\/executive-exchange\/ep-6\/","title":{"rendered":"Ep 6: Leading Through Transition: Gippsland Water’s Vision for the Future"},"content":{"rendered":"

When Your Biggest Customers Are Shutting Down: How Gippsland Water Is Turning Industrial Risk into Regional Resilience<\/strong>
\nExecutive Exchange \u2014 Episode feature with Sarah Cumming, Managing Director, Gippsland Water<\/em><\/p>\n

In this episode of the Exec Exchange, Dr. Piers Clark speaks with Sarah Cumming<\/strong>, Managing Director of Gippsland Water<\/strong> in southeast Australia, about a scenario that would terrify most utilities:<\/p>\n

Your largest industrial customers \u2013 who underpin your revenue, infrastructure scale, and regional economy \u2013 are all planning to partially or completely close within the next two decades.<\/em><\/p><\/blockquote>\n

Rather than waiting for the cliff edge, Gippsland Water is using that threat as a catalyst for long-term strategic planning, diversification, and regional economic leadership<\/strong>.<\/p>\n

\n

A Utility Built Around Industry<\/h3>\n

Gippsland Water operates in regional Victoria, covering 5,000 km\u00b2<\/strong> southeast of Melbourne and serving around 165,000 people<\/strong>. On paper, that sounds like a classic regional water utility.<\/p>\n

In reality, it\u2019s anything but typical.<\/p>\n

    \n
  • Only 20\u201330%<\/strong> of Gippsland Water\u2019s water and wastewater services go to domestic customers.<\/li>\n
  • En majority of volume<\/strong> is delivered to a small number of very large industrial clients<\/strong> \u2013 including power stations, gas production and large-scale manufacturing.<\/li>\n
  • The utility manages significant bulk infrastructure<\/strong> con high reliability contracts<\/strong>, where failure is not an option: losing service means losing power or gas to the state and the broader eastern seaboard.<\/li>\n<\/ul>\n

    This industrial base brings obvious advantages:<\/p>\n

      \n
    • Scale and resilience<\/strong> in infrastructure and water resources<\/li>\n
    • A strong role in regional economic development<\/strong> across four local government areas<\/li>\n
    • Deep relationships with state government and major employers<\/li>\n
    • The ability to act as a magnet for new investment<\/strong> into the region<\/li>\n<\/ul>\n

      But it also creates a unique risk profile.<\/p>\n

      \n

      The Shock: When Your Top Five Customers Are All in Transition<\/h3>\n

      Cumming doesn\u2019t sugar-coat it: every one of Gippsland Water\u2019s five major industrial customers has a plan to close or significantly scale down operations<\/strong> over the next 20 years, largely driven by Victoria\u2019s transition away from coal-fired generation.<\/p>\n

      On the wastewater side, these industries:<\/p>\n

        \n
      • Account for two of the largest wastewater flows in the state<\/strong>
        \nOn the water side, they are historically the second and third largest water users<\/strong> in Victoria (with the largest already halving its demand).<\/li>\n<\/ul>\n

        The implications are stark:<\/p>\n

          \n
        • A huge portion of revenue<\/strong> will disappear over time<\/li>\n
        • Infrastructure is oversized<\/strong> for a future with far lower industrial demand<\/li>\n
        • The region faces structural economic change<\/strong> \u2013 jobs, skills and secondary industries all being reshaped<\/li>\n<\/ul>\n

          On top of that, industrial customers bring the usual complications:<\/p>\n

            \n
          • Complex and sometimes contaminant-rich waste streams<\/strong><\/li>\n
          • Legacy contracts and arrangements<\/strong> that were not always set up on today\u2019s commercial or regulatory footing<\/li>\n
          • Legacy infrastructure<\/strong> designed and sized around historic demand that may not exist in the same form in 10\u201320 years<\/li>\n<\/ul>\n

            It\u2019s not just an engineering challenge. It\u2019s commercial, legal, social and political.<\/p>\n

            Which is exactly why someone with Cumming\u2019s background \u2013 litigation, industrial relations, governance and major IT projects<\/strong> \u2013 is in the MD\u2019s chair.<\/p>\n

            \n

            Negotiating Out of the Past and Planning for the Future<\/h3>\n

            Gippsland Water inherited a set of legacy arrangements<\/strong> with industrial customers that were, in Cumming\u2019s words, \u201cextremely challenging\u201d.<\/p>\n

            Rather than hoping they\u2019d quietly resolve themselves, the organisation has gone directly at the problem:<\/p>\n

              \n
            • Renegotiating legacy contracts<\/strong> to get to a more equitable and sustainable footing<\/li>\n
            • Taking a \u201cregional transition\u201d lens<\/strong>, not just a utility lens \u2013 accepting that the region\u2019s economy is changing and Gippsland Water must play an active role in that shift<\/li>\n
            • Putting serious effort into strategic planning<\/strong>, beyond regulatory timeframes, to think 10+ years ahead<\/li>\n<\/ul>\n

              Crucially, they have no<\/strong> simply passed risk onto households.<\/p>\n

              Over the last decade:<\/p>\n

                \n
              • En cost to serve<\/strong> has been consistently reduced year-on-year<\/strong><\/li>\n
              • Residential bills have been stable or slightly falling<\/strong><\/li>\n
              • The forward plan for the next 10 years is to continue lowering cost to serve<\/strong>, with the explicit aim of keeping bills stable even as much of Australia expects water prices to rise<\/li>\n<\/ul>\n

                That confidence doesn\u2019t come from optimism. It comes from building new revenue streams and cost avoidances<\/strong> that are tightly aligned to the core water and wastewater business.<\/p>\n

                \n

                Building Commercial Businesses That Actually Help the Core Utility<\/h3>\n

                Many utilities talk about \u201ccommercial diversification\u201d. Gippsland Water has actually done it \u2013 and importantly, done it in ways that:<\/p>\n

                  \n
                • Are adjacent to its core capabilities<\/strong><\/li>\n
                • Direcci\u00f3n real operational problems<\/strong><\/li>\n
                • Generate profit that directly benefits customers<\/strong><\/li>\n<\/ul>\n

                  Two businesses stand out.<\/p>\n

                  1. Gippsland Regional Organics \u2013 Turning Problem Waste into Profit<\/h4>\n

                  This is now Victoria\u2019s largest organics recycling facility<\/strong>.<\/p>\n

                  It started with a problem:
                  \nOne major industrial client had a difficult waste stream<\/strong> that was causing significant damage and cost to Gippsland Water\u2019s system.<\/p>\n

                  Instead of treating it purely as a compliance headache, the team looked for a way to manage and value-add<\/strong> that stream. The result:<\/p>\n

                    \n
                  • A for-profit organics recycling business<\/strong><\/li>\n
                  • Capable of processing large volumes of industrial and municipal organic waste<\/li>\n
                  • Generating a significant profit<\/strong> that:\n
                      \n
                    • Offsets operating costs<\/strong>y<\/li>\n
                    • Helps pay down debt<\/strong> linked to the residential customer base<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

                      As a publicly owned authority, those profits are not disappearing into a parent balance sheet. They are used to keep household bills as low as possible<\/strong>.<\/p>\n

                      2. Gippsland Regional Agribusiness \u2013 Smart Use of Land and Wastewater<\/h4>\n

                      The second commercial pillar is Gippsland Regional Agribusiness<\/strong>, a diversified farming and land management business operating 12 farms across the region<\/strong>.<\/p>\n

                      The origin again ties back to core operations:<\/p>\n

                        \n
                      • Gippsland Water needed a cost-effective, compliant way to dispose of treated wastewater<\/strong>.<\/li>\n
                      • Using land-based application and fit-for-purpose treatment standards is significantly cheaper than treating all wastewater to high discharge standards for waterways.<\/li>\n<\/ul>\n

                        The agribusiness:<\/p>\n

                          \n
                        • Saves nearly $2 million per year in operating costs<\/strong><\/li>\n
                        • Manages significant cropping enterprises<\/strong><\/li>\n
                        • Oversees some of the state\u2019s largest plantations<\/strong><\/li>\n
                        • Retains flexibility to adjust land use and cropping patterns to maximise value and system benefit<\/strong><\/li>\n<\/ul>\n

                          Neither of these businesses is a vanity project. Both exist because they solve concrete operational challenges y<\/strong>generate financial return that can be recycled back into the regulated business.<\/p>\n

                          One such business might be luck. Two begins to look like culture<\/strong>.<\/p>\n

                          \n

                          Positioning for the Next Economy<\/h3>\n

                          Looking forward, Gippsland Water is framing itself not as a passive victim of industrial decline, but as an active enabler of the region\u2019s transition<\/strong>.<\/p>\n

                          Key themes on the horizon include:<\/p>\n

                            \n
                          • Mine rehabilitation<\/strong>, potentially using water-based solutions where Gippsland Water can play a delivery role<\/li>\n
                          • Attracting new industrial users<\/strong> into the region \u2013 offering secure services and infrastructure to underpin private investment and jobs<\/li>\n
                          • Exploring waste-to-energy<\/strong> opportunities tied to the organics business<\/li>\n
                          • Assessing the potential for a wind farm<\/strong> on one of its more remote properties<\/li>\n
                          • Continuing to run multiple options in parallel<\/strong>, testing where capital is best deployed for the greatest long-term customer and regional benefit<\/li>\n<\/ul>\n

                            In other words, the utility is positioning itself as a platform<\/strong>: for decarbonisation, for circular economy solutions, and for new industries that can fill part of the gap left by coal and legacy heavy industry.<\/p>\n

                            \n

                            Leadership: Run Towards the Hard Problems<\/h3>\n

                            Cumming describes herself as a \u201cdeep generalist\u201d, and it shows. Litigation, industrial relations, corporate regulation, governance, major IT \u2013 these are not typical stepping stones to running a regional water utility.<\/p>\n

                            But for Gippsland Water\u2019s reality \u2013 legacy contracts, industrial complexity, regional transition and the need for new business models \u2013 that background is an asset.<\/p>\n

                            Her personal reflections land on two points:<\/p>\n

                              \n
                            • Make the work meaningful and have fun along the way<\/strong><\/li>\n
                            • The bigger the challenge, the better the critical thinking<\/strong> it forces<\/li>\n<\/ul>\n

                              Or, as Piers neatly distils it at the end of the episode:<\/p>\n

                              When something difficult appears, run towards it, not away from it.<\/em><\/p><\/blockquote>\n

                              For water sector leaders facing their own version of structural change \u2013 whether that\u2019s decarbonisation, regulatory pressure, demographic shifts or industrial decline \u2013 Gippsland Water\u2019s story offers a clear message:<\/p>\n

                              You can\u2019t control the macro trends.
                              \nYou can<\/em> control how early you start planning, how creatively you use your assets, and whether you treat risk as something to defend against or an opportunity to rebuild your business model<\/strong>.<\/p>\n

                              To hear the full conversation with Sarah Cumming<\/strong> and dive deeper into Gippsland Water\u2019s approach to industrial clients, commercial diversification and regional transition, listen to this episode of the Exec Exchange<\/strong>.<\/p>","protected":false},"featured_media":14899,"parent":0,"template":"","meta":{"_acf_changed":false,"_members_access_role":[],"_members_access_error":""},"class_list":["post-14905","executive-exchange","type-executive-exchange","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nEp 6: Leading Through Transition: Gippsland Water's Vision for the Future | Isle Utilities<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isleutilities.com\/es\/executive-exchange\/ep-6\/\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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