Ref: 20190923BK:JC

26 September 2019

Dr Wendy Craik AM, Dr Cassandra Goldie Mr Andrew Richards and Mr Phillip Weickhardt Accountability Panel The Charter

E-mail: [email protected]

Dear Accountability Panel Members We are pleased to submit ’s Energy Charter Disclosure Statement for the reporting period 1 January to 30 June 2019. Essential Energy’s commitment to customers has been refocused in the period since July 2016 through a dedicated Customer Connected Program comprising segmentation, research and analysis, extensive consultation and education. Through this work, we have gained a clearer understanding of our customers’ profiles and their current and future needs, and the opportunities and obstacles meeting these needs may present. We now actively place customers at the centre of everything we do. Our customers have told us that power supply safety, reliability and affordability are their key priorities. We have listened and commenced work to improve our performance in these areas. Our organisational Investment Value Framework takes power supply reliability, safety and bushfire risk into consideration as part of business decisions and is helping us continue to exceed independently audited reliability requirements, with network reliability today more than 30 per cent better than 15 years ago. Our Public Electrical Safety Awareness Plan raises public awareness about safety hazards associated with the network, with a targeted focus on six key at-risk groups – agribusiness, aviation, building construction and demolition activities, emergency services and public authorities, general public in relation to renovations, DIY, vandalism, vehicle use, and transport. We’ve made improvements in our organisational safety performance and behaviours, but we know we have more to do. A Health, Safety and Environment Strategy has been developed to further facilitate improvements, and we’ve commenced implementing it progressively. Other areas for improvement include enhancing employee engagement and satisfaction, addressing poor communication with customers reliant on continuous electricity supply for life support equipment and replacing non- compliant master-subtractive metering with smart meters. We are pleased to report that Essential Energy is a key contributor to downward pressure on electricity pricing. Our network charges today are 40 per cent lower than in 2014, and account for approximately 37 per cent of the average electricity bill. We will maintain this downward pressure during the five years from 1 July 2019, delivering real network charge reductions and setting a platform for further reductions beyond 2024. Our overall Customer Satisfaction Index is currently around 85 per cent, and we have received acknowledgement for our 2019-24 revenue and pricing consultation program from independent industry bodies such as Energy Networks Australia, consumer advocates including the Public Interest Advocacy Centre and, most importantly, from our customers.

PO Box 5730 Port Macquarie NSW 2444 | ABN 37 428 185 226 Telephone: (02) 6589 8333 | Interpreter Services 13 14 50 | essentialenergy.com.au 26 September 2019 ______Essential Energy’s Energy Charter Disclosure Statement Page 2 of 2

Consultation with our customers and stakeholders is ongoing to ensure our operations remain aligned to emerging needs. Their insights are critical to informing Essential Energy’s whole-of-business Transformation Plan, which will deliver long-term efficiencies and help maintain pricing affordability. We’re also proactively collaborating across the with regulators, retailers, technology suppliers, industry groups, public interest advocates and directly with customers to understand changing generation and distribution opportunities – working towards building the energy network of the future and fulfilling our role as an economic enabler for regional, rural, and remote NSW. In parallel, as a signatory to the Energy Charter and through reporting our alignment with the Charter’s principles, we will be better positioned to: • Understand current performance levels and areas for improvement, benchmarked against our industry peers; • Ensure we remain focused on and accountable for improving customer service and experience; • Learn from other industry participants’ experience; and • Implement changes in corporate culture and operations that will benefit customers in the future.

Yours sincerely

Robyn Clubb John Cleland Interim Chair Chief Executive Officer

PO Box 5730 Port Macquarie NSW 2444 | ABN 37 428 185 226 Telephone: (02) 6589 8333 | Interpreter Services 13 14 50 | essentialenergy.com.au Essential Energy distributes electricity to >1500 regional, Our customer service journey rural & remote communities across 95 per cent of NSW Prior to 2011, our predecessor organisation, , had a dual role – both supplying electricity through its network of poles and wires, and retailing it to residential, small and large business customers. Following the sale of the retail arm to the private sector in 2011, our name was changed to Essential Energy and we became a network-only business, responsible solely for distributing electricity to around 855,000 customers.

When the retail and network functions were separated, our focus shifted from direct customer service to operational performance. In 2015, our research showed that most customers didn’t understand Essential Energy’s role in the overall electricity supply chain, or when and how to contact us for issues relating to our network operations. We acknowledged that understanding our customers’ needs and providing them value needed to become our central focus. Since July 2016, we have sought to proactively re-engage with our customers to understand their profiles and work towards meeting their current and future needs. We now value customer engagement as a key planning tool and challenge ourselves to actively place customers at the centre of everything we do. Today, engagement with our customers is helping to shape Essential Energy’s strategies to strengthen our core operations and maximise the full value of our existing network assets. Ongoing engagement will inform our five-year, whole-of business transformation plan aimed at: • achieving savings of at least $84 million per annum by 2023-24, and lower network charges • meeting customer demand for affordable alternative options for generation and distribution in a rapidly changing energy environment • fulfilling our role as an economic enabler for regional, rural, and remote NSW.

Our customer groups

Energy Charter Disclosure Statement Essential Energy – 1 January to 30 June 2019

Principle 1: Customer-centricity A cultural imperative, evidenced through accountable reporting ‘The more you engage with customers, the clearer things become and the easier it is to determine what you should be doing.’ Chantelle Bramley, General Manager Strategy, Regulation & Corporate Affairs

2015-ongoing 2011-15 2011 Refocus on customers via Confusion among general Sale of Country Energy retail Customer Connected public over retail vs supply arm to segmentation, research & responsibilities analysis, Customer Commitment Remaining distribution-only Essential Energy focus more Statement, Customer Advocacy business renamed Essential on operations & less on Group, consultation programs & Energy customers ServiceNow complaints management system

Essential Energy partnered with EY Sweeney in Q2 FY17-18 to develop a six-segment model of residential energy users. As a second phase, this will be simplified to three core residential segments, based on consumer needs, engagement with energy supply/usage, and interest in receiving information from Essential Energy.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 2 of 29 | Head of Customer Experience [email protected] 0439 860 227

Essential Energy’s Customer Connected Initiative is facilitating a shift to a customer- Essential Energy has established a Customer Advocacy Group as a proactive forum centric focus by better understanding our customers, anticipating and collaborating on for consultation, engagement and insight across Essential Energy’s customer base, on their energy needs and positioning our business to meet changing generation and any matters relating to the supply of electricity and associated services. The Group distribution needs. The initiative incorporates five interrelated streams: meets quarterly. Representation includes: • Customer and market segmentation Quantitative and qualitative market research into customer segments, motivators, Industrial and commercial customers behaviours, and future trends - delivered via external research partners - to provide Aboriginal and Torres Strait Islander people Local government the data required to enhance existing customer services, improve stakeholder Advancing technologies and renewables Low-income households relations, and pursue targeted commercial opportunities. Consumer groups Minority groups • Brand understanding and growth Environmental Ongoing market research delivered via external research partners to quantify current state brand perceptions/brand value, inform future brand strategy, and leverage communications and marketing channels/strategies to enhance the brand in existing markets and successfully position Essential Energy as an energy ‘go-to’ partner in Essential Energy emerging energy markets. • Best practice customer strategy Utilise customer insights and understanding to inform current customer strategies and People from non-English speaking Rural and remote customers deliver an ‘Easy Energy’ customer strategy, best practice customer service, backgrounds Senior citizens communication and engagement, while simultaneously enhancing a customer People with disabilities Small business customers focused culture within Essential Energy’s business. Primary producers • Vulnerable customers Enhanced stakeholder relations Residential customers An immediate, proactive and ongoing key stakeholder engagement program encompassing regulators, consumer groups, and policy makers to influence and deliver best practice, long term commercial outcomes for the business. • Customer Interaction Management (CIM) system Essential Energy’s Customer Contact Centre is a critical part of our customer Replacement of the existing Complaints Management System with a modern, service- engagement approach. Operators received more than 135,776 phone calls regarding tracking solution that will be easier to use, mobile device friendly, and provide power supply outages during the reporting period. employees with a broader view of our customers and their interactions with Essential To improve customer experiences and become easier to do business with, in late June Energy. 2019 we improved our automated telephone messages to provide customers with real- time updates for power outages that are tailored specifically for their address. If calling from a mobile, they can choose to receive a link via SMS to report an outage. These improvements have reduced average call waiting time to 25 seconds Essential Energy launched a new ServiceNow Customer Interaction Management across all call types – the lowest outcome system on 14 February 2019. This system replaced a Lotus Notes Complaints for any month in more than four years – Management System database as the core system of record for the management of and improved our Service Target complaints by Essential Energy. It provides reporting and visibility around complaint Performance Incentive Scheme (STPIS) information to improve resolution and services to customers. The system is also used outcomes. for capturing and managing customer enquiries, service requests and for recording This aligns with and supports our values stakeholder engagement events. Since implementation, open claims and complaints of being easy to do business with and have reduced by more than 50 per cent through better automation, more timely making every dollar count. responses to customers and improved management reporting.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 3 of 29 | Head of Customer Experience [email protected] 0439 860 227

2019-24 Regulatory Proposal consultation program 2019-24 Regulatory Proposal consultation Every five years, the Australian Energy Regulator (AER) determines the revenue required to construct, maintain and operate Essential Energy’s distribution network in accordance with the National Electricity Law and National Electricity Rules economic regulatory framework. The AER assesses and approves distribution network expenditure at a level it deems to be efficient and prudent. Prices are then set to allow recovery of these costs and are approved by the AER on an annual basis to ensure compliance with the revenue determination. Essential Energy implemented a three-phased engagement program to share information and seek feedback about its Regulatory Proposal for 2019-24 pricing and revenue, and inform future business plans. Consultation covered all key aspects of Essential Energy’s Proposal. Its success was recognised with the Energy Consumers Australia and Energy Networks Australia Consumer Engagement Award 2018. The Public Interest Advocacy Centre (PIAC) rated Essential Energy’s engagement around its 2019-24 Regulatory Proposal highest of the NSW Distribution Network Service Providers (DNSPs) at 4 out of 5 stars in its formal Evaluation of Consumer Engagement by NSW DNSPs 2017-18, stating: ‘Essential Energy sought consumer representative views on its pricing strategy and presented forum participants with fair and balanced information. Trade-offs were presented to participants as such and staff refrained from influencing participant choices. This allowed participants to provide clear feedback…that affordability was the key issue for them, and they were willing to trade some reliability for lower network charges.’

Areas for improvement Essential Energy is committed to embedding Energy Charter principles into our operations. During the next reporting period, our Board will introduce a monthly meeting standing agenda item on the Energy Charter. We will be including information about the Energy Charter and associated expected behaviours in our induction pack for new employees and will be developing a customer service training program for the business. We will also be developing a new Customer Experience Strategy in FY20. Customer forums commenced to inform Essential Energy’s 2019-24 Regulatory Proposal will be ongoing to inform future business strategies.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 4 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 1: We will put customers at the centre of our business and the energy system Principle in action Customer outcomes Activity Evidence 1.1 Have a Board that Board understands and considers Board: Board: actively oversees the customer impacts when making • monthly CEO report includes a section on customer • approves the corporate values, which include being business’ culture so as strategic decisions insights, including key customer metrics, customer easy to do business with and making every dollar to be aligned with Energy complaints, compliments and areas for opportunity, count Charter Principles. employee survey outcomes and potential wrong-doing • Charter incorporates a Code of Conduct that aligns disclosures with Energy Charter principles • members participate in Customer Advocacy Group and • members’ performance is measured against the other key stakeholder meetings Charter annually • Regulatory Committee includes Energy Consumers Australia voluntary representation 1.2 Have management Essential Energy’s: Corporate management: Corporate management: operationally • corporate management is • applies the principles of its Customer Commitment • has some Key Performance Indicators (KPIs) that accountable for committed to maintaining and Statement across the business are specifically aligned to customer priorities and embedding a ‘customer improving customer satisfaction • reviews monthly reports on Listen Respect Deliver remuneration is tied to KPI delivery at the centre’ culture. and customer outcomes principles and Customer Satisfaction Index • are committed to a formal Customer Commitment • corporate performance metrics • has established a Customer and Stakeholder Statement Reference: include safety, customer & Engagement Strategy, Framework and Plan, endorsed https://www.essentialenergy.com.au/about- community and Energy Charter in March 2019 us/corporate-governance/policies reporting metrics • is progressively developing and implementing the • ensures customer complaints are reported against Framework’s supporting strategies and actions the Customer Commitment Statement and relevant • has implemented a Transformation Plan that business operational area incorporates a dedicated Customer Experience • tracks customer and stakeholder engagement strategy against business values and key success metrics such as customer effort, customer satisfaction and media sentiment to assist in ensuring we meet our business and transformation objectives and that we are ‘easy to do business with’ Corporate performance metrics are measured via a Corporate Scorecard Reference: https://www.essentialenergy.com.au/- /media/Project/EssentialEnergy/Website/Files/About- Us/StakeholderEngagementFramework.pdf 1.3 Ensure their work Employee engagement: Employee engagement: Employee engagement: force is engaged and • is actively promoted through • is assessed through regular surveys (with • through Essential Engagement platform Reference incentives are aligned to Essential Engagement hub improvement plans currently being developed) https://engage.essentialenergy.com.au/staff- drive positive customer Employee: Employee: engagement-projects outcomes. • coaching and incentives focus • customer service achievements are encouraged Employee: on delivering and improving through Reward and Recognition Awards for customer • senior management Key Performance Indicators customer outcomes, including outcomes (KPIs) are aligned to customer satisfaction scores operating more efficiently to

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 5 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 1: We will put customers at the centre of our business and the energy system Principle in action Customer outcomes Activity Evidence reduce distribution network • coaching includes input from Voice of Customer • engagement is regularly assessed through Gallup charges surveys and Workplace Pulse surveys • customer service achievements are assessed through ServiceNow customer surveys and excellent customer service is acknowledged through monthly Most Valuable Player awards 1.4 Have robust Customer and stakeholder: Customer and stakeholder: Customer and stakeholder feedback is obtained processes to determine • complaints management • complaints response and engagement activities through: customer and system reporting supports managed through a new customer information • market research community needs and be business improvement management system, Service Now • new ServiceNow complaints management system accountable on how initiatives and has reduced • feedback obtained through a Customer Connected introduced in February 2019 feedback has been open claims and complaints by initiative comprising customer segmentation, brand • Customer Advocacy Group considered and more than 50 per cent, perception and customer experience research/audits, • Council consultation on streetlighting and incorporated into facilitating faster resolution forums and consultation decision making. vegetation management timeframes • participation in forums informed Essential Energy • consultation around the 2019-24 Regulatory • Customer Connected Initiative 2019-24 Regulatory Proposal has enhanced customer and Determination aligns with the AER’s Consumer • Private Asset Management program consultation Engagement Guideline for Network Service stakeholder relationships, undertaken to minimise customer impacts unlocked customer intelligence Providers (IAP2 compliance) and driven a shift to a • Essential Engagement platform Reference customer-centric focus by https://engage.essentialenergy.com.au/ profiling our customers and • https://www.piac.asn.au/2018/08/08/piac- anticipating and collaborating evaluation-of-consumer-engagement-by-nsw- on their energy needs dnsps-2017-18/ • award-winning consultation Corporate management: around the 2019-24 Regulatory • reviews customer complaints and Customer Determination has resulted in Satisfaction Index monthly positive, customer focused • has implemented ServiceNow customer and outcomes stakeholder interaction management system • Private Asset Management Reference Accredited Service Provider Forums Section program consultation has 2.3 improved customer outcomes, Reference https://www.essentialenergy.com.au/about- with proactive calls and us/customer-and-regulatory-information/regulatory- ongoing support to help proposal customers understand their obligations resulting in less Reference: https://www.essentialenergy.com.au/at- than 1 per cent of customer home/private-power-poles defects generating a complaint 1.5 Demonstrate a Actively exploring opportunities to Innovation: Innovation: culture of innovation and improve safety, reliability and • established a dedicated Innovation Team to foster new • prioritised and funded innovation programs collaboration for positive affordability outcomes for customers ideas and an innovative culture approved, including:

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 6 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 1: We will put customers at the centre of our business and the energy system Principle in action Customer outcomes Activity Evidence customer outcomes, associated with alternative energy • brought industry experts into Essential Energy to share − trialling Stand Alone Power Systems (SAPS) including through the delivery and pricing mechanisms knowledge and answer questions to increase power supply reliability and lower sharing of insights with • launched an Energise Employee Innovation Portal that costs for customers in high cost to serve government, research enables all employees to capture innovation ideas and locations institutions and across provides a framework for developing the idea − gaining visibility of the low voltage network to the supply chain, as well • commenced trialling a Pole Cavity and Structural increase hosting capacity of solar panels on as joint advocacy on Inspection Drill to improve risk management and our network regulatory, policy and quality of pole inspections Byron Bay microgrid trial: operational issues. Byron Bay microgrid trial: • Reference https://enovaenergy.com.au/about- • working in partnership with community-owned retailer us/projects/ Enova Energy to understand how customers can Regulatory change submissions: participate in peer-to-peer trading • on regulatory sandbox on 31 January 2019 • is providing insight into how shared energy asset • to IPART review on distribution reliability standards ownership changes consumer behaviour draft terms of reference on 12 February 2019 Regulatory changes: • on transparency of new projects on 23 May 2019 • input into regulatory changes such as reliability • attended AEMC / ARENA / DEIP workshop to standards with IPART, with the aim of reducing discuss the future role of networks on 6 June 2019 customer prices Network tariffs: • future role of networks with Australian Energy Market • meeting with AEMC on 6 February 2019 Commission (AEMC) / ARENA • SAPS: Network tariffs: • hosting AEMC visit to Essential Energy SAPS trial • input to AEMC on how network tariffs can better site in Bulahdelah on 17 January 2019 benefit customers • submission to SAPS Priority 2 issues paper 29 Stand-Alone Power Systems (SAPS) trials: March 2019 • engagement in developing regulations for SAPS that • submission to SAPS Priority 1 draft report on 5 focus on customer experience and outcomes February 2019 Virtual Power Plant (VPP) trials and registers for • presentation at Energy Networks Australia (ENA) / Distributed Energy Resources (DER): AEMC SAPS review workshop on 21 February • input to NSW Government on program development 2019 for VPP and DER implementations Virtual Power Plant (VPP) trials and registers for Principles for Managing Voltage Variation claims in NSW Distributed Energy Resources (DER): and associated customer communications: • engagement with NSW Government on trials for • collaboration with EWON, and Endeavour VPP and DER implementations commenced in January 2019 to provide customers Principles for Managing Voltage Variation claims in with greater consistency and certainty NSW and associated customer communications: Reference Networks Renewed trial Section 2.3 • due for completion in September 2019 Reference evolve industry collaboration project Section 3.3 Reference Electric Vehicle Charging Industry Working Group Section 3.4

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 7 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 1: We will put customers at the centre of our business and the energy system Principle in action Customer outcomes Activity Evidence Reference Transformation Plan Section 4.1 Continuous Improvement 1.1: In future, Essential Energy’s Board will have a monthly meeting standing agenda item on the Energy Charter. for the Principle 1.2: Essential Energy will be introducing information about the Energy Charter in its induction pack for new employees and will be developing a customer July 2019 to June 2020 service training program for the business. We will also be developing a new Customer Experience Strategy in FY20. 1.2: Management training around ‘customer at the centre’ culture will be developed as an outcome of a Customer Experience Audit conducted in April 2019 1.3: A review of our Customer Journeys will be undertaken to inform and shape our Customer Experience Strategy 1.4: Customer forums commenced to inform Essential Energy’s 2019-24 Regulatory Proposal will be ongoing

Principle 2: Energy Affordability ‘Pricing affordability underpins our focus on securing safe and reliable Prudent investment now for affordable energy services in the future network services, facilitating new energy solutions and fulfilling our role as

Customer affordability an economic enabler for regional, rural, and remote NSW.’ David Salisbury, Executive Manager Engineering Prior to 2012, Essential Energy’s network charges were a significant contributor to overall electricity price increases. Over the past five years to 2019, we have been a key Customer consultation is informing Essential Energy’s ongoing tariff reform process, contributor to downward pressure on pricing. resulting in residential and small business customers moving to better value solutions. The AER has confirmed nominal network charges will increase by around $24 over the Customers can now choose between our default cost-reflective time of use tariff, a five-year period 2019-24, or $1.20 per quarter for typical residential customers, demand tariff and a flat rate. Our cost-reflective tariffs are offered at a favourable price to significantly below the forecast rate of inflation. By 2024, this equates to a relative real encourage customer uptake, and we have also shortened the time period for the demand saving of $14 per quarter for residential customers compared to existing network charge applied to small customers to provide incentives to change electricity consumption distribution charges. behaviour and benefit from lower energy bills. In real terms, Essential Energy is on track to deliver close to a 45 per cent reduction in residential network distribution charges over the period 2012-23 to 2023-24.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 8 of 29 | Head of Customer Experience [email protected] 0439 860 227

Networks Renewed trial Essential Energy participated in the Networks Renewed trial, aimed at enabling continual uptake of solar PV with minimal customer impact, and enabling customer batteries to be central to the solution to addressing network voltage challenges at lower cost than traditional network options. Investment Value Framework The trial tested potential for modern smart inverters (both solar and This diagram captures the inputs and steps that battery inverters) to provide voltage management services to the network fed into the development of Essential Energy’s through dynamic control of real and reactive power. investment portfolio, underpinned by our robust The three-year trial subsidised over 30 customers on a constrained rural value framework. powerline in Collombatti, 25 kms north west of Kempsey, and used a software platform to allow customers to utilise their solar PV and battery installations to bid into voltage support services for the network. Overall, the trial demonstrated a 20 per cent improvement in network voltage performance. Improving processes for Accredited Service Providers Stand Alone Power Systems (SAPS) trial Essential Energy has recognised a need to improve relationships with, and Serving customers in densely forested areas or remote rural processes for, Accredited Service Providers (individuals or companies accredited locations often comes at a cost significantly higher than the in accordance with the Electricity Supply Act and associated regulations to recovered revenue due to managing vegetation clearance undertake contestable network services) and electrical contractors, with and maintaining and renewing long powerlines to areas with consequent benefits for customers connecting to the network, including reducing low numbers of customers. Essential Energy is trialling processing times and minimising associated costs. prototype emerging technologies capable of minimising cross-subsidisation and improving reliability for customers in Commencing in October 2018, we have held: high cost to serve locations. The trial also investigates how • a total of 11 face to face engagement forums – five in the current reporting Essential Energy might replace remote end-of-life assets period – to explain our processes, clarify requirements and identify more cost effectively than traditional network solutions. operational areas that can be simplified and improved The site selected for the Stand Alone Power Systems prototype is a residence at the end • three engagement sessions with our ASP consultancy group to discuss of a 5.5 km spur located on the boundaries of the Myall Lakes National Park near Essential Energy’s new Level 1 ASP agreement Bulahdelah, an area subject to high rainfall and frequent storms. The spur to the • an ideation session with ASPs from across NSW to obtain feedback that will residence has only two customer connection points. The spur traverses a high bush fire influence our future operations. risk zone through swampy and densely vegetated national park with poor vehicle access making fault and emergency responses time-consuming and potentially dangerous. Positive feedback has been received from all forums – in particular, that Essential Energy is including the industry in improving its processes and listening to It’s worth noting that low customer density across Essential Energy’s footprint means concerns before implementing changes. Engagement will be ongoing, with further that around 80 per cent of our network supports 25 per cent of our customers. forums planned to collaboratively improve customer outcomes.

Areas for improvement Essential Energy is working to achieve an 8 per cent reduction in real network charges from 1 July 2019 to 30 June 2024, delivered by our ongoing transformation program based on strategic investment in enabling technologies and systems. We will also continue to work to meet demand for affordable alternative options for generation and distribution in a rapidly changing energy environment.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 9 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 2: We will improve energy affordability for customers Principle in action Customer outcomes Activity Evidence 2.1 Ensure that Investment Value Framework: Investment Value Framework: Investment Value Framework: investment, commercial • enables customer reliability, • implementing consistent measures for network • established in late 2017 and operational safety and bushfire risk to be investments to ensure all options are compared on a 2019-24 Regulatory determination: decisions are cost considered as part of business like for like basis and decisions reflect customer value. • Arup Australia (Australian Energy Regulator (AER) efficient, and explain decisions These apply to community bushfire risk, safety risks, technical consultant) stated: ‘we acknowledge that how customers benefit • enables customer engagement network reliability and environmental impact the portfolio optimisation, is a significant step from these decisions. feedback to be captured and Reference 2019-24 Regulatory determination consultation forward…(it) is an advanced technique and used in inform business decisions Section 1.4 conjunction with the independent top-down 2019-24 Regulatory determination: TSS: challenge renders the likelihood of materially • provides for real price • Developed an approved 2019-24 TSS inefficient investment to be low’. decreases of 1.68 per cent Network Economics tool: Final determination: Reference each year in network charges https://www.aer.gov.au/networks- • provides a level of granularity that supports decision for the next five years pipelines/determinations-access- making around how best deliver energy services to arrangements/essential-energy-determination-2019- Tariff Structure Statement (TSS): specific areas and communities, now and into the 24/final-decision • in developing its tariffs, future TSS: Essential Energy aims to • unlocks the opportunity to look at deploying Stand reduce real long-term average Alone Power Systems (SAPS) to meet the energy • customers and the AER were supportive of the final prices by promoting efficient needs of customers where it is lower cost than 2019-24 TSS network investment and maintaining a traditional ‘poles and wires solution’ • Reference utilisation Reference list of major projects and customer benefits in https://www.essentialenergy.com.au/our- Network Economics tool: Essential Energy’s 2018-19 Annual Report network/network-pricing-and-regulatory- reporting/network-pricing • enables a granular level of Reference Transformation Plan Section 4.1 understanding of the revenue Network Economics tool: and costs associated with • Is based on data-driven modelling that reconciles delivering the services that our business economics with customer expectations customers expect and engineering insight to integrate alternative energy solutions and deliver progressive energy distribution outcomes 2.2 Offer customers Network tariffs: Network tariffs: Network tariffs: energy deals that best • Essential Energy has consulted • 2019-24 tariffs have been designed to offer better • Reference tariff reform chart Principle 2 meet their needs, extensively with customers to value customer solutions Streetlighting: supported by effective design 2019-24 tariffs that Streetlighting: • Essential Energy’s streetlighting team has engaged tools and incentives for provide better value • Essential Energy has worked closely with councils to with 65 councils during the reporting period, either customers to manage • there is a general shift away give them data and tools to reduce streetlighting directly or via group representatives their energy use and from more expensive tariffs as energy consumption and reduce maintenance charges cost. • LED technology has been implemented in four customers take up these offers for public lighting council areas over this time • includes significant work on transitioning to LED technology

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 10 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 2: We will improve energy affordability for customers Principle in action Customer outcomes Activity Evidence Reference Stand Alone Power Systems (SAPS) Section 2.4 2.3 Work cooperatively Networks Renewed trial has Collaborative customer trials focused on achieving Customers engaged and knowledge shared: across the supply chain delivered: affordability outcomes including energy efficiency: • community BBQ forums held to engage the and with other • a business case for use of • Networks Renewed trial involving networks, targeted local community in the Networks Renewed stakeholders to improve behind the meter assets to aggregators and the University of Technology Sydney trial affordability over the avoid network investment and to make use of customer batteries as part of virtual • ARENA Knowledge sharing report, ‘The Business short and long term. improve energy affordability for power plants to avoid network investment and improve Case for Behind-the-Meter Inverter Control for customers energy affordability Regulating Voltage’ April 2019 Accredited Service Provider (ASP) ASP Forums: ASP Forums April / May 2019: Forums: • five engagement forums providing information to ASPs • Coffs Harbour • were aimed at addressing about Essential Energy’s processes and opportunities • Tweed Heads issues Essential Energy for ASPs to provide feedback • Tamworth identified around process SAPS: • Queanbeyan delays and poor • input into joint network pricing reforms communications • Moruya • reference Stand Alone Power Systems (SAPS) • • feedback indicated that Section 2.4 resulted in numerous compliments sent to CEO Essential Energy must: Streetlighting consultation: SAPS: − communicate better • two meetings held with Enova Energy to discuss • with Councils in our streetlighting tender processes, − respond more quickly to including inviting input into technical evaluation for potential design of tariffs for SAPS customers on 31 ASPs’ needs LED streetlights and as members of the Tender January and 7 May 2019 − resolve billing issues Review Committee for Smart Streetlighting − improve consistency in Reference Customer and Stakeholder Engagement how we work with ASPs Framework and plan Section 1.2 • have initiated collaboration with ASPs to improve work processes and save ASPs and their customers time and money Stand Alone Power Systems (SAPS): • network pricing reforms aim to achieve affordability Streetlighting consultation: • ensures direct customer involvement in tender and procurement processes 2.4 Innovate to deliver Stand Alone Power Systems SAPS trial site established in Bulahdelah: SAPS Field Trial commissioned in Bulahdelah on 18 competitive energy (SAPS): • monitoring to better understand performance, May 2018: solutions for business implications and costs, and inform appropriate

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 11 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 2: We will improve energy affordability for customers Principle in action Customer outcomes Activity Evidence and residential • are becoming an increasingly regulatory models to unlock new competitive energy • the trial customer has been impressed with the customers. viable solution to provide solutions support provided and the ease of operation of the reliable, affordable energy Network Visibility project: SAPS from a user perspective. ‘Essential Energy compared with the cost to • developed in May 2019 to determine the most cost- has been really easy to do business with . . . maintain a traditional effective blend of approaches to provide the basic Everybody is very helpful, and any issues have distribution network in high cost level of network visibility required to enable customer- been solved straight away . . . I can see stand- to serve areas led decentralisation of the energy system alone power systems being much more common. I would recommend it to others as an efficient and Network Visibility project: Reference Transformation Program Section 4.1 • will be utilised to more reliable system.’ dynamically operate the Network Visibility project: network, increasing the • defined as part of overall Network Capability available hosting capacity for Strategy DER while ensuring safety and • Corporate management support as a key pillar of reliability of the network at the our investment to maximise the value of being lowest cost connected to the grid 2.5 Advocate on behalf of Regulatory processes: Regulatory processes: Regulatory processes: customers to improve • ring-fencing waiver obtainment • Essential Energy successfully advocated for a ring- • participated in six regulatory workshops that energy affordability means that customers do not fencing waiver that provides an option for Essential included discussion around customer affordability: through engagement in have to find another Energy technicians to fix simple customer faults to − Australian Energy Market Operator (AEMO) regulatory and policy electrician/ASP and experience restore supply (eg: service fuse replacement) at no distributed energy resources (DER) register processes. power restoration delays and cost when they are already at the premises meeting on collection on 1 February 2019 extra costs • the AER has classified this work as standard control in − Australian Energy Market Commission (AEMC) • ensure customer affordability the 2019-24 final determination workshop on embedded networks on 22 top of mind when interacting in SAPS: February 2019 regulatory development • working with the Australian Energy Market − AEMC workshop on network incentives and Stand Alone Power Systems Commission (AEMC) towards a proposed rule change addressing the network expenditure bias on 6 (SAPS): to allow the use of SAPS in place of traditional March 2019 • use of SAPS in place of network solutions − Energy Networks Australia (ENA) / AEMO traditional network solutions will Smart Streetlighting program collaboration with Southern Open Energy Networks workshop on 28 March help minimise cross- Lights (41 councils in Southern NSW) and other regional 2019 subsidisation and improve councils to: − AEMC / ARENA Regulatory Distributed Energy Integration Program (DEIP) power supply reliability for • develop a business case to support smart deep dive meeting on 6 June 2019 customers in high cost to serve streetlighting locations − AER, Energy Consumers Australia (ECA) and • develop a smart streetlighting specification Smart Streetlighting program bulk ENA public forum presenting consultant • upgrade to LED luminaires is undertake market testing for smart streetlighting reports from the second phase of AusNet’s delivering benefits: Smart streetlighting development providing additional Trial of the New Reg Process on 13 June 2019 benefits including: • to Councils including energy SAPS: savings, carbon reduction, • additional savings from increased control • consulted and provided feedback to AEMC’s review lower cost for service provision • further carbon reduction of the regulatory frameworks for stand-alone power

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 12 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 2: We will improve energy affordability for customers Principle in action Customer outcomes Activity Evidence • to communities including • greater transparency by providing Council access to systems (review period 11 September 2018 – 8 increased safety and improved GIS information, inventory and maintenance history August 2019) quality of lighting • quicker response and improved quality of service • hosted senior AEMC officials at the Essential National Connection Guidelines: • flexible real time control of colour and temperature Energy SAPS prototype site on 17 January 2019 • Energy Networks Australia • inbuilt RGB+W decorative-coloured lighting for events Smart streetlighting program meetings: (ENA) has commenced a National Connection Guidelines: • in total, with representatives of around 70 of our 85 project to prepare a nationally • agreed to adopt nationally consistent connection councils via approximately 25 meetings consistent set of guidelines to guidelines for all classes of connections National Connection Guidelines: standardise the connection of • took part in workshops between December 2017 to distributed energy resources • collaboratively engaged with all distribution network December 2018 to develop guidelines, advocating (DER) into the grid, outlining service providers (DNSPs) and stakeholders through for a balance between maximum network access the technical requirements to the Energy Networks Australia (ENA) development and avoiding additional network investment facilitate streamlined integration process • supported the need for the guidelines to explicitly • Reference: reflect the National Electricity Objective (NEO) https://www.energynetworks.com.au/distributed- energy-resources-national-connection-guidelines Continuous Improvement 2.1 Review of the Value Framework to ensure its continuing to deliver effective outcome for the Principle 2.3 Begin implementation of the improvement opportunities identified through the Electric Vehicle working group July 2019 to June 2020 2.4 Combine SAPS field trial outcomes with regulatory developments to deliver phase two: Essential Energy plans a pilot in collaboration with four to six customers on the tail end of a long rural feeder. Two potential sites at Moree and Balranald are proposed where feeder performance is poor and the network is due for refurbishment in the near future. Data loggers have been installed at the connection points of each customer at both locations to obtain a consumption profile across the seasonal cycle. 2.4 Based on defined Network Visibility plan, begin implementation

Principle 3: Delivering energy Safely, sustainably and reliably

‘Our customers have told us that safety is their top priority During consultation around our Regulatory Proposal for 2019-24 and is essential for doing business. revenue and pricing, we asked customers what their priorities were. Approximately 90 per cent of participating customers agreed that safety ‘Our stated corporate objectives are: to achieve continuous is essential for doing business. improvement in safety culture and performance; operate at

Essential Energy is continuing to prioritise safety in our business plans industry best practice for efficiency, delivering best value for and has included specific activities to support this, including our Black customers; and deliver real reductions in customer network Spot program, replacing ageing cross-arms with new, storm resistant charges.’ technology and continuing our safety education programs. Mike Bowan, General Counsel & Corporate Secretary

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 13 of 29 | Head of Customer Experience [email protected] 0439 860 227

Corporate Strategy Our corporate strategy is key to ensuring that Essential Energy has a balanced direction and focus to deliver on our vision, purpose and values that reflect the demands our customers and stakeholders place on us. The four pillars of our corporate strategy work together to create an efficient organisation that delivers the services customer expect in a cost-effective manner. The three pillars to the right build on the foundation to drive delivery of value to our customers, both in the way they currently use the network, and how they are likely to utilise it in future.

At the Hasting Sustainability Showcase held at Port Macquarie Racecourse on 1 and 2 March 2019, Essential Energy displayed innovative methods to effectively and efficiently integrate renewable energy into the network and deliver lower cost solutions, such as virtual power plants, to address network constraints. Our display included: • a real size inverter, battery and smart controller and results of a joint project by the Australian Renewable Energy Agency (ARENA), Essential Energy, Reposit Power, solar inverter supplier SMA Australia and the University of Technology Sydney to assess potential for customer-owned battery storage systems to better manage electricity network demand • two Plug in Hybrid Electric Vehicles (PHEVs) as part of an electric vehicle display. Around 1,500 people attended, and Essential Energy received highly positive feedback.

Rate of small scale solar PV adoption on Essential Energy’s network Rate of small scale battery adoption on Essential Energy’s network

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 14 of 29 | Head of Customer Experience [email protected] 0439 860 227

The evolve project Essential Energy is participating in the evolve project, which aims to demonstrate a scalable operational technology that provides actionable visibility of network limits, in order to maximise the opportunity for distributed energy resources (small generation systems located on the consumer’s side of the electricity meter, such as rooftop solar, wind generators, battery storage and mini-hydro generators) to connect to the network and participate in future markets. The evolve project will develop ‘operating envelopes’ that represent the physical limits of a customer connection to the electricity system, or in other words ‘draw the lines for the footy field’ after which customers can collaborate, export and trade anywhere within a ‘field of play'. The project includes all Queensland and NSW Distribution Network Service Providers (DNSPs) in association with the Australian National University and leading energy companies, with support from AEMO, CSIRO, NSW Government, Energy Networks Australia and ARENA. Safety behaviours While the nature and severity of employee recordable injuries has decreased from FY18 to FY19, Essential Energy remains focused on improving its overall safety performance, and the following areas in particular: • High Potential Injuries (HPI): Of 39 HPI for FY19, 24 (62 per cent) were related to poor behavioural decisions by employees using light and medium rigid vehicles. • Total Recordable Injuries (TRIFR): Of 105 TRI for FY19, 47 (47 per cent) related to manual handling. On average, Essential Energy employees drive more than 40 million kilometres per annum for work. A Drive to Survive communications and awareness campaign has been developed to improve employee and community safety by minimising employee serious and near miss driving incidents. The program includes: • highlighting common causes for motor vehicle accidents • keeping safe driving front of mind. Our Safety is Defence program has undergone recent review and redirection. We will now look to implement a tiered field leadership program that promotes in-field engagement with purposeful intent and verification activities. This will be combined with elements of behavioural coaching to positively influence leadership behaviour. Overall future safety improvements will be driven by a new Health, Safety and Environment Strategy.

Areas for improvement Essential Energy will continue to work towards realising the full value of our existing network and maximising the value of being connected, investing in efficient network solutions that secure power supply safety and reliability and trialling new ways of delivering energy. In FY20, we will implement our new Health, Safety and Environment strategy.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 15 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 3: We will provide energy safely, sustainably and reliably Principle in action Customer outcomes Activity Evidence 3.1 Maintain the highest Essential Energy is committed to Drive to Survive program (on average, Essential Energy Drive to Survive program communications: standards of safety for improving our safety performance, employees drive more than 40 million km per annum for • monthly corporate newsletter their people, the standards and behaviours. A work): • monthly divisional Drive to Survive key community and the specific Health, Safety & • communications and awareness campaign developed, message reinforcement environment. Environment Strategy has been highlighting common causes for motor vehicle • Plan Every Trip with an Attacking Mindset and developed to facilitate accidents and keeping safe driving front of mind for Managing Driver Fatigue safety briefs in April improvements, and is being employees and their families 2019 implemented progressively. SiD: • Setting Your Driving Defences and Fault, Concurrently, our Occupational • workshop for coaches and key business stakeholders Emergency Driving Hazards and Micro Sleep at Health and Safety Management to develop future coaches camp material the Wheel in May 2019 System provides a health and safety • pilot SiD Coaches Camp in Ballina for 22 • Long Weekend Driving Hazards and Tips and framework for all organisational representatives from different work groups across Winter Driving Tips in June 2019 systems and activities, with a focus Essential Energy’s distribution area SiD: on continuous improvement and quality management. AODP: • workshop in February 2019 • Drive to Survive program: • During the reporting period, Essential Energy consulted pilot Coaches Camp in April 2019 on a proposal to update its existing Alcohol and Other AODP: • aims to secure community safety by minimising employee Drugs Procedure (AODP). If adopted, the updates will • more than 100 regional workshops were held include: serious and near miss driving with more than 1500 participants to educate incidents − a zero blood alcohol concentration for all employees and obtain feedback Safety is Defence (SiD): employees, contractors and agency staff at work • constructive meetings were held with the − • empowers employees to take a drug testing approach that involves maintaining Regional Health and Safety Committee and ownership of safety at an the current random saliva-swab selection program, Combined Unions, to help shape the final operational level and ‘make and introducing urine drug testing under certain position of a revised AODP safety their own’. The circumstances Ignite Wellness program: facilitators empower leaders to − self-testing facilities for employees at corporate • average attendance of 65 per cent for Modules apply their own and their offices and depots 1 and 2 teams’ experiences to improve − alignment to the organisation’s Fair and Just Policy • Module 2 delivered February – April 2019 safety outcomes while to enable flexible approaches to individual • Module 3 commenced early June and will maintaining the strengths of circumstances continue until the end of August 2019 local level ownership − enhanced education and awareness, and PESAP: Alcohol and Other Drugs Procedure individualised support options for those who seek Reference https://www.essentialenergy.com.au/- (AODP) proposed changes: assistance /media/Project/EssentialEnergy/Website/Files/Our- • will support critical risk • Phase Two consultation commenced in mid May 2019, Network/CEOP8005.pdf management and continuous concluding in mid July 2019 Blackspot assets: safety improvement Ignite Wellness program: • are identified through incident analysis Ignite Wellness program: • Module 2 – Search for Understanding focused on Environmental safety audits included: • 92 per cent of participants mental health, better understanding behaviour and responding to a survey communication, and keys to happiness. • Business Risk 6.2 Unauthorised developed or indicated that Ignite has damage to flora/ fauna or heritage inspired them to be more

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 16 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 3: We will provide energy safely, sustainably and reliably Principle in action Customer outcomes Activity Evidence focused on their health and • Module 3 – REACH (Mental Health First Response) • Network Fatal Risk 2: Exposure to hazardous wellbeing focused on improve our workforce’ ability to recognise chemicals/ materials at Essential Water, Broken Public Electrical Safety Awareness and respond to early warning signs when experiencing Hill Plan (PESAP): poor mental health in themselves and those around • Polychlorinated Biphenyls and Oil Filled • aims to raise public them Equipment Management awareness about safety PESAP: • Reference hazards associated with the • proactively delivered public safety campaigns and https://www.essentialenergy.com.au/- electricity network partnered with industry groups and regulators to /media/Project/EssentialEnergy/Website/Files/O ur- • has a targeted focus on six highlight public safety risks around the electrical Network/SafetyManagementSystemAnnualPerf ‘at-risk’ groups identified from network ormanceReport2017-18.pdf ongoing analysis of public Blackspot program: Regulatory compliance: safety incidents that result • collaboratively working with the NSW Roads and from interactions with Maritime Service to move electrical assets where they • Reference Essential Energy’s network: are the lowest cost solution to addressing public safety https://www.essentialenergy.com.au/- /media/Project/EssentialEnergy/Website/Files/O − agribusiness Environmental safety Jan - Jun 2019: ur- − aviation: recreational and • Health and Safety Management System and Network/SafetyManagementSystemAnnualPerf agricultural applications Environmental Management System external ormanceReport2017-18.pdf − building: construction and surveillance audit (a requirement to maintain 2019-24 Regulatory Proposal consultation: demolition activities, management systems certified to ISO4801 and ISO • including roadworks 140001) Reference https://www.essentialenergy.com.au/about- − • emergency services and Health Safety and Environment Audit and Assurance us/customer-and-regulatory- public authorities team completed a range of audits focused on information/regulatory-proposal organisational and operational risks − general public: renovations, DIY, Regulatory compliance:

vandalism and vehicle use • participated in regular meetings with SafeWork NSW − transport: commercial and and IPART (and other DNSPs as part of industry public transport forums) to share safety information, discuss combined Blackspot program: initiatives or improvements to reporting processes • improves public safety • engaged in monthly meetings with IPART to improve electrical network incident reporting Environmental safety: • responded to external incidents within the industry • audit results have highlighted reported by our regulators and undertook internal both positive performance and reviews of those risks within Essential Energy areas for improvement • reviewed live low voltage work following an incident Regulatory compliance: involving another DNSP • Essential Energy has met its • voluntarily notified SafeWork of 14 safety concerns regulatory reporting where public workers have been undertaking requirements, provided dangerous activities around our network information for trend and risk- based decisions for the

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 17 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 3: We will provide energy safely, sustainably and reliably Principle in action Customer outcomes Activity Evidence industry and the community, 2019-24 Regulatory Proposal consultation: and engaged with regulators • outcomes included 90 per cent of participating to improve safety more widely customers agreeing that safety was their top priority in the community Reference: Risk Management workshop with Customer 2019-24 Regulatory Proposal Advocacy Group Section 3.2 consultation: • provided clear direction that safety should be fundamental to everything Essential Energy does 3.2 Engage with 2019-24 Regulatory Proposal 2019-24 Regulatory Proposal consultation: 2019-24 Regulatory Proposal consultation: customers and the consultation: • customers said: • Reference community on • indicated support for − there is support for new energy technologies and https://www.essentialenergy.com.au/about- investments, and investment in research and investment in research and development that us/customer-and-regulatory- manage operations in development that reduces reduces infrastructure expenditure information/regulatory-proposal line with their infrastructure expenditure − the generation source can be changed provided Risk Management workshop with CAG on 7 March expectations, Risk Management workshop with reliability and price remain stable 2019: demonstrating how Customer Advocacy Group (CAG): − communities benefit. there are concerns new technology advantages may • engaged the CAG as a cross-section of the • engaged the CAG as a cross- not be available to all community to seek feedback and input into the section of the community to Risk Management workshop with CAG: formal safety assessments that underpin seek feedback and input into • engagement on formal safety assessments that make management of our operations in line with the formal safety assessments up part of the Electricity network safety management customer expectations that underpin management of system • ensured that assessments around the our operations in line with Gas and electricity industry working group: effectiveness of internal and external controls customer expectations were accurately reflected • • ensured that assessments participation to define a scope of work to better understand customer expectations around outage Gas and electricity industry working group meetings: around the effectiveness of communications • Better Together group discussion with industry internal and external controls working group on 17 April 2019 were accurately reflected • deliver an actionable process improvement plan • initial teleconference around outage Gas and electricity industry working Reference: Investment Value Framework Section 2.1 communications with Jemena on 1 May 2019 group: • initiative scoping teleconference with Jemena, • established in FY19 to deliver Ausgrid, and TransGrid on better customer experiences 20 May 2019 during outages 3.3 Develop business The evolve industry collaboration The evolve industry collaboration project: The evolve industry collaboration project comprises: strategy and manage project: • was developed in March 2019 in response to customer- • collaboration between Energy Queensland, operations to respond to • aims to demonstrate scalable led decentralisation of the electricity system, this project Ausgrid, Endeavour, all four Australian owned the shift to a cleaner operational technology that is focused on maximising opportunities for aggregators and the Australian National energy system that is provides actionable visibility of distributed energy resources (DER) to connect to the University, with support from ARENA and the already underway. network limits network and participate in future markets NSW Government

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 18 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 3: We will provide energy safely, sustainably and reliably Principle in action Customer outcomes Activity Evidence • rather than static limits on Supporting NSW Government initiatives (including Reference Stand Alone Power Systems (SAPS) using the network that exist Empowering Homes Program, Smart Batteries for Key Section 2.4 now, this project will overlay Government Buildings, Regional Community Energy, Solar Reference Networks Renewed trial Section 2.3 technology to dynamically for Low Income Households) through: Reference Strategic Direction Section 3.5 make best use of assets that • program design have already been paid for, • network data and technical considerations improving capital expenditure efficiency and associated customer outcomes NSW Government initiatives: • are designed to reduce energy costs and promote renewable energy 3.4 Work with Industry and Government Industry and Government collaboration: Industry and Government collaboration meetings: government, other collaboration aims to: • Electric Vehicle Charging Industry Working Group is • ARENA Virtual Power Plant (VPP) knowledge energy businesses, the • minimise customer range working with Electric Vehicle Charging Industry sharing on 12 February 2019 community and industry anxiety and increase transition representatives including Tesla, ChargeFox, Evie • VPP knowledge sharing on 26 February 2019 bodies to develop a to cleaner transport fuels Networks and NRMA to streamline connections for high • Energy Networks Australia OPEN Energy planned transition to a • inform development of details voltage DC charging stations across regional NSW Networks on 28 March 2019 cleaner energy system. around a number of NSW • NSW Department of Planning, Industry and Environment • CSIRO Low Voltage Taxonomy project – all Government initiatives – working in conjunction with NSW Government, Ausgrid DNSPs on 16 April 2019 designed to increase and Endeavour Energy to consult on initiatives, provide • NSW Energy program working group on 8 May investment in clean energy data, guidance and feedback to ensure alignments for 2019 technology and community stakeholders and customers • NSW DNSPs and Australian Energy Market energy Community engagement expos: Operator (AEMO) on 19 June 2019 Community engagement expos: • attending and sharing network trials and initiatives • NSW DNSP working group meets quarterly • inform the community about Reference New Way program reforming how we virtual power plants and manage major network connections Section 4.4 renewable energy Community engagement expos: • Hastings Sustainability Showcase held in Port Macquarie on 1 and 2 March 2019 3.5 Facilitate new Strategic Direction: Strategic Direction: services and • Essential Energy’s corporate strategy sets a direction • agreed by the Board that facilitating customers technologies that for the business to both ‘maximise the value of being to use the network in new ways is a core pillar support sustainable connected to the grid’ and ‘deliver energy in new ways’ of our direction energy solutions that • agreed that developing and delivering new ways meet the changing needs to delivery energy to customers is also a core of the market. pillar of our overall direction.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 19 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 3: We will provide energy safely, sustainably and reliably Principle in action Customer outcomes Activity Evidence • Both these pillars are focused on enabling new services that meet the changing needs of our customers Reference: Stand Alone Power Systems (SAPS) Section 2.4 Reference: Networks Renewed program Section 2.3 3.6 Implement solutions Network Performance program: Network Performance program includes: Network Performance program: across the supply chain: • will improve network • managing overall network performance in line with • both national and jurisdictional audited reliability a. that support energy performance in line with national and jurisdictional reliability performance targets performance reporting to demonstrate targets connection, service and customer expectations • engaging with customers on levels of performance are met reliability that meets Customer service solutions: • as part of regulatory reset process, customer customers’ needs. Customer service solutions: • engagement focused on examining trade-offs b. to resolve service new telephony messaging • Reference new telephony messaging system available to customers in terms of price and issues that impact system provides customers implemented in June 2019 Section 4.2 network performance customers and the with improved, real time, community. outage information Reference Service Now complaints management system Section 1.3 Customer service solutions: • average telephony waiting time has reduced to 25 seconds across all call types – the lowest outcome in more than four years Continuous Improvement 3.1 Implementation of the FY20 Health, Safety and Environment strategy, including continuing the contaminated land program, improving environmental for the Principle impact assessment processes and working towards an access agreement for works within reserved land under the National Parks and Wildlife Act 1974 July 2019 to June 2020 3.1 Implementation of an In Vehicle Management System (IVMS) and delivery of a driver training program 3.1 Following review of the current SiD program, future focus will on driving change through behavioural coaching 3.1 A decision to adopt the Draft Revised Alcohol and Other Drugs Procedure will be made early in Q3 2019. Should the proposed updates be adopted, the updated procedure will come into effect in Q4 2019 3,1 Develop a new Public Safety Strategy and improve the EssentialEnergy.com.au public safety web page 3.3 evolve industry collaboration is a key focus of the Network Capability Strategy over the next 12 months, key developments will be the project moving from design phase, into development phase, with the initial findings beginning to be identified and reported publicly. This will provide a transparent demonstration to customers of the opportunities to make full use of the existing network with a technology overlay. 3.4 Changes to the current fixed connection process to be more flexible in the facilitation of Electric Vehicle charging infrastructure 3.5 Continued delivery against our corporate strategic direction that will mean customers will continue to see us invest in meeting the changing needs of the energy market 3.6 In line with customer engagement feedback, business decisions will target a continuation of current network performance within both federal and jurisdictional reliability performance targets

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 20 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 4: Improving customer experience

‘Our Transformation programs are building capability and focusing on effectiveness to ‘Responding to changing customer needs shouldn’t be a stand-alone policy. It meet or exceed our financial, customer, safety and performance objectives. Delivery of should be an over-arching strategy, based on consultation and integral to these run alongside day-to-day continuous improvement programs focused on organisational decision making.’ efficiency gains.’ Luke Jenner, General Manager Customer & Network Services Rob Bridge, Transformation Director

The energy industry is evolving rapidly, with emerging innovations and technologies. Essential Energy is responding by changing its business model and network operations. Through a Strategic Transformation Plan, we will invest around $250 million in core business systems and new technology to deliver long-term efficiencies and associated cost savings of at least $84 million per annum. The plan comprises: • strengthening the core business through advanced data analytics, more efficient processes, enhanced employee capabilities and improved customer interactions • trialing new network technologies, including microgrids, stand-alone power systems and other Distributed Energy Resources (DER), remote network sensing and other innovations to improve power supply reliability and lower costs. Concurrently, we are investing in workforce sustainability and diversity through apprenticeships, asset inspection and Indigenous pre-employment traineeships, and by ensuring we have the expertise to manage our network now and as it evolves into the future through a graduate engineer training program. Over the next 18 months significant programs of work will be implemented, focusing on strengthening our core business and developing the network of the future. We aim to: • deliver a safe and reliable electricity network for customers • maintain current reliability and service standards • average 25 per cent improvement in poor performance areas • improve public safety, bushfire and biosecurity management programs We also plan to invest in: • innovative technologies to serve future customer needs • enabling technologies for sustainable business efficiencies to achieve lower distribution network charges in the future By 2024, we expect real reductions of 20 per cent real in capital expenditure and six per cent in operating expenditure compared to the 2014-19 regulatory period.

Electric Vehicle analytics Drones to improve network LiDAR technology to improve Integrating Distributed Energy Stand Alone Power Systems as alternatives inspection and maintenance network risk management Resources for high cost to serve customers

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 21 of 29 | Head of Customer Experience [email protected] 0439 860 227

Our aims:

* Both May and June 2019 saw additional matters raised compared to the previous months due to EWON seeking Essential Energy’s assistance with retail matters

Areas for improvement As part of our ongoing Transformation Plan, we plan to implement: • a Customer Experience strategy to map current and anticipated future customer experiences, identifying gaps and implementing solutions to improve our customer service delivery. • a dedicated Customer Program • an automated network connections process, delivering significant customer benefits by January 2020.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 22 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 4: We will improve the customer experience Principle in action Customer outcomes Activity Evidence 4.1 Enable customers to Transformation Plan: Transformation Plan: Transformation Plan: get fair outcomes • incorporates a dedicated • is being implemented progressively to improve • Reference regardless of their ability Customer Experience strategy business processes and increase operational and https://engage.essentialenergy.com.au/essential- or desire to participate in to ensure that Essential Energy cost efficiencies, secure workforce skills in a changing energy-transformation-program the energy market. will deliver valuable services to energy environment and maintain downward pressure Customer satisfaction: our customers and their on the network component of electricity pricing • Customer Ease survey: introduced in February 2019 communities now and into the • currently includes: for customers with escalated complaints or general future − making greater use of LiDAR to build a 3D model enquiries to tell us how easy we were to deal with. Customer satisfaction: of our network The result for the period February to June 2019 was • we expect results of our − expanding use of drones as a safe, cost effective 3.98 out of 5 Customer Ease survey and call alternative to ground-based and aerial network • call recording: introduced in May 2019 as part of recording and subsequent call inspections improving quality call coaching coaching to have positive − researching and trialling microgrids, small-scale • customer satisfaction score for June 2019 was 84.9 customer information and renewables and other new technologies to experience outcomes over the reduce infrastructure spending coming 12 months − simplifying and modernising our technology suite, eg: enterprise resource planning and asset management system replacements − improving safety leadership and overall leadership capabilities. − Reference Outage information Section 4.2 Customer satisfaction: • introduced Customer Ease Survey to understand experiences of customers who have made an enquiry, claim or complaint. These results are actively monitored for improvements • introduced call recording into our Customer Contact Centre. which is used for coaching and customer experience improvements • continued to record strong results from independent research during the reporting period Reference Customer Connected Initiative Section 1.4 Reference consultation around 2019-24 Regulatory Determination Section 1.4 Reference: evolve industry collaboration project Section 3.3 Reference Principles for Managing Voltage Variation claims in NSW and associated customer communications Section 1.5

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 23 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 4: We will improve the customer experience Principle in action Customer outcomes Activity Evidence Reference Private Asset management program Section 5.1 4.2 Empower customers Customer communications and Essential Energy uses a variety of platforms to Customer communications and marketing material: by: marketing material: communicate, update and consult with customers. These • ongoing growth in numbers of customers receiving a. making sure all • Customer Testing Workshops include: outage information via SMS, with associated communication is clear, ensure information is • proactively publishing updates on social media positive feedback from customers in plain terms, accessible accessible to and easily channels Facebook, Twitter, Instagram, YouTube and essentialenergy.com.au web site: and understandable; understood by customers LinkedIn, sharing information and responding to • was visited 1,301,903 times by 486,536 individual b. providing insightful essentialenergy.com.au web site: queries and issues users in the reporting period – up from 954,140 and useful information • is fully mobile functional, • creating project specific online forums on our visits by 342,942 individual users in Jan - June 2018 and accessible tools; making it easier for customers Essential Engagement YourSay platform and • received 55 per cent of traffic from mobile devices to obtain current information • responding promptly and appropriately to email, c. streamlining access for the reporting period, 36 per cent from desktops during power outages postal and phone correspondence from consumers to, and portability of, and 9 per cent from tablets and stakeholders customer energy data. Outage information: • new pages include: • issuing text messages to keep residents and • tailored automated telephony − Heatwaves and Power Supply about managing businesses up to date during power outages information service provides the network during times of extreme heat, lack customers with real-time, • upgrading our Essential Energy website to modernise of reserve with links through to the AEMO relevant information it and make it more user friendly and mobile website and advice on energy efficiency and • SMS outage information tool compatible staying cool Reference delivers more cost effective, • providing project briefings to key stakeholders and https://www.essentialenergy.com.au/at- relevant information to government representatives to keep stakeholders up home/heatwaves-and-power-supply customers to date with Essential Energy initiatives and consult − 2019-24 Regulatory Proposal Reference on proposed strategies https://www.essentialenergy.com.au/about- Customer communications and marketing material: us/customer-and-regulatory- • is subject to Customer Testing Workshops information/regulatory-proposal − Making a Claim For Property Or Other Damage, essentialenergy.com.au web site: clarifying steps involved and what can and can’t • web forms have been integrated with Service Now, be claimed for Reference providing greater visibility of all the times customers https://www.essentialenergy.com.au/outages- contact Essential Energy and facilitating form and-faults/making-a-claim submission processing − The Energy Charter, including The Energy • was enhanced with five new information pages Charter Explained video, the five principles of Outage information: the Charter and links to the official The Energy • available on Essential Energy’s telephony Charter website Reference information service was tailored to customers’ https://www.essentialenergy.com.au/about- addresses in June 2019 us/the-energy-charter • SMS outage information tool introduced in June Outage information: 2019 • Is available 24 / 7 by calling 13 20 80 Reference Essential Engagement Section 1.3

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 24 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 4: We will improve the customer experience Principle in action Customer outcomes Activity Evidence 4.3 Ensure that CSIRO National Low Voltage CSIRO National Low Voltage Feeder Taxonomy Study: CSIRO National Low Voltage Feeder Taxonomy Study: innovation and design in Feeder Taxonomy Study: • participating to enable a greater understanding of • CSIRO Low Voltage Taxonomy project – all products and services, • CSIRO’s National Low Voltage available network capacity for DER, enabling actions distribution network system operators met on 16 as well as Feeder Taxonomy Study aims required to deliver an improved customer connection April 2019 communication to produce the first national experience in the future • Reference: https://arena.gov.au/projects/national- platforms and tools, are low-voltage network taxonomy • Communications platforms: low-voltage-feeder-taxonomy-study/ driven by customers’ that outlines real-world • external social media: Communications platforms: needs and preferences. characteristics of the electricity − • distribution system channels achieved a 10 per cent growth of Swoop Analytics of Essential Energy’s internal followers in the reporting period compared to the social media indicates that overall Community • Depicting how low voltage previous 6 months Health Index (based on an analysis of online power flows through the system − posts received 3.6 million impressions and were community interactions, with 15 per cent considered will help with design and engaged with over 32,000 times to be a ‘healthy’ social networks community) varied assessment of technologies between 40 per cent and 47 per cent and systems to maximise • internal social media: • hosting capacity of distributed − platform Workplace by Facebook is used by internal social media: energy resources (DER employees to communicate via various groups, − achieved 3,816 posts, with 7,121 replies and • will enable users to test the connect with colleagues and build both formal 32,721 ‘likes’ value proposition of innovative and informal social networks technological solutions by Reference Smart Streetlighting Section 2.5 highlighting how they contribute Reference ASP Forums Section 2.3 to network stability, reliability and performance Communications platforms: • encourage engagement and collaboration 4.4 Have effective and Complaints resolution: Complaints resolution: Complaints resolution: accessible dispute • ongoing survey results will • survey of customers with escalated complaints or • of 72 customers responding to our survey, 63 per resolution processes, co- provide insights into complaints general enquiries introduced in February 2019 to cent felt that we had resolved their issue ordinated across the management improvement assess whether they believe we resolved their issue Energy & Water Ombudsman NSW (EWON) dispute supply chain, to resolve Energy & Water Ombudsman NSW Energy & Water Ombudsman NSW (EWON) dispute resolution: customer issues and (EWON) dispute resolution: resolution: • implement process see graph on page 27 • • improvements in reflects improvements in numbers being opened have declined New Way program: response. Essential Energy’s dispute New Way program: • initiated in September 2018 management processes • initiated to address negative customer sentiment • involved multiple customer engagement forums and New Way program: around existing network connections and targeted outreach initiatives to identify areas for • has redefined a range of streetlighting processes improvement business processes to reflect • comprised ideation workshops with internal • achieved: our agreed corporate value to stakeholders from across the business and a range of − increased reporting visibility ‘be easy to do business with’ external stakeholder representatives, including − Accredited Service Providers (ASPs), a solar business process redesign

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 25 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 4: We will improve the customer experience Principle in action Customer outcomes Activity Evidence • has improved processes, proponent, a Major Connections customer, and Port − a new contestable works design certification increased efficiencies and built Macquarie-Hastings Council as a streetlighting process pilot project aimed at providing self- a partnership approach with our customer to collaborate on service improvements service facility for ASPs customers • helped identify issues in our current processes and jointly find solutions Reference Service Now system Section 1.4 Reference ASP Forums Section 2.3 Reference Smart Streetlighting Section 2.5 Reference Aboriginal Housing Office Dubbo Solar Project Section 5.2 Continuous Improvement Empowering customers is a critical program in our Transformation Plan, ensuring that Essential Energy will continue to deliver valuable services to our for the Principle customers and community into the future. As part of this Plan, a Customer Experience strategy will map the current customer experience and what the future July 2019 to June 2020 customer experience will be, identifying gaps and implementing solutions to improve customer service delivery. Also, as part of this Plan, we will focus on strengthening our core business and developing the network of the future. 4.1 We will continue to measure Customer Ease during 2020 and identify areas to improve being easy to do business with. 4.2 Future plans for essentialenergy.com.au web site include a Media Centre with enhanced rich text media releases and downloadable video, print resolution images and official corporate material for use by media agencies; improvements to outage maps; rebuilding the Accredited Service Provider document library and Council streetlight portal; and redeveloping Careers pages. 4.4 The majority of New Way program initiatives are being incorporated into a dedicated Customer Program within Essential Energy’s Transformation Plan. We aim to automate the network connections process, utilising a SalesForce product that will deliver significant customer benefits by January 2020.

Principle 5: Supporting customers in vulnerable circumstances

Essential Energy’s Private Assets Management program was implemented from 1 June 2018 to ensure that privately owned overhead powerlines and associated assets are maintained in accordance with the Electricity 24,759 poles have been Supply (Safety & Network Management) Regulation 2014 and Essential Energy CEOP8022 Bush Fire Risk 5,313 private defect tasks classified with a private Management Plan. identified ownership Under the Electricity Supply Act 1995, Essential Energy must ensure that privately-owned network asset defect rectification works in bushfire-prone areas are completed within a total of 60 days. If customers fail to rectify a defect, there is provision for Essential Energy to isolate and disconnect sections of line if there is immediate danger Asset Inspection team have inspected and classified to life or property or an immediate risk of starting a fire, dependent on where the asset sits in relation to its bushfire ownership of 77,113 poles risk prioritisation category. To help private asset owners better understand their responsibilities, Essential Energy provides a range of information including a detailed brochure and, on its website (www.essentialenergy.com.au/privateassets), FAQs, Received evidence of 2,679 defect tasks completion for 1,396 defect common overhead power pole and powerline defects and indicative rectification costs. Dedicated Private Asset communicated with customers Management Customer Liaison Officers are available to discuss customers’ individual circumstances and assist tasks with flexible payment plans that may apply. To 30 June 2019, this support has maintained customer complaints at <1 per cent.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 26 of 29 | Head of Customer Experience [email protected] 0439 860 227

Essential Energy Customer Support Policy

Customers may be identified as being eligible for support when they are willing to meet their financial obligations for work required by Essential Energy, but do not have the capacity to do so due to a number of different factors, including: • reliance on government assistance, or Centrelink payments including the Age Pension • unemployed, low income, sudden loss of income or substantial reduction in income • suffering from a physical or mental illness, or caring for someone with an illness • living with a physical or intellectual disability, or caring for some with a disability • experiencing domestic violence • change in the make-up of the family unit • involved in legal proceedings

• death in the family

• impacted by a natural calamity such as fire, drought, flood or storm damage • the amount a customer is required to pay is greater than they can afford to pay. ‘Electricity prices are a continuing concern for households and Customers seeking assessment from Essential Energy should provide evidence of eligibility for support or businesses across NSW – particularly in the many drought- assistance, which may comprise: affected areas Essential Energy serves. Our focus on maintaining • flexible payment options downward pressure on pricing has achieved network charges that • writing off the debt today are 40 per cent lower than in 2014, and account for only • assistance with payments to third parties (such as Accredited Service Providers or electrical around 37 per cent of the average electricity bill.’ Justin Hillier, Chief Financial Officer contractors).

Principle 5: We will support customers facing vulnerable circumstances Principle in action Customer outcomes Activity Evidence 5.1 Have processes to Private Asset Management program: Reference https://www.essentialenergy.com.au/at- enable early Private Asset Management program: • flexible payment plans or other financial home/private-power-poles identification of and Includes facility for customers to apply for options may be provided for customers engagement with financial support when needed to maintain experiencing financial hardship in customers at risk of private assets accordance with Essential Energy’s vulnerability, coupled hardship policy with intervention • customers can phone 13 23 91 and ask measures that can to speak with dedicated Private Asset prevent customers Management Customer Liaison Officers falling into hardship. to discuss their individual circumstances Major emergency events: • Essential Energy works with electricity retailers to remove daily supply charges for impacted customers where appropriate during major events such as floods or bushfires

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 27 of 29 | Head of Customer Experience [email protected] 0439 860 227

Principle 5: We will support customers facing vulnerable circumstances Principle in action Customer outcomes Activity Evidence 5.2 Provide products and Essential Energy Customer Support Policy: Essential Energy Customer Support Policy: Essential Energy Customer Support Policy CECP0008.03 services that are tailored • defines support for vulnerable customers • is proactively applied when assessing • Reference http://essentialintranet/policy/Pages to customers facing Aboriginal Housing Office Dubbo Solar claims and other customer activities Aboriginal Housing Office Dubbo Solar Project: vulnerable Project: Aboriginal Housing Office Dubbo Solar circumstances and • Reference • Project: support them to get back by voluntarily matching customer NMI http://www.solarprofessionals.com.au/blog/aboriginal- • on track. data held by the distribution network with in 2019, Essential Energy has worked housing-office-dubbo-solar-project.aspx retailer billing data, Essential Energy collaboratively with the Aboriginal was able to assist the project Housing Office, the Energy and Water rollout, with an immediate positive Ombudsman NSW (EWON) and energy impact on residents’ electricity retailers to facilitate installation of solar affordability and demand management systems on more than 150 Aboriginal Housing homes in the Central West city of Dubbo and other regional areas 5.3 Provide flexible Ignite Wellness training: solutions that are easy • provides frontline staff with mental to access and are health awareness training and provided by specially conversation tools that enable them to trained frontline staff better support vulnerable customers with expertise in Reference Section 3.1 supporting those Reference Private Asset Management customers who face program Section 5.1 additional barriers to engaging with the Reference Customer Support Policy Section energy market. 5.2 5.4 Take a collaborative Representative for Energy Networks Australia Reference: approach, partnering for standard development for people in https://www.energynetworks.com.au/supporting- across the energy vulnerable circumstances vulnerable-energy-customers supply chain and with Reference Better Together industry working government and group initiatives Section 3.2 community service organisations. Continuous 5.1 Working with electricity retailers to revise the customer disconnection for non-payment process. As a service to retailers, Essential Energy is seeking to Improvement for the trial face-to-face presentation to customers of notices of intention to disconnect for non-payment. It is anticipated that this will reduce the number of Principle customers who are disconnected for non-payment. We plan to charge the retailers for this service. July 2019 to June 2020

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 28 of 29 | Head of Customer Experience [email protected] 0439 860 227

Other areas for improvement Life support National Energy Customer Framework (NECF) breaches Employee engagement and satisfaction The National Energy Customer Framework (comprising the National Energy Retail Law, the National Energy Retail Regulations and the National Energy Essential Energy measures employee engagement and satisfaction through an Employee Retail Rules) regulates the connection, supply and sale of energy to grid- Cultural Index that shows the average percentage of key cultural measures taken from connected residential and business energy customers. regular internal employee surveys. The graph below represents this over time, and includes the two most recent surveys completed by Gallup consultancy. Based on extensive research, Premises registered with life support equipment are subject to a range of Gallup groups employees into three segments: protections under the Retail Law and Rules, including: • engaged – loyal and psychologically committed • strict controls on de-energising life support customers • requirements that distributors provide notice of planned interruptions • not engaged – productive, but not psychologically connected to their company to energy supply, and • actively disengaged – psychologically absent and non-productive. • information to assist customers to prepare a plan of action in case of While recent surveys have recorded an increase in the Engagement Index, with 30 per cent an unplanned interruption. of employees engaged compared to 15 per cent in 2018, our overall Employee Cultural Index To be eligible for these protections, customers must provide their energy result remains below target by 0.6. retailer or distributor with confirmation from a registered medical practitioner Essential Energy recognises that, to improve safety outcomes, employee turnover and that a person residing at the customer’s premises requires this equipment. absenteeism, increase productivity, engage our customers and enhance collaboration, our focus should be on creating more engaged teams. Essential Energy is required to submit regular reports each year to the Australian Energy Regulator (AER) detailing all breaches of reportable The recent survey findings provide us with a baseline from which to improve how we engage, obligations. The number of life support breaches in the six-month reporting involve and inform our employees as we adapt to the business and market challenges ahead. period to 30 June 2019 was higher than previous periods, and included one in Survey insights will be discussed with teams and form the foundations for divisional and team June 2019 in which a life support customer was not provided with four business action plans. days’ notice of a planned power supply interruption. The AER has issued Essential Energy with a Notice requiring it to undertake an external compliance audit of life support provisions under the National Energy Retail Rules and National Energy Retail Law. KPMG has been engaged to undertake the external audit requested by the AER. The external audit fieldwork will commence by 23 September 2019. The final audit report will be submitted to the AER by 30 November 2019. In parallel, Essential Energy will undertake an internal audit aimed at providing a robust response to any findings from the external audit and including: • an end-to-end internal review of the current compliance process (utilising expertise from Deloitte) to identify the root causes of recent breaches, with the aim of identifying an improvement plan, and • double validation and confirmation of life support customers within the area of a planned power supply interruption. Third party access to our electricity distribution network Essential Energy has joint use arrangements and operates Facilities Access Agreements that allow third parties to install attachments on our network assets (eg: telecommunications cables on power poles). We have received feedback that we need to improve management of applications to jointly use our assets by third parties. To address this, we have established a new team dedicated to simplifying workflows and improving service, including developing a new Joint Use Standard.

Essential Energy 1 January to 30 June 2019 For enquiries contact: Belinda Kallmier Page 29 of 29 | Head of Customer Experience [email protected] 0439 860 227