1. slide 1 Consumers’ Expectations of Electricity Distribution Network Operators (DNOs) & Their Willingness to Pay for Improvements in Service ACCENT APPROACH

2. slide 2 Issues Taken Into/To Take Into Consideration In addition to basic survey objectives: Feedback from DNOs on process and results of the previous survey Our own learning from the previous study Ofgem’s Social Action Strategy; representation of the fuel poor Increasing environmental awareness and impact on consumer views and DNOs

3. slide 3 Summary of Approach Stage 1 – QUALITATIVE: –1 stakeholder workshop –8 “deliberative” groups with domestic customers –8 “deliberative” mini groups with SMEs –8 face-to-face “vulnerable” depths –8 face-to-face large business depths Stage 2 – QUANTITATIVE –2100 domestic interviews (150 per DNO area) –1050 business interviews (75 per DNO area) A Two Stage Approach, Using A Comprehensive Programme of Qualitative Research in Stage 1, Considered Sufficient

4. slide 4 Key Team Members Miranda Mayes – Project Manager (1) –Director –Over 16 years research experience –Expert in the use of stated preference and customer prioritisaytion –Work principally in the utilities sector and government sectors –Manager of the DPCR4 study Rick Ginter – Project Manager (2) –Research Director –Over 20 years research experience –Expert in the use of conjoint techniques & customer prioritisation –Strong background in utilities research with US & UK companies Rob Sheldon – Project Director –Accent’s Managing Director –Over 30 years experience in market research –Internationally recognised expert in the field of stated preference; over 1000 stated preference studies –Strong track record in the utilities sector; several hundred studies including 8 current PR09 studies for the water sector –Director of the DPCR4 study Nancy Curzon – Lead Qualitative Consultant –Senior Qualitative Consultant; former Director of Outlook Research –Over 15 years research experience –Provides qualitative trainiing on behalf of the MRS –Expertise in utilities sector –Lead qualitative consultant on DPCR4 Charlene Rohr - Director of Modelling Team, RAND Europe Cambridge –Over 15 years experience –Expertise in estimation of discrete choice models using, eg, SP data –Development of forecasting systems from these models –Has worked on numerous WTP studies –Clients have included Mid Kent Water, Northumbrian Water, Severn Trent Water, Transport for London, Postwatch and Royal Mail

5. slide 5 Stage 1 – Domestic Groups Eight groups 105 minutes duration Proposed structure (across 8 locations, to be defined): Customer Type Consumer GeographyUrbanRural Location12 3456 78 Age20-4041-60 20-40 41-60 20-40 SEGABC1C2DEABC1C2DE ABC1C2DEABC1 *Each C2DE group will include 1 or 2 from Ofgem’s priority consumer group & some who have experienced cuts Deliberative & pre-tasked Other techniques will include: –Importance rankings –“Third person” technique

6. slide 6 Stage 1 – Vulnerable Depths Eight depths 45-60 minutes duration Proposed structure Customer Type VulnerableNo. Geography Urban Rural 448448 Location Scotland West East Anglia South East (tba) 2222822228 Also: –a spread of age & disability –spread of bill sizes & energy dependency Deliberative & pre-tasked *Will include some who have experienced cuts

7. slide 7 Stage 1 – Business Mini Groups – SMEs Eight groups 105 minutes duration Proposed structure: Deliberative & pre-tasked: Other techniques will include: –Importance rankings –“Third person” technique Customer Type SME GeographyUrbanRural Location12 3456 78 SizeSmallMediumSmallMediumSmallMediumSmallMedium *Each group will include some who have experienced cuts

8. slide 8 Stage 1 – Business Depths Eight depths 45-60 minutes duration Proposed structure Customer Type Large BusinessNo. Geography Urban Rural 448448 Location Scotland South-East East Anglia West (tba) 2222822228 Also: –mix of businesses –spread of bill sizes/energy dependency Deliberative & pre-tasked *Will include some who have experienced cuts

9. slide 9 Stage 2 – Quantitative Research Method Stated preference (SP) technique to determine priorities & WTP; particularly robust means of determining the above Uses “realistic” choices Cost is just one of many important variables the respondent is asked to trade off: –avoids the bias that can arise from open ended questions which allow respondents to make a political statement through their responses Results identify “relative” importance in a way that ranking and rating can’t Face-to face interviews for consumers; telephone interviews for businesses

10. slide 10 Stage 2 – Domestic Interviews 2100 domestic interviews –150 per DNO Allows for segmentation of DNO prioritisation & WTP results by 2 (and possibly up to 3) breaks, eg: –age:  16-29, 30-49, 50+  16-49, 50+ –SEG:  AB, C1C2, DE  ABC1, C2DE –location:  urban  rural –experience of cuts:  yes  no

11. slide 11 Stage 2 – Business Interviews 1050 business interviews Allows for segmentation by DNO (14 * 75) “May” allow for further segmentation by, for example, rural/urban and business consumption but only given homogeneity of results

12. slide 12 Questionnaires All developed in consultation with Ofgem, DNOs and other stakeholders Quantitative questionnaire will be informed by qualitative research findings Quantitative questionnaire will use “actual” data (eg average number of cuts, average length of interruptions, bill size etc) Quantitative questionnaire will be thoroughly piloted: –100 domestic –40 business Show material will be incorporated wherever necessary

13. slide 13 Example of Questionnaire Software

14. slide 14 Deliverables Draft report Presentation Final report All will include: –Summary of Key Findings –Detailed Findings –Relative Priorities (co-efficients/utilities/values) –WTP –Recommendations