1. Better Regulation Program Service Provider Consumer Engagement Guideline Consumer Forum March 2013

2. Service Provider Consumer Engagement Guideline Overview Introduction Why this guideline? The survey of service providers AER’s views on this guideline? Case studies Where to from here? 1

3. Purpose of consumer forum Seeking input on 3 items: 1.AER’s process and approach to development of this guideline 2.Objective/nature of the guideline 3.Issues to be addressed in the guideline 2

4. Why this guideline? AEMC rule change puts focus on consumers Specific requirements on service providers to engage with consumers AER guide to compliance 3

5. The IAP2 community engagement spectrum Goal: To provide the community with balanced and objective information to assist them in understanding the Service provider’s role, scope and options. To obtain community feedback on analysis and options. To work directly with stakeholders to ensure that community concerns and aspirations are consistently understood and considered. To partner with stakeholders in key aspects of investigation including the development of alternatives and the identification of preferred solutions. Decision making. 4 IAP2 – International Association for Public Participation: www.iap2.org.au

6. Current engagement Currently, the level of engagement is not balanced Engagement tends to be between AER and NSPs AERNSPConsumers 5

7. ‘Survey’ of consumer engagement Regulatory proposal Consumer Advisory Councils and annual forums One-way communication e.g. newsletters or consult when need arises e.g. capital investment Little or no consultation on regulatory proposals It is unclear how input from Consumer Council members is used in decision making processes All service providers inform consumers. Minimal ‘conversations’ with consumers. Business focussed/led research 6

8. What’s good? Generally, the businesses are undertaking a large range of activities including: –Newsletters –Customer councils –Social media/website initiatives –Project or community specific forums –Surveys –Brand recognition programs Businesses are positive about consumer engagement including new requirements 7

9. What’s not so good? Generally, engagement is not systematic –Ad hoc –Reactive –Not consistent (between businesses or over time) –Misses some consumer groups –Sits to the left of the IAP2 spectrum 8

10. ‘Survey’ – Challenges identified by service providers Building trust Explaining energy market, economic and regulatory concepts Increase knowledge of consumers Consumer buy-in for genuine engagement 9

11. Greater consumer input needed Price verses reliability tradeoffs Tariff setting and tariff design –time of use and critical peak tariffs Setting reliability targets/standards Network renewal/upgrade Demand hot spots Alternatives to capital investment 10

12. What does effective consumer engagement look like? 11

13. Case Studies Identified several businesses that have developed consumer engagement strategies –Yarra Valley Water –Hunter Water Corporation –Port Macquarie Council 12

14. Yarra Valley Water Driver for consumer engagement came from the highest level in the organisation Fundamental challenge - move from a water proposal that complied with the rules to something the community easily understands Commitment to be the customer’s best service provider (even though a monopoly) 13

15. UNDERSTANDING CUSTOMER TYPES …… I need to know I am doing the right thing, what do I do next with my water use? I value being, and being seen to be, a good community member I need my water provider to do a better job of the basics before I trust them more. I value the fundamentals, I want good quality water piped to my house. I need to be informed about water in a way that doesn’t completely bore me or eat up my time I value my time, I don’t care a lot about water, you’ll have to work hard to reach me at the moment I need to understand how my water use affects causes I care about I value water safety and environmental sustainability, but I am not going to go and protest about it I need to know that the water I use is as sustainably and ethically sourced as possible I value the environment and community, I want good water to be available for future generations I need to concentrate on whether I have enough for this month’s rent, water is not a priority I value being thought of, too often I am just ignored 14

16. Yarra Valley Water Forms of consultation included community forums (‘citizens juries’), business forums, surveys, on-line portal for customs to access all relevant information, as questions and provide feedback on proposal. Reconstituted the Community Advisory Group with a fresh scope, structure and style of deliberation Proposed change from price cap to revenue cap 15

17. Hunter Water Corporation Consultation embedded in all regulatory processes. Conducts research and consultation on: –Willingness to pay including information on overall impact on customers’ bills for certain projects –Service rebates –Location of new developments 16

18. Port Macquarie-Hastings Council Training of staff so consumer engagement embedded in culture Tools used to consult included a Community Reference Group Budget allocator and web forum Council clearly identified community’s priorities rather than planning based on assumptions 17

19. Recap Prescriptive versus aspirational Resourcing constraints given demands on consumer groups Realistic expectations for NSPs given the need for culture change Finding the keys to success 18

20. Where to from here? Thank you for your contribution. Further comments are welcome & you may register for updates by emailing consumerengagement@aer.gov.au consumerengagement@aer.gov.au 19