Consumer Engagement report 2020 Report This communication extends to involving customers in planning for the future grid and empowering them to have more control over their energy use. INTRODUCTION
Energy networks are the connective tissue that link our customers to electricity and gas supplies.
While we are not named on bills and customers don’t pay us directly, our team members have more face to face time with customers than any other part of the industry.
When there’s an upgrade to the network, cutting back trees or repairing outages, our teams are communicating with customers and our crews are working on the ground.
Andrew Dillon We are constantly striving to innovate to not only improve the value of the CEO, Energy Networks connections we supply, but also how we communicate important information Australia to customers.
This communication extends to involving customers in planning for the future grid and empowering them to have more control over their energy use.
The future grid will mean connecting record levels of solar and other renewables into areas of the network not originally designed for two-way electricity flows.
Blending of hydrogen into gas networks will mean more clean energy options for customers.
Electricity and gas networks are the platforms enabling Australia’s low-emissions energy transition, while keeping supplies safe, reliable and affordable.
The evolving, smarter grid will offer cheaper power prices at different times of the day to allow customers to use technology to save on their electricity bills.
Critical to this process will be ensuring networks and customers continue to communicate, which is why Energy Networks Australia (ENA) has partnered with Energy Consumers Australia (ECA) to compile this report.
The 2019 Energy Networks Consumer Engagement Award was presented to Jemena by then ECA CEO Rosemary Sinclair, in recognition of the gas networks deliberative forum in NSW and its electricity network people’s panel in Victoria.
Jemena was chosen by a panel of judges comprising consumer advocates, non-network industry professionals and representatives from the Australian Energy Regulator and the Australian Energy Market Commission.
This process highlights the value networks place on customer input and how organisations like ECA reward innovation in the customer engagement space.
1 CONTENTS
JUDGES REPORT 3
Ausgrid: Revised Regulatory Proposal Engagement 10 – delivering long term customer outcomes
AusNet Services: GoodGrid Residential Demand Management Program 13
Energy Queensland: Electricity and water don’t mix 16 – the Townsville Monsoon Event
Horizon Power: Solar Incentive Scheme 19
Jemena Gas Networks: 2020-25 regulatory proposal 22
Jemena Electricity Networks: People’s Panel 27
Powerlink: Revenue Determination Process Engagement 31 Co-Design Workshop
SA Power Networks: Setting tariffs that will help in transitioning 35 to a new energy future
TasNetworks: emPOWERing You Trial 42
Western Power: Perenjori BESS customer and stakeholder 45 engagement project
2 JUDGES REPORT
“They provided If you meet consumers where they are; if you create an environment where they are comfortable to express their values and the outcomes that are 25 recommendations, important to them in their own words; you will get the most extraordinary 13 directly related and nuanced feedback. to Jemena’s pricing The quality of applications continues to improve in the third year of the and services; our Award as we considered the 10 applications from nine networks across six customers became Australian states. decision-makers.” The Award allows electricity and gas network businesses to showcase the Jemena Electricity Networks’ results of their innovative and genuine approaches to consumer engagement. Award submission. While the standard of engagement varies across network businesses, emerging in this year’s group of applications are clear signs that a cohort of network businesses are now moving away from introductory engagement involving information and education campaigns, to more dynamic conversations where consumers have a valued say in network projects.
For this to happen, network businesses from the CEO to the employees on the front line are engaging with consumers and taking risks that are delivering better consumer outcomes.
Real, authentic and effective consumer engagement connects companies through the diverse interests of consumers and the community.
Through this Award, we want to recognise those businesses that can see and are acting on the value of genuine and authentic engagement with consumers.
We congratulate the industry leaders who are continuing to push the frontier forward on consumer engagement.
3 The New Frontier feedback on this year’s applications
In the 2018 Judges’ Report, we said that we wanted Joint winners for 2019: Jemena Electricity Networks to see 2019 engagement projects that: and Jemena Gas Networks
» demonstrated consumer values embedded in key Jemena won the ENA/ECA Energy Network business documents; Consumer Engagement Award for its Gas Networks » showed evidence of material changes in Deliberative Forum in New South Wales and its the business stemming from the consumer Electricity Network People’s Panel in Victoria. engagement activity; » provided clear examples of impact and outcomes Together, Jemena won the Award for these from consumer engagement; engagement processes because: » demonstrated “The Benefit Equation” – what is » it met consumers where they are – tailoring the demonstrated benefit to consumers from the engagement to them, ensuring that translators engagement? were on hand, childcare was available, and transport was provided to ensure that no one was undertook consumer engagement, even when it » left out of the conversation; wasn’t prescribed or required; » with the support of the Board and its CEO, it saw network businesses designing and » engaged in this conversation in an authentic and implementing solutions as seen through the respectful way; and consumer lens; and » it was ambitious about the conversation it wanted demonstrated network businesses leading, guiding » to have with its customers. and mentoring other networks based on their own learning and experiences. The finalists We saw that consumer engagement in 2019 included many of these elements in the context of: In addition to the Jemena applications, the » regulatory proposals; Horizon Power, SA Power Networks and Powerlink applications were shortlisted as finalists. We explore » technical projects including trials and innovative why below: solutions for individual communities; » Horizon Power: for its Solar Incentives Scheme, » crisis event management; and Horizon Power worked with eight Aboriginal » tariff design. communities as partners in change. Together, over 12 months, they co-designed a program that addressed community concerns to deliver cleaner and more affordable energy. » SA Power Networks: for its community engagement on its tariff structure statement as it worked together with consumers to create tariffs that work for households and businesses in a new normal, transition to a new energy future. » Powerlink: which “handed over the keys to the car” to consumer advocates to build an engagement process for its 2023-27 revenue determination. Powerlink was clear-eyed about risks: expectations that can’t be met; the resourcing needed for front-ended engagement; and having less control around a critical business initiative.
4 Highlighting the positives from across the “Handing over the keys to the car” applications Some network businesses took risks this year by The applications demonstrate that consumer engaging with consumers in novel ways. The best engagement is an activity that can be undertaken processes put consumers in the driver seat from the for many different types of network projects. The beginning, allow them to have a say about ‘how’ the applications that stand out are those that clearly engagement would run, how investment strategies outline the ‘why’, ‘what’ and ‘how’: were designed, and how community energy solutions » ‘why’ did the business engage with consumers and could be developed. for what purpose? These are risks that paid off and resulted in » ‘what’ were the key issues that they sought to agreement, understanding, trust and a way forward. explore? For the sector, these examples have debunked the » ‘how’ did they engage, outlining the risk-myth associated with dynamic engagement. methodologies and approaches?
The value of consumer engagement embedded in Meeting consumers where they are the business
Some of the applications this year demonstrated We are encouraged to see examples of businesses the importance of meeting consumers where they that have responded to consumer engagement are. This means representatives from the network through structural and cultural change. businesses taking the time to go to consumers in their communities rather than bringing consumers to them. Businesses have created new executive roles aimed at This approach makes it easier for a wider range of ensuring the business strategy is customer focused, consumers to participate and places a high value on a number have joined The Energy Charter and consumers’ time and convenience. consumer outcomes are being considered by some Boards on a routine basis. Some network businesses went further to maximise accessibility and inclusiveness and break-down barriers to real and meaningful dialogue. This included providing transport, interpreters, childcare assistance, independent experts and other resourcing that would have otherwise been inaccessible by the community.
5 Future focus: 2020 awards
The consumer engagement awards are a great The network businesses which make submissions marker of the progress the sector is making in its to the Award are at the forefront of best practice in relationship with energy consumers. consumer engagement. The best submissions, which include references such as “handing over the keys to The first big engagement task was to move away customers”, are heading in the right direction. from an adversarial engagement model that was not working for consumers and to course-correct on In 2020, we would like to see: costs. The applicants for the 2019 Award demonstrate » more network businesses proudly sharing their that we have come a long way to achieving these successful consumer engagement stories through objectives. the Award process;
The new focus on alignment has seen network » all network businesses moving beyond ‘inform’ and ‘educate’ to ‘partnership’ and ‘co-design’, building businesses work directly with consumers to on the examples from prior years’ applications; produce proposals that are capable of acceptance by consumer groups and the Australian Energy » the development of a sector-wide culture that Regulator, building trust to help secure better values leadership and sharing of consumer engagement experiences so that all businesses outcomes. move forward as the frontier moves forward; and The next big consumer engagement task is the » innovation in consumer engagement that supports energy transition. continuous improvement.
It is difficult to overstate the nature of the changes The consumer engagement awards in the “here and that are happening in the way the electricity system is now” can be seen as a bellwether of the capacity of organised and the way energy consumers power their energy network businesses, in particular electricity home and their small businesses. The mass-migration network businesses, to embrace and help drive the of more than two million households into the world of energy revolution which is taking place, right now, in not just buying electricity but generating it – driven partnership with consumers. by affordability and emerging new technology – has fundamentally changed the operating environment for network businesses. A system that was once centralised and ‘one-way’ (‘a small number of large things’), is increasingly decentralised and two-way (‘a large number of small things’).
The future success of energy network businesses depends on their ability to provide valued services in this new, more dynamic environment. And this will be built on a clear understanding of the different needs, preferences and priorities of energy consumers and communities more generally. That is, genuinely engaging to find out what consumers want, not what network businesses think they want.
6 Behind the Panel – about the judges
Rosemary Sinclair AM (Chair) Mark Henley Craig Memery Former CEO, Energy Consumers Advocacy, Uniting Policy Team Leader, Energy + Australia Communities Energy Advocate, Water Consumers’ Advocacy Uniting Care Australia and Program, Public Interest Rosemary Sinclair was the CEO member of the AER’s Consumer Advocacy Centre of Energy Consumers Australia, a Challenge Panels company established by the Council Since joining the energy sector of Australian Governments Energy Mark Henley is an economist and in 2002, Craig has managed Council of Ministers in 2015 to is currently employed by Uniting demand- and supply-side energy strengthen independent consumer Communities as Manager of projects; provided economic, advocacy on national energy market Advocacy and Communication technical and policy advice matters of strategic importance and and splits his time with being a to government, community material consequence for energy member of the Australian Energy and private sectors; sat on consumers, in particular household Regulator’s Consumer Challenge numerous advisory panels and and small business consumers. Panel. He is an inaugural member representative groups; designed of the national small energy and delivered training programs; ECA focuses on the long-term consumers Roundtable and sits engaged with consumers and interests of consumers of energy on a number of Utility focused communities across Australia; with respect to the price, quality, consumer reference groups. and provided thought leadership safety, reliability and security of on existing and emerging supply of energy services. Mark has worked in community challenges for the sector. services for 40 years, is a Life Rosemary is a Director of CPA Member of SACOSS and was the Craig has represented energy Australia and a recent past Member inaugural President of YACSA, users for the last decade, and (part-time) of the Australian the Youth Affairs Council of now leads the Energy and Communications and Media South Australia and he has been Water Consumer Advocacy Authority. a member of the ACOSS Board Program (EWCAP) at the Public and a Vice President of the Youth Rosemary has many years of Interest Advocacy Centre. Affairs Council of Australia. senior large-scale operations, EWCAP promotes access to affordable, sustainable energy communications and strategy Mark is concerned about issues and water for NSW households, experience in business associated with poverty and through improvements in and government across addressing disadvantage which policy, regulation, markets telecommunications, media and has meant that he has been and supporting measures for education. actively working on energy people facing hardship and affordability issues over recent Rosemary has held a number of disadvantage. years as well as taxation, Directorships on unlisted company gambling, housing and labour and not-for-profit Boards, both markets. Australia and international. Mark is the Past President of the Rosemary received the Order of SA Branch of the Economics Australia Award in the 2018 Queen’s Society of Australia and is a birthday Honours List. passionate Adelaide Crows Rosemary has degrees in Arts, supporter. Law and Business and a Masters of Commerce from UNSW. Rosemary is a qualified CPA and Fellow of the Australian Institute of Company Directors.
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John Devereaux Robyn Robinson Jim (James) Cox Affiliate Consultant, Goanna Director, Council on the Aging Board Member, AER Energy Consulting Queensland Jim has held positions with the John has extensive experience Robyn held executive and Reserve Bank of Australia, the in both the energy and banking senior management positions Department of Prime Minister industries in an executive career within the electricity industry in and Cabinet and the Social spanning over 35 years. He has Queensland for over 20 years. Welfare Policy Secretariat of the particular interests in advocating She has an extensive background Department of Social Security. on behalf of energy consumers in IT management, business He was a Principal Economist and the application of new performance improvement and at the Office of EPAC between technology in the energy industry. managing organisational change. 1986 and 1989, and between 1989 Robyn combines her knowledge and 1992 was a consultant to the John’s roles in the energy industry and experience in the energy New South Wales Cabinet Office. have included those of General industry in Australia with her Jim was Principal Adviser to the Manager Strategy and Corporate involvement in a number of Government Pricing Tribunal of Affairs with Power and Water organisations concerned with the New South Wales from 1992 and (NT), Acting CEO of the Energy rights and needs of seniors in the was a Member of the Tribunal Networks Association of Australia, community to take on an active since January 1996. He was Acting General Manager Networks with role as an advocate for senior Chairman of the Independent Aurora Energy, and Chief Financial energy consumers. In 2013, Robyn Pricing and Regulatory Tribunal Officer with Aurora Energy. He was appointed as an inaugural (IPART) during 2004, 2009/10 and joined Goanna Energy Consulting member of the Australian Energy 2011 and a visiting fellow at Monash as an Affiliate Consultant in 2013 Regulator’s Consumer Challenge University during 1985. Panel and was re-appointed to the John also held the roles of Chief Jim assisted the New Zealand panel for a second term in 2016. Financial Officer and Chief Government with social policy Robyn is currently a member of Information Officer in banking changes during the early part of the Board of two not-for-profit institutions based in Tasmania and 1991 and has written extensively on organisations concerned with has extensive project and program economic and social policy issues. the well-being of seniors in the management experience, including This work has been published, community. the roles of Program Manager for among others, by the New Zealand the disaggregation of the former Robyn has qualifications in science Business Roundtable and the Hydro Electric Corporation, and and IT and holds a Master of Centre for Independent Studies. numerous large scale IT projects. Science Degree in Operations He was awarded the Public Service Research. She is a Graduate of the John has a particular interest in Medal in the Australia Day honours Australian Institute of Company the development and application list in 2011 for outstanding public Directors. of new technology in electricity service to IPART. transmission and distribution and was a founding member of the Jim was supported by colleague, Energy Network Association’s Philip Cullum. Smart Grid Committee and conceived the world patented safety device – Cable PI/Wire Alert.
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Anne Pearson Gavin Dufty Former Chief Executive, Senior Executive / Australian Energy Market Policy and Research Manager, Commission St Vincent de Paul Society Victoria Anne served as the Chief Executive of the AEMC from Gavin has been a consumer February 2016 to October representative in the 2019, contributing outstanding energy sector for over 25 organisational leadership years. During this time, he has capabilities, and a breadth undertaken research on electricity of industry and regulatory disconnections; documented experience to the role. Prior to her changes in energy pricing and appointment to Chief Executive its impacts on households; and she served as Senior Director, been involved in the development Market Development, where she of state and federal energy was responsible for directing consumer protection and reviews and rule determinations concession frameworks. Gavin to facilitate the energy sector’s is currently a representative adjustment to technological of a number of industry and change and manage emerging government committees including: concerns about energy security gas and electricity distribution and consumer responses in a companies customer consultative carbon-sensitive world. Before committees; the Australian Energy joining the Commission in 2007, Market Commission’s reliability Anne’s roles included Executive panel; AGL’s national customer Manager of Retail Regulation at council; the AER’s customer Energy Australia and corporate consultative group; and Energy mergers and acquisitions at law Consumers Australia reference firms Freehills and Deacons. She committee. holds a Bachelor of Arts and a Bachelor of Law with Honours from the University of Sydney.
Anne was supported by colleague, Anthony Bell.
9 Revised Regulatory Proposal Engagement – delivering long term customer outcomes
Project timeline November 2018 to May 2019 Description
Location Ausgrid’s new customer stakeholder engagement strategy was The Ausgrid service area developed to actively incorporate customer views in the preparation includes some of Sydney’s of our Revised Regulatory Proposal 2019-24 and to ensure that we most densely populated better integrate customer preferences in our business decisions. suburbs, as well as the fastest growing regions of NSW from The engagement strategy incorporated close and regular consultation Waterfall in Sydney’s south to with members of the Customer Consultative Committee (CCC) and the Auburn in Western Sydney to Australian Energy Regulator (AER) to identify, respond to and resolve the upper Hunter Valley. questions about our spending plans. We also established engagement principles and collaboratively drafted 13 clear customer commitments that we will deliver and transparently measure.
Benefits to consumers
Through our collaboration with customers, we significantly changed our plans and submitted our revised proposal that was supported by customers and was ultimately accepted by the AER. Our revised proposal resulted in a $71 network saving for the average residential customer from 1 July 2019. This saving was achieved in part through our agreed $300m reduction in proposed capex and 1 per cent opex productivity savings.
With the Pricing Working Group (PWG) we co-created fundamental change in our tariff strategy with the introduction of a new demand tariff that will deliver long term customer savings. We co-created a list of commitments to deliver and measure ourselves against and have embedded customer voices into our decisions with the creation of new committees.
The Network Innovation Advisory Committee (NIAC) and the Technical Review Committee (TRC), will drive the direction of our innovation program and ensure that optionality is taken into account in future investment decisions. Our aim throughout this project was to allow us to improve our decision making and earn the right to deliver services to our customers.
10 Approach
At Ausgrid we recognise we are better when we have a diversity of views included in our decision making. Members of Ausgrid’s customer advocate committee were selected to provide customer perspectives and experiences from a cross-section of the NSW community. Importantly, they were selected for their experience and their passion to help improve our business.
Ausgrid developed engagement principles to support honest and transparent collaboration, build trust and improve our decision making. » Be collaborative: Don’t be defensive and remain open to possibilities » Be quantitative: Provide data from the perspective of the consumer » Be accountable: Agree a timeframe and deliver » Be transparent: Ask for regular feedback, understand what is required Benefits, results and outcomes » Be adaptable: Be prepared to change based on feedback Benefits: Reframing our engagement principles and closer collaboration with customer advocates has Customers endorsed the engagement principles led to significantly increased customer input into which were developed in consultation with Ausgrid’s planning and decision-making, resulting in board, executive and management. Ausgrid has valuable outcomes for consumers: since undertaken a company-wide rethink of our customer relationships to change the way we listen, A decrease in network charges for customers collaborate and practice engagement across the business. This will drive cultural change through Our initial Regulatory Proposal in April 2018 included our business. a 6 per cent decrease in customer network charges. Following further engagement and a robust review In November 2018 we hosted a Network of the of capex and opex programs with the CCC, Ausgrid Future Forum where participants created the delivered a network charge decrease of 11 per cent principles that will guide our innovation investment in our Revised Proposal. This is a saving of $71 per decisions. Through the NIAC and TRC, customers’ annum on average for a residential customer without views will be central to our decision making. If we compromising safety or reliability. Approximately a are serious about shaping the future of energy, we third of the reductions were due to decisions resulting cannot make important long-term decisions about from customer engagement, including the inclusion these challenges alone. of an opex productivity forecast and reductions in our proposed capex. We recognise that in the past our engagement was poor, we didn’t effectively give our customers A revised pricing strategy a voice or respond to differing views. We now Through collaboration and compromise, our understand how much advocates have to offer. We » customers helped Ausgrid build consensus for are collaborating not because we must, but because the need and direction of tariff reform. This we recognise that it is good business sense. Our will support a fairer, more affordable and more new approach represents Ausgrid’s new direction sustainable energy supply system. in truly collaborating, listening and then addressing key customer concerns. Collaborative decision making » Our customer commitments are being embedded across the business to support authentic and collaborative customer input into shaping business decisions.
11 Through the Network Innovation Advisory Committee, The Ausgrid Board and CEO have agreed to changes customers will drive our $42 million innovation in our business structure, bringing together strategy, program and ensure customer views are central to regulation, corporate affairs and customer divisions decisions as we transform our network. It will hold under the leadership of a Chief Customer Officer Ausgrid accountable for incorporating customer (CCO) reporting to the CEO. The CCO will ensure perspectives and articulating customer benefits in the voices of our customers are heard in all our key program design, network planning and program business decisions and champion customer outcomes. implementation. The new strategic focus ‘Fostering Community Our new Technology Review Committee will provide Trust’ has been added to our business strategy, a forum to improve transparency of ICT expenditure with the support of the board, to clearly embed our and cyber investments, as well as consider the commitment to customers. Ausgrid’s Board and role of optionality in our business cases to support executive have determined that annual RepTrak® investment decisions. stakeholder and community engagement scores should be used to assess business performance. Learnings and changes The delivery of 13 customer commitments, including Working with customers, we can build trust and activities of the NIAC, TRC and PWG are reported develop better outcomes than if we had done so and discussed at monthly executive leadership team alone. For example, we: meetings. Our CEO chairs the CCC meeting and is » co-developed innovation principles to guide our candid about the issues we are grappling with, eg.the innovation investment decisions. cultural change required to improve our safety culture » collaborated on a policy submission to the AER’s after the death of a worker. Other committees have IT review. This was the first time we adopted an executive chair and committee members have this approach, which was very well received by direct access to influence the approaches of high level members of our CCC. senior staff from across the business.
We have commenced a review of investment decision This will build a stronger shared understanding of frameworks to articulate and consider customer value. business and customer needs and deliver outcomes more reflective of customer views. Eg. we will jointly develop policy submissions, collaborate on innovation Leadership and transferability projects, and jointly identify the need for policy change. The key learning from this process was that in order to be a better business we need to better understand We recognise that adopting a customer-centric focus our customers and this needs to be business as usual. across the business makes good business sense and We have implemented structural and cultural reforms we are making this real. Sharing the learnings from to ensure this. our new committees can contribute to enhancing customer engagement across the energy sector.
12 GoodGrid Residential Demand Management Program
Project Partners For the GoodGrid Program, Project description AusNet Services partnered with the following entities The GoodGrid Program is a residential behavioural demand response to assist in marketing program with the aim of addressing reliability issues in the AusNet the program, recruiting Services network. participants and to complete broad energy education The program offers financial incentives to participants who can reduce campaigns: their power usage on hot days when the network is constrained. AusNet Services recruited 1,000 participants from high growth Royal Automobile Club of » demand corridors in our network and the program ran ten four-hour Victoria (RACV) events over the summer period. AusNet Services advised participants » Schools: Berwick Chase on the day before, and the day of the event, and participants who Primary School, Mernda voluntarily reduced their energy below their baseline received a $15 Park Primary School, reward for each successful event. Jindivick Primary School, St Joseph’s Catholic Primary School, Mernda » Councils: Baw Baw Shire Benefits to consumers Council At its heart, demand side management is about valuing consumers in the Project timeline energy system and supporting them to manage their energy in smarter ways September 2018 to May 2019 that benefit them, the energy system and the community as a whole.
Project location The GoodGrid Program aimed to: The GoodGrid program » encourage households to learn about and practise how to manage their energy use operated in three high growth corridors in the AusNet » help keep the lights on in the local community at times of peak energy Services network: demand » Northern suburbs of » keep the pressure off energy bills Melbourne (Mernda, » reward consumer behaviour that helps maintain the local electricity grid. Doreen, South Morang) » South Eastern suburbs of GoodGrid’s underlying value is twofold: consumers were encouraged to learn Melbourne (Narre Warren, ways they can manage their electricity use for their benefit, and also for Berwick, Cranbourne, the benefit of the community during times of constraint. At the same time, Clyde and surrounds) AusNet Services is learning invaluable lessons on how consumers participate, » Gippsland (Drouin, what is important to them, and how to communicate with consumers to help Longwarry, Bunyip, the grid and the environment. Garfield and surrounds)
13 Approach Benefits, results and outcomes
The GoodGrid program’s engagement approach The GoodGrid program provided an opportunity to was multi-faceted with various strategies to recruit explore reward and incentive schemes to recognise participants into the program and ongoing initiatives consumer participation and encourage ongoing to ensure consumer retention throughout the change in energy use. From our survey results, event program. Direct channels for recruitment involved analytics and consumer feedback, the program was electronic mail to AusNet Services’ customers who a real success, with participants committed to the had enrolled in previous energy campaigns. AusNet program’s goals. There was a consistently high rate Services trialled geotargeted Facebook campaigns of successful participation, with 75 per cent earning to advertise the program and promote participation, rewards across all events. along with localised letterbox drops. The GoodGrid program was advertised in local press with strong The program was an interactive experience with visual marketing, as well as in flyers and posters their distribution network service provider (DNSP), distributed in local schools and through councils. An which was a first for the majority of the participants. internal AusNet Services’ employee, ‘Refer a Friend’ Consumers learnt about the role of the DNSP, demand initiative was used to promote the program and versus generation and the management of the engage with our employee base. electricity network on high demand days when assets may be under constraint. Indirect channels included partnering with local schools; GoodGrid provided a mechanism for During the first couple of events, we found that participants to donate their earned rewards to a some households were able to substantially limit participating school. Several of the schools used the their demand, whilst others made great effort but program to teach their students about energy usage, with limited effect. This allowed us to demonstrate the network and decarbonisation. that different appliances used varying amounts of power and share knowledge on potential ways to AusNet Services aligned with the RACV, a trusted reduce load against baseline. Through the program, Australian brand, to message their members. All participants adapted their behaviour and energy participants who registered for GoodGrid gained an use during events to secure themselves a reward entry into a prize draw for a $1,000 RACV Resorts for successful participation. During the final survey voucher. consumers stated that they had learnt new skills that they would apply to their ongoing energy use to Pre and post event communications were sent out to reduce electricity bills. consumers and throughout the program we adapted our communication style based on participant feedback. We found that consumers preferred a more informal approach that engendered the idea of a collective community. A post event newsletter presented regional event analytics, discussed tips and tricks and provided channels for feedback. The program ran several competitions that encouraged energy education - participants could win prizes by submitting tips and tricks or telling us about their GoodGrid experience. The program held both a mid- point and final survey.
AusNet Services also ran a broad network resilience messaging campaign across our entire network called ‘Power Prepared’ to provide network reliability and energy education; in GoodGrid areas we ensured consistent messaging.
14 The learnings from the project were that, while financial rewards are a fantastic incentive for consumer registration, ongoing gamification is required to motivate and ensure participation in successive events. The sign up process has to be as easy as practicable for consumers to register and that multiple electronic direct mail is required to trigger consumer registration. From this project, we have become aware that program participants want greater awareness of their electricity use, especially during events, so that they can understand their performance. AusNet Services are investigating the possibility of providing near real time data to GoodGrid participants. Consumers would like to understand their baseline and want post event analytics on their performance and how it measured against other participants.
Consumers would also appreciate faster updates on whether their event participation was successful or not, with customer friendly access to rewards, such as digital gift vouchers. For the next program iteration AusNet Services are investigating incorporating greater gamification and community comparisons allowing for different geographic and demographic segmentation. AusNet Services has commenced an initiative to deploy customer-centric language across our website and other media, to increase our continuing focus on the consumer. Leadership and transferability
The key learning for AusNet Services from the GoodGrid program is that when we engage with participants in demand response programs, their To this end we are embedding a Customer experience needs to be understood within the full Experience team within the business who are context of their lives and the way they consume mapping customer journeys across the business, energy. Consumers are the reason we exist, if we commencing with Distributed Energy Resources did not have regulated or commercial customers we (DER) connections and Gas connections. We are would not be here today. Our customers’ expectations also building capability in DER, innovation, analytics are evolving and we need to understand them to and automation. remain relevant. Customer centricity has become a key part of our strategy; it is an enabler for growth For the GoodGrid program, our leadership team and cost efficiency, as positive customer experiences were intrinsically involved, through promoting the build our social licence to operate and improved campaign and registration in the media, and on the customer processes are more cost effective. ground with the community presenting awards and explaining the role of AusNet Services in the energy Many trends in our industry are focused on enabling value chain. customer choice and control when it comes to energy. Globally there has been a rapid increase Project timeline in the number of businesses offering distributed solar and battery solutions and it is forecast that 1 September 2018 to 30 May 2019: 45 per cent of Australia’s energy needs will be » Program participant recruitment period: 1 sourced from distributed power by 2032. Within the September 2018 - 1 December 2018 (note that regulated business, we are embedding our ‘Energising recruitment continued until late January 2019) Futures’ strategy that has Digital Grid, Future Ready » Demand response event period - 1 December capabilities and Customer as three of its pillars. 2018 - 30 March 2019 AusNet Services is transforming the way we interact Program closeout, including participant payment with customers and we want to ensure that we » and surveys: 1 April 2010 – 30 May 2019 understand our customer’s requirements and our low voltage network.
15 Electricity and water don’t mix – the Townsville Monsoon Event
Project partners » Ergon Energy Network Description » Ergon Energy Retail In early 2019, North Queensland experienced an unprecedented » Energex monsoon flood event. Townsville received more than a metre of » Powerlink rainfall in seven days, rivers hit record peaks and Ross River Dam reached 245 per cent capacity – forcing the release of water to Project timeline already flooded suburbs. January - February 2019 Our challenge lay in managing community safety, and expectations Location around getting the power back on, while working as part of the wider Townsville and surrounding emergency response in restoring power. regions and towns, North We have extensive experience in disaster response, but every event Queensland is different. Our engagement strategy – an integrated stakeholder/ media/outreach response – required reviewing the situation, our stakeholders, the communication channels, our resourcing and the logistics.
Benefits to consumers
Electricity and water are a dangerous mix and this disaster had the potential to become an electrical tragedy. However, by the time the floodgates opened, we had proactively deenergised 17,000 homes and businesses and launched a communication blitz to let the community know what was happening, why, and how to stay safe. Innovations in our engagement around the proactive de-energisation paid off, contributing to a fatality free event.
As well as keeping our communities safe, customers benefitted from the release of our ambitious restoration plan, containing street by street details of when power would be restored, bringing certainty to those who were able to safely return to their houses.
Our engagement efforts undoubtedly improved our response. Engaging through the different disaster management forums, with other stakeholders and customers with specific needs, enabled a coordinated response where issues are addressed quickly.
16 Approach
Through an integrated stakeholder/media/outreach engagement approach we aimed to: » Proactively and transparently communicate from a ‘single source of the truth’. » Establish ourselves with a ‘human face’ and part of the community. » Demonstrate ‘safety first’ messaging for customer/stakeholders/employees.
The audiences and channels included: » Impacted customers: 21,000 homes/businesses without power, ‘desperate’ for information. Our post-event research showed high engagement through our website, Facebook, signage, community outreach, the media and secondary sources. We actively promoted our online tool ‘Outage Finder’ to stay up-to-date during the event. » Media and broader community: the event received local, state and national interest – with online, press, radio and television media coverage. » Government and emergency services: we actively briefed our shareholders, Government Ministers and portfolio department and engaged with local government and emergency services stakeholders through established forums. » Industry Partners: electrical contractors, unions and other parties worked alongside us in the restoration. » Employees: Many crews found themselves engaging with the community as part of Benefits, results and outcomes the restoration – it was vital that they were informed and sensitive to the needs of the A high level of professionalism in our communications community. and engagement during these types of events is critical to our brand and reputation. Each time, our As well as using traditional channels, we added response is delivered in an environment of increasing these innovations community expectations. The risks are high, but the » Social media was central to our approach rewards are there too. – allowing us to express empathy for those impacted – as our primary audience – and give During the crisis, there were 575,000 visits to our our supporters a voice. We shared the “thanks” website and our online Outage Finder tool was used from those who had endured the experience. around 165,000 times. We monitored emerging issues to guide the work program. An absolute standout of the engagement campaign » Acknowledgements - we started reading was the level of community sentiment expressed messages of thanks to the crews at the morning through Facebook – an exceedingly positive result of muster – helping them with their mindset in the 93 per cent. We actively monitored our social media field – and providing key external messaging to profile and tweaked our efforts during the event. support those undertaking general operational engagement. Post event analysis, usage statistics and anecdotal » Technology assisted our communications. feedback, provided further valuable lessons – to With experience using our advanced spatial continually test ‘what works’ and be brave. mapping capability in a previous flood, we were able to anticipate flood levels and proactively We reacted quickly to set up a community outreach engage on a safer response – literally walking program in the worst impacted communities, we the streets – before de-energising in the areas distributed power updates specific to the area at risk. describing the damage, where to go for help with other agencies, as well as restoration information.
17 Small teams used a mobile ‘trailer’ from various public Leadership and transferability locations. Our retail arm had teams at the community recovery centres and individual employees engaged Key learning - We document lessons following events proactively with businesses and community leaders. to refine our engagement approach. During this event, we implemented new approaches in social media These efforts were innovative. We are now formalising (including digital live streaming) and community this capability with improvements (including field outreach. Our in-house engagement team develop connectivity to our internal data systems – to better and test these innovations – which are now part of handle individual enquiries – and also looking to our capability. partner more effectively with other service providers). Leadership/culture – Senior leaders were highly visible Analysis of media reporting showed it is now and active in the engagement, with many available dominated by online news outlets – reflecting the 24/7 as spokespeople. They were accessible to those changing media profile generally. Future responses involved, touring control centres, engaging field crew will consider this as the traditional media outlets and debriefings and emphasising the importance of good online conversations continue to merge. community sentiment. We maintained a leadership presence at Kedron, the In a post event survey we asked how we can do State Disaster Coordination Group, and with Local better. It showed we achieved strong cut through with Disaster Management Group, Queensland Police, and our messaging – 72 per cent recalled the messaging the State Emergency Services. We reflected this around the process for connection for premises that operating model in our own operations. had been flooded and 66 per cent recalled our key powerline safety messages. Engagement for us comes in many forms, from our response framework to field crews going above and www.talkingenergy.com.au/disasters beyond to help impacted customers.
Engagement practice in our organisation – Internal communication and engagement professionals were dedicated during the event, ensuring we remained media accessible, media-present and facilitated positive coverage.
This event reinforced our priority on keeping our stakeholders and communities up-to-date, as per our stakeholder communications protocols. Forty-three situational reports were released – providing the single source of information for all communication channels.
Engagement practice in sector – This event provides a case study for others to consider. Getting customers reconnected in a safe and timely manner after an event is crucial to any network business and timely communications play a huge part.
Today, customers are increasingly dependent on electricity. Engagement teams need to be able to reinforce the importance of continuous improvement.
Key takeaways include the need to own your own messaging/channels and the importance of videos/ photos to provide a human face and tell your story. Imagery was facilitated by the field rollout of iPhones. The practice of the ‘one point of truth’ is applicable in any crisis.
18 Solar Incentive Scheme 2019 Finalist Consumer Engagement Award
Project partners » Aboriginal Community Project Description Corporations in the east and west Kimberley, Horizon Power’s Solar Incentives Scheme is investing $1.07M to » Indigenous Business co-fund up to 900kW of community-owned solar in eight remote Australia (IBA) Aboriginal Communities.
Project timeline The scheme was co-designed with Aboriginal Corporations, during 12 2018 – 2019 (ongoing) months of face to face community engagement. Feedback was that while communities knew solar would save money, it was expensive Location upfront, a big technical decision, and they weren’t sure who to work Kimberley, Western Australia with. From this community feedback, Horizon Power created the scheme offering each community a grant (30 per cent capped at $100,000), along with engineering and project management support.
Benefits to consumers
The scheme was co-designed with Aboriginal communities to reduce the upfront cost of rooftop solar and assist communities to reduce electricity costs (could be upwards of $200,000 pa).
The scheme ensures communities have access to quality, value for money solar installations by working with Horizon Power.
The key challenges the scheme addresses are: » improved electricity affordability for customers while maintaining a safe, reliable supply » increased solar uptake in communities (previously at almost zero) » reduced barriers to solar including cost, uncertainty and technical complexity.
The scheme, open to large remote 100 per cent diesel-fuelled Kimberley communities, presents four opportunities: » democratisation of renewable energy by improved access to solar for disadvantaged customer groups (30 per cent contribution to their capital costs) » lower energy bills for Aboriginal communities » reduced diesel consumption, resulting in reduced carbon emissions » reduced costs to Horizon Power, which in turn benefits taxpayers of the State who subsidise the regional electricity service. 19 Approach Benefits, results and outcomes
The co-designed project model resulted from 12 Under the initial pilot in November 2018, the remote months of intensive engagement. The scheme was communities of Djarindjin and Lombadina in the west designed to effectively tackle barriers to solar uptake Kimberley installed 80kW and 30kW respectively, and ensure that communities benefit. The co-design between them saving around $60,000 in electricity bills model is the preferred and most effective approach and displacing 61,000 litres of diesel each year, along to overcome obstacles faced by communities in with reduced greenhouse gas emissions. renewable investment. Residents of Aboriginal communities have a connection Following community concept design, Horizon Power with land, water and sun, so being able to receive undertook financial modelling to determine the energy from the sun is a very popular concept. The amount of upfront capital the utility could provide, communities are particularly happy with the reductions while maintaining the State Government’s parameters in their energy costs. for a positive NPV project, leading to strong project support (internally and within Government). Djarindjin Aboriginal Corporation Chief Executive Officer Jenni Gould said the community was excited about IBA was engaged under a partnership agreement to reducing its electricity costs through the newly installed provide a process for community Corporations to solar panels. access a chattel mortgage should the community seek financing for their solar installations. IBA’s contact “It will make a huge difference to the community and details were provided to community members who improve the viability of the roadhouse and the store wished to explore alternative financing options. which the community owns – it is also great for the environment and community members are pleased to Horizon Power’s renewable engineers undertook site see power being delivered from the sun,” she said. visits, working alongside community members to identify the main community buildings suitable for Lombadina Aboriginal Corporation director Caroline solar, such as recreation centres, offices, stores, and Sibosado said the money saved on power bills men’s sheds. The engineers and community members would go towards maintaining machinery used to identified strong, at height, roof tops on community- provide employment for community members and owned buildings that could take ‘commercial scale’ accommodation and administration costs. installations with minimal risk of damage. “It means a lot to our community,” she said, adding that Horizon Power also drafted detailed technical scopes the community hoped to get funding to install more – offering engineering support that is not readily solar in the future. available to community corporations. Horizon Power is working closely with the other eligible Horizon Power presented each Aboriginal communities and is preparing to sign an agreement with Corporation’s governing council with information the Kimberley communities of Warmun and Bidyadanga packs including aerial photos, options tables, costs in June 2019 – with respectful engagement continuing and simple process mapping to facilitate final with Beagle Bay, Ardyaloon, Looma and Kalumburu. investment decisions. The Scheme is delivering cleaner and more affordable Following a Corporation’s agreement, Horizon Power energy for some of our most remote Aboriginal undertook an EOI process to vet suitable providers to communities – freeing up funds for communities to recommend to communities. This ensured the solar invest and ensuring communities are co-designing their installations were high quality, with good product own energy futures in partnership with the service warranties and to a suitable safety standard. provider.
Throughout the project, close contact was maintained Reduced diesel fuel use also means a reduction in with each community, the State Government local Horizon Power’s subsidy from the State Government to shires, IBA and local media. Horizon Power has regional electricity supplies. presented the model to ARENA and the Northern Aboriginal Affairs Minister and former Energy Minister Territory and Queensland Governments. Ben Wyatt launched the scheme in 2018, saying:
“This is a great scheme that gives Aboriginal Corporations the opportunity to invest in solar and reduce their bills for electricity to community buildings.”
“That means the Corporations will have more money available to spend on other services for their residents.”
20 Leadership and transferability Horizon Power supported interstate knowledge sharing and has presented this model to ARENA Horizon Power is Western Australia’s regional energy and the South Australian, Northern Territory and provider delivering safe and reliable electricity across Queensland Governments. Power and Water 2.3 million square kilometres. Corporation has included the scheme as a case study for the SetUP program in the ARENA handbook We operate 38 power systems and deliver energy to published in 2019. 48,000 customers, including 53 remote and town- based Aboriginal communities. The scheme aligns with our business strategy which has Aboriginal advancement as a guiding principle, Horizon Power delivers energy solutions for regional ensuring benefit for indigenous people results from growth and vibrant communities. It’s investing $14M in service and project delivery. Horizon Power has been its renewable energy strategy, for remote Aboriginal engaging respectfully with Aboriginal communities Communities, to transition from 100 per cent diesel since inception in 2006 and is committed to using generation to around 45 per cent renewables. all business transactions as a system lever of reconciliation and inclusion. The Solar Incentives Scheme is the first project under this strategy and is delivering cleaner, more affordable At August 2019, four of the eight eligible communities energy to our most remote Aboriginal communities. had given the go-ahead to rooftop solar installation This frees up funds for communities to invest and under the scheme and Horizon Power are working ensuring communities can design their own energy with the remaining four communities to overcome futures in partnership with the service provider. their respective barriers to participation. Reduced diesel use also means a reduction in Horizon Power’s subsidy from the State Government to regional electricity supplies.
Throughout the project, close collaboration was maintained with Aboriginal Corporations and community residents, State Government, local shires, solar PV installers, IBA and local media.
21 2020-25 regulatory proposal 2019 Winner Consumer Engagement Award
Project Partners In order to drive Jemena Gas Project Description Networks’ (Jemena) customer centric culture and ensure the Our 2020 Plan presented a unique opportunity to expand the work transferability and ongoing we do with customers. benefit of the learnings, we focused on using our staff Developing our engagement strategy began two years ahead of our to develop our 2020-25 submission date. We sought out best in class examples to learn from regulatory proposal (2020 and consulted broadly with experts, advocates and customers. Plan), including the leading This led us to undertake our broadest, most consultative (iterative) and delivery of our customer and most ambitious engagement program ever. We wanted to raise engagement program. the bar. To provide independence To achieve this, no topic was off-limits. We sought out opportunities and a seasoned approach, for customers to make meaningful decisions and the process was we engaged RPS (formerly necessarily transparent and genuine, allowing customers to shape our StraightTalk) to assist with plans and culture. the planning, design and execution of our broad engagement program. Project Timeline We also partnered with Ethnic Communities Council NSW Our engagement began in September 2017 with a planning phase and was to provide expertise and completed in May 2019 prior to submitting our 2020 Plan to the AER on 28th facilitate our engagement with June 2019. Over this period we undertook multiple engagement activities as Culturally and Linguistically detailed in our journey map below. Diverse communities. Due to the breadth and depth of this consultation, which ranged from online Project timeline and small business customers to sophisticated large gas users and other Sept 2017 - June 2019 members of the energy industry including retailers, we have chosen to focus this submission purely on our face-to-face consultation with household Location customers. New South Wales
22 Location
Our face-to-face household customer engagement covered the entire Jemena NSW network of 1.4 million customers and included: » Bathurst – cold climate, high gas usage driven by heating, relatively high income (for a regional location) » Dubbo – early rural engagement to help shape the engagement plan, relatively new to gas » Fairfield – Sydney suburb with culturally diverse communities, specifically recently migrated Arabic speaking communities » Goulburn – cold climate, high gas usage but low average incomes, regional, recently upgraded » Griffith – regional warmer climate, less gas usage - predominately cooking and hot water, low income » Western Sydney (Parramatta) – variable incomes, higher proportion of units, mixed gas usage and » Kirrawee – retirement village (over 55) with separate over-55 sessions centralised hot water systems » Wollongong – early regional engagement with low » Newcastle – warmer coastal climate, lower gas income customers to shape the engagement plan usage, higher income » North Sydney – Jemena offices where we Engaging participants from such a variety of areas brought together a range of customers from ensured we spoke to a full breadth of customers and across the forums to share their views and heard their varying experiences of gas and its relative discuss our Draft Plan impact on their cost of living.
23 Benefits to consumers Approach
We wanted customers to meaningfully challenge We began early: planning our engagement in 2017 and guide our plans and are now confident our plans by working with customers to understand how they deliver the services customers want at an affordable wanted to engage and what topics were important to price. them. We workshopped engagement materials with customers and learnt the importance of involving Customer comment: them in designing the process and determining the ‘I am really impressed as I do feel that Jemena outcomes. heard the feedback from the Western Sydney workshops. I have confidence in the decisions We held multiple sessions: engaging over a long time Jemena makes to be in the interest of the frame with the same groups, building their capacity customers’. to challenge us and debate complex topics. We held three sessions to shape our plans and a fourth to To achieve this, we invested in our customers energy review and critique our Draft Plan. literacy and they heard from a broad spectrum of experts. They had the opportunity to debate and We were inclusive: engaging three groups in tailored shape their views over multiple sessions and now programs: confidently engage in the energy debate. » Households with a range of income, gas usage and geographical backgrounds The breadth of engagement ensured vulnerable groups also had a voice. » Over-55’s in shorter but still deliberative sessions, even visiting retirement village Specifically customers will benefit from price customers who were underrepresented reductions, but they also told us where they valued » Working with the Ethnic Communities Council investments. They changed our plans to better NSW to identify communities and facilitate meet their needs, ensuring our plan got the balance forums in Arabic (Arabic speaking staff assisted, between short-term and long-term decisions right. we believe we are the first energy distributor in Australia to do this).
We were transparent: providing individual bill impacts and overall costs, showing the collective impacts of choices customers had made throughout the engagement and allowing customers to reconsider. Forums were open to and attended by many external observers. At our final session we even left the room to ensure we didn’t influence customers.
We learnt: adapting our plans based on customer feedback, to provide more time for discussion, to revisit topics of interest, to provide real life examples for debate and to focus on fewer but the most impactful topics.
We listened: Jemena means to hear, listen and think. To test that we had truly done that, we engaged after our Draft Plan was published with a group of customers who volunteered to come together from across the regions to share their perspectives.
We measured: customers voted on principles, areas of expenditure, specific projects and finally the Draft Plan.
24 Benefits, results and outcomes The most profound outcome though was the impact on staff. Delivering such a substantive program We have been surprised and delighted by customers’ required significant staff involvement, specifically 63 commitment and passion for contributing and their staff helped facilitate 169 face-to-face hours. This and capacity to engage in complex decision making. the commitment from all levels of the organisation By investing time with our customers they have has driven a significant shift in our customer contributed to and changed our plans and we are understanding and increased our desire to continue to now confident that our 2020 Plan delivers what our involve customers in our decision making. customers want. Leadership and transferability Customers believe our plan is capable of acceptance with 90 per cent of our final forum participants voting Jemena’s vision is ‘To be customers’ first choice that our Plan is in their long-term interests. for world leading, sustainable and reliable energy’. Putting the customer at the heart of everything we Furthermore, by taking the time to understand the do is part of our DNA. Our objective is that customers diversity of views and why our customers held them, will advocate for us based on the experience they we are better equipped than ever before to make have of our products and services. To drive this decisions that satisfy our customers’ needs, not only through the organisation we have established in the Plan but in our everyday decisions. ‘Customer Focus’ as one of our five company values and through this we commit to ‘consider our We learnt what’s important to our customers customers in everything we do’. specifically: » Maintaining current levels of reliability (84 per cent It was therefore a natural step for our leadership team of customers think our Plan does this) to support our engagement, which would be crucial in achieving our engagement objectives. Our executive » Preparing for the future through investments in future fuels (74 per cent think our Plan achieves leadership team were all actively involved in the this – we want to work to improve this) design and delivery of the program and half (four) of our board members participated. » Keeping gas affordable (94 per cent believe our Plan achieves this) Seeing this level of engagement from senior staff » Fairness, e.g. investing where service levels are encourages people across the organisation to lower (78 per cent believe our Plan delivers) consider their approach to engagement.
Along the journey customers also taught us about It was also important to customers, they said: better engagement including: “After the Chairman of the board presentation, it » Taking time to understand the ‘why’ behind the opinion. Fewer quality conversations proved more is clear that Jemena are interested in customer valuable than a jam-packed agenda and through concerns, not just shareholder interest”. this we understood the importance of inter- generational fairness to customers. Since this engagement we have conducted electricity literacy sessions in Arabic, we are investing in data » Involving as many industry stakeholders as loggers on 1000 homes to better understand gas possible. Customers want to engage with the industry as a whole. Understanding this led us to usage, we have committed to the Energy Charter and be early signatories of ‘The Energy Charter’. We much more. The ripple effects can be seen throughout also learnt that sharing opinions, even those vastly the organisation from putting customer impacts up different to our own, built trust in the process and front in board papers, customer value moments in risk the industry. committees, staff sharing their customer experiences » Focus on conversations not presentations (two- and recognition for those involved in the engagement way dialogue was much more insightful than focus program. group formats). Ensuring staff were briefed in their role to listen and facilitate conversations was To ensure we continue to leverage the power of the crucial. engagement program we have recruited customers to participate on an ongoing basis through our Customer » Customers can engage in complex conversations. By giving time, examples and using plain English, Council or individual research projects. We believe we we discussed asset lives, depreciation, capital have built ongoing relationships with customers, that contributions and more, and changed our plans will stand us, as well as them in good stead. as well as our pre-conceived ideas based on their views.
25 26 People’s Panel 2019 Winner Consumer Engagement Award
Project Partners In order to drive Jemena Project Description Electricity Networks’ (Jemena) customer-centric culture and Building on previous learnings, we set ourselves the challenge to ensure the transferability and find new ways of capturing customer preferences and reflecting ongoing benefit of learnings, them in our plans. In consultation with customers, we developed an we focused on using our engagement plan grounded in the IAP2 values to succeed in meeting staff to develop our 2021-25 our objectives. regulatory proposal (Draft Plan), including leading and With compact geography and a strong desire to do more, a delivering our customer representative citizen’s jury - our People’s Panel - was created to engagement program. involve household customers more deeply than ever before in complex decision making. To provide independence and expertise, we engaged Capire Through extensive expert presentations and collaborative discussions, Consulting Group to assist our customers confidentially provided a series of recommendations, with the planning, design and which were subsequently incorporated in our Draft Plan. execution of our household customer engagement activities. Project Timeline
Project timeline Our engagement began in September 2017 with extensive planning grounded in the IAP2 values and principles and completed in May 2019 following the Sept 2017 - May 2019 development of our Draft Plan. The substantive elements of our customer Location engagement occurred in July and August 2018 and again in March 2019. A summary of our customer engagement activities is detailed in the journey Melbourne, Victoria map below.
Due to the comprehensive nature of our engagement program, including online, small business and large customer engagement, as well as cross- industry engagement on specialist topics such as tariffs, this award submission will focus on our household engagement, also known as the ‘Jemena People’s Panel’.
Location
Given the relatively small footprint of our network, we considered a core venue would be the best way to bring the Jemena community together. To this end, we hosted 43 of our household customers in Broadmeadows - at the heart of Jemena’s electricity distribution network.
27 Benefits to consumers Approach
We wanted customers to meaningfully challenge We wanted to be industry-leading: we set out and change our plans, which they did. By investing not only to improve on previous engagement but in customer’s energy literacy and giving them the to understand how we could truly collaborate opportunity to hear from a broad spectrum of with customers taking learnings from experts and industry experts, they were able to test and refine customer advocates. their views over multiple sessions and grew in confidence to become active participants in the We began early: planning began in 2017, working with energy debate. customers to understand how they wanted to engage and what topics were important. We workshopped They provided 25 recommendations, 13 directly engagement materials and learnt the importance of related to Jemena’s pricing and services; our involving them in designing the process. customers became decision-makers. The remaining recommendations were outside our remit but We were inclusive: we created a comprehensive important to customers, so they challenged us to group representing the diversity of experiences, advocate for them, leading us to be early signatories values and voices within Jemena’s community. Using of The Energy Charter. demographic and company data, we set targets for customer characteristics like age, suburb, country of We gave customers confidence that their views were origin and residency, as well as energy attributes like valued and that we took them seriously. solar panel and battery ownership.
One customer said, “It was a good way for a normal Using a range of recruitment techniques including person to participate in important policy and social media and letter drops, 190 people nominated community issues” with 98 per cent finding their themselves to participate, of which 43 were selected, participation worthwhile, and 95 per cent keen to and all our customers were able to contribute take part again. through yourgrid.jemena.com.au.
We supported attendance through assitance with transport, interpreter and childcare; ensuring these barriers did not prevent anyone from taking part.
28 We innovated: » We feel that Jemena did very well to adopt the People’s Panel recommendations. Jemena trusted in » Using over 30 techniques, we designed activities to provide a range of experiences, learning and the ability of this diverse group of people – 96 per deliberative opportunities cent agreed » Using a financial model, participants could Delivering this substantive engagement program see the cost implications of decisions and required significant staff involvement; specifically recommendations in real-time 34 staff facilitated over 84 hours of face-to-face » Sharing individualised bill impacts for each engagement. The involvement and commitment from all member under different pricing structures using levels of the organisation drove a significant shift in the their smart meter data understanding we have of customers. It increased our desire to continue to involve them in decision-making, all recommendations had a Super We measured: and since the panel sessions, we have continued to Majority - a vote of 75 per cent or more - giving involve the panel members in our business. confidence they represented the broader community. Over and above the contribution customers made to customers wanted to hear diverse We responded: our Draft Plan, the People’s Panel contributed in more opinions, so we invited a range of industry experts profound ways - they helped shape our culture. We no including retailers, advocates and consultants to longer know of our customers, we actually know them. present. Their expertise and independence enabled The People’s Panel is simply the start of our journey customers to gain insights and confidence in the with them. process. Leadership and transferability We built relationships: with 9 sessions and 2 site tours, we took the time to understand our customers. Our objective is that customers will advocate for us based on the experience they have of our products Benefits, results and outcomes and services. To drive this through the organisation, We have been surprised and delighted by our we have established ‘Customer Focus’ as one of our customers’ commitment to and passion for five company values, and through this, we commit to contributing, care and concern for others in the ‘consider our customers in everything we do’. community, and their capacity to engage in complex It was, therefore, a natural step for our leadership team decision making. By investing time with our to support our engagement, although stepping out and customers, they have contributed to and changed our committing to the People’s Panel was a leap of faith. plans, and we are now confident that our Draft Plan We were unsure how the process would work, and we delivers what our customers want. Furthermore, by were not confident customers would put aside self- taking the time to understand the diversity of views interest to achieve a collective community view; they and why our customers held them, we are better quickly proved us wrong. equipped than ever to make decisions that satisfy our customers’ needs, not only in the Draft Plan but in our Our executive leadership team were all actively involved everyday decisions. in the design and delivery of the program, and many of our board members participated, including our The robust recruitment process meant that we could Managing Director and Chairman. Seeing this level of be confident the people affected by our decisions had engagement encourages staff across the organisation the opportunity to understand the process and were to consider what they do in their daily work and the able to be involved in the decision-making. impacts on customers. Throughout the process our customers’ confidence Since hosting the People’s Panel we have conducted grew and so did ours, so in our last session we left the sessions in the Arabic community, our panel members room to allow them to put in their own words their have been actively involved in our quarterly Customer views on our plan. They said: Council sessions and product design workshops, and » The Draft Plan has struck the right affordability more importantly, our leadership team continue to balance with short-term pricing increases balanced encourage this ongoing relationship. The ripple effects by longer-term decreases; the Draft Plan has can be seen throughout the organisation from putting struck the right sustainability balance by investing customer impacts upfront in board papers, discussing in upgrades to facilitate sustainable and renewable customer values moments in risk committees, staff technology in the grid – 96 per cent agreed sharing their customer experiences and recognition for » Jemena more than sufficiently considers the long- those involved in the engagement program. term interests of its customers by focusing on the long-term benefits of investment decisions, Through the promotion of the People’s Panel striking a good balance of when to invest to experience and the involvement of a wide range of minimise risks, and listening to the interests of all industry stakeholders, our aim is that this approach customers through a representative and informed becomes a platform for elevating new standards of panel – 92 per cent agreed customer engagement.
29 30 Revenue Determination Process Engagement Co-Design Workshop 2019 Finalist Consumer Engagement Award
Project timeline Late 2018 - May 2019 Project Description
Location In late 2018, Powerlink identified the potential benefits associated Brisbane, Queensland with co-designing the engagement approach for our 2023-27 Revenue Determination process. This was supported by the Powerlink Board and Executive Team.
In early 2019, Powerlink worked closely with our Customer Panel to develop the agenda for the full-day workshop to ensure it was targeted to meet customer and stakeholder expectations.
Comprehensive pre-reading materials were provided to participants one week prior to the workshop.
On 24 May 2019, 40 participants, including customers, advocates, stakeholders and members of Powerlink’s Board and Executive Team collaboratively shaped Powerlink’s: » Overarching engagement approach » Engagement scope, techniques and sequencing » Communications and tools to support engagement » Evaluation processes.
Engagement Co-Design Workshop informed engagement approach on Revenue Determination process out to 2022.
Benefits to consumers
Partnering with our customers and stakeholders to ‘co-design’ our engagement approach for Powerlink’s 2023-27 Revenue Determination process will ensure that engagement focuses on elements with the greatest ability to be influenced and significant impact on Maximum Allowed Revenue (MAR) or improvement of outcomes, which contributes to the price customers pay for their electricity.
A co-design approach means our customers and stakeholders played a direct role in developing our engagement approach for the next Revenue Determination.
With their input, our final engagement approach will better meet their needs and preferences and maximise their ability to provide relevant input to Powerlink that will influence investment decisions and planning. Increased visibility of key proposed engagement activities at a very early stage also 31 helps them to better plan their future resource needs With input from the Customer Panel, we also sought and helps us to do the same. input from well-regarded customer advocate Louise Benjamin to present and participate at the workshop. This is the first time a network business has used a co-design approach to collaboratively develop its Pre-reading documents were circulated attendees, engagement approach for a Revenue Determination. including: » Overview of AER Revenue Determination process Powerlink opted for this innovative approach to gain greater confidence on engagement strategy, scope, » Powerlink’s engagement approach on the 2018-22 technique selection and evaluation. More importantly, Revenue Determination we believe it will lead to better customer outcomes. » Overview of NewReg engagement trial Approach » Powerlink’s Stakeholder Engagement Framework » Glossary of engagement techniques. While Powerlink’s engagement on our previous Revenue Determination process was positively The workshop was structured into four sections: received by customers and stakeholders, their ability » approach to influence the actual engagement approach was » scope limited. » techniques Collaboration on particular aspects of a Revenue » evaluation. Proposal is quite common, however using a co-design approach to partner with customers and stakeholders Approach to design the overarching engagement approach has never been done by a network business before. Attendees were welcomed by Powerlink’s Chief Executive, which was followed by a presentation With internal support at a Board and Executive level, from Louise Benjamin on best-practice engagement Powerlink worked closely with our existing Customer approaches and insights on revenue determination Panel to develop the workshop’s agenda and ‘wins’ (and losses) by other network businesses. structure. Participants then considered: » How can we best use existing engagement Powerlink also approached members of the Customer activities? Panel to present at the workshop to provide their insights into engagement – with Powerlink and with » Is there a role for a negotiation panel? other network businesses. » How can we best involve the AER prior to submitting our Revenue Proposal? The workshop invitation list was developed using » How do we provide the best opportunity for extensive input from across Powerlink to get the customer representatives to be involved? right representation across customers, regulators, government and industry. » How do we demonstrate we are meeting customer and AER expectations?
32 Scope
To identify a clear engagement scope, participants were asked to plot the most relevant aspects of our Revenue Proposal in terms of ability to influence and level of impact.
This identified the ‘engagement sweet spot’:
Rate Engagement focus of return
Capex Regulated Opex efficient Capex forecasting replacement Asset Base base year methodology expenditure
Operating Capex Opex forecasting environment augmentation methodology (narrative) expenditure
STPIS, EBSS, Capex inputs CESS & assumptions
Pass Pricing Opex step Capex contingent Depreciation throughs methodology changes projects
Impact on Maximum allowed revenue Impact on Maximum allowed AEMC Revenue Shared Opex trends Price path Capex IT Levy path assets (productivity)
Ability to influence as part of Revenue Determination
Techniques The draft engagement plan will be updated taking account of Customer Panel feedback and then Two external Customer Panel members provided circulated to wider workshop attendees for comment insights on best-practice engagement techniques. before being finalised and put into practice. Active discussion was held to match techniques with aspects in the ‘engagement sweet spot’. A copy of the current version of the draft engagement plan is here. Evaluation Customer and stakeholder benefits Our overarching measure of engagement success is delivering a Revenue Proposal capable of acceptance The overarching benefit of using a co-design by our customers, the AER and Powerlink. The final approach is to streamline and target engagement so session sought insights from participants on other that customers and stakeholders have an appropriate ways to evaluate engagement effectiveness. level of influence on investment decisions and planning, in a way that is time and cost-efficient. Benefits, results and outcomes Other benefits for customers and stakeholders Outcomes include:
Participants completed a feedback form at the » Opportunity to directly shape Powerlink’s engagement approach from the outset, workshop’s completion to gauge satisfaction levels and identify future improvement opportunities. They » Greater confidence and transparency of rated both the satisfaction of the workshop and engagement drivers early in the process: effectiveness of engagement techniques used as − Ensure the scope of engagement focuses time 4.25 out of 5. and resources on aspects with greatest impact on MAR Following the workshop, a summary report was sent − Engagement techniques align with preferences to all participants and made available on Powerlink’s website and social media channels. − Information prepared is simple, accessible and value-adding These insights were used to guide development of a − Better understanding of Revenue draft engagement plan. This draft was circulated to Determination process, including key our Customer Panel and discussed at the next panel milestones meeting on 1 August 2019 to gain further input and − Better understanding of best-practice ensure it aligned with expectations. engagement approaches.
33 Engagement learnings Leadership and transferability
Undertaking the co-design workshop was a valuable Members of Powerlink’s Executive Team, including the opportunity to work directly with our customers Chief Executive, were directly involved in developing and stakeholders to shape the delivery of this major the structure and content of the workshop. Briefings engagement initiative. It was also positively received were then held with the Board. by all involved. Leadership support for the co-design process was Key lessons from this collaborative process included: reflected in members of Powerlink’s Executive Team » Importance of developing and communicating a and Board actively participating in the full-day broad business narrative of what the future looks workshop. like and how this aligns with our potential revenue requirements The key learning for Powerlink from the co-design process was the ‘risk vs benefit’ dynamic. For a » Fit-for-purpose engagement is optimal for Powerlink – we need to leverage off existing network business to agree to a truly collaborative ‘business as usual’ engagement activities as much process to develop its engagement approach has as possible risks including: » Clarify the impact of cost reductions within and » Expectations are set that cannot be met from a outside Powerlink’s control regulatory or timing perspective » Wary of consultation fatigue – need to provide » Impact on Powerlink’s resourcing to meet front- funding and resource support to customer ended engagement timeframes representatives » Having less control on decision-making around a » Need to communicate engagement schedule as crucial business initiative. early as possible These risks were far out-weighed by the associated Importance of protocols regarding governance and » benefits including: conflict of interest » Greater confidence the engagement approach will One-on-one briefings are critical » meet customer and stakeholder expectations and » Provide face-to-face engagement opportunities for have necessary levels of participation regional customers » Opportunity to learn and incorporate other » Establish an online portal so customers can access best-practice approaches with customers and relevant information in one area. stakeholders sharing their experiences » Early issues identification It is hoped that Powerlink’s innovation in commencing engagement early-on in the Revenue Determination » Establish an effective evaluation framework process will inspire other network businesses to » Clarity on the engagement schedule up to two strengthen their engagement and try new ways to years in advance deliver better customer and stakeholder outcomes. » Increased goodwill in response to our genuine efforts to collaborate » Gaining early customer and stakeholder feedback that our Revenue Determination is capable of acceptance.
We are keen to share our experiences with the energy sector. Like all of our engagement activities, Powerlink published relevant pre-reading, presentation, summary document and a video capturing the essence of the workshop on our website. The final engagement plan for the Revenue Determination will also be made available via the website.
As a signatory to the Energy Charter, Powerlink will also share our insights from the co-design workshop across the energy supply chain as part of the Better Together Initiatives.
The success of the co-design workshop has reinforced the value of authentic engagement – recognising that we ‘don’t have all the answers’ and can achieve synergies when we effectively partner with our customers and stakeholders.
34 Setting tariffs that will help in transitioning 2019 to a new energy future Finalist Consumer Engagement Award
Project partners: We consulted with customers Project Description and stakeholders from: In developing our 2020-2025 Tariff Structure Statement (TSS), SA » Our standing Customer Consultative Panel and Power Networks engaged more deeply and widely with customers Reference Groups and stakeholder representatives than in the past, to develop fit- for-the-future tariffs that had the support of stakeholders and » Energy Consumers which addressed key challenges influencing reliability and cost for Australia customers. » Individual consumers (residential and business) Tariffs are a complex subject and often judged in the past as » Regional consumers “too difficult” or “too technical” for broad engagement. We have (residential and business) found that working collaboratively over time with a much wider group of stakeholders can get them and us to a point where we » Business group representatives can constructively engage on tariff setting strategy that produces − South Australian outcomes that are smart and in the best interests of customers. Government Engagement focused attention more sharply on the key challenges − Australian Energy Market Commission and opportunities and how to minimise unintended consequences. − Australian Energy Market Operator − Australian Energy Development of our TSS for 2020-25 needed to address three issues: keeping Regulator a lid on peak demand growth; reducing cross subsidies and anomalies within − AER Consumer our tariff structure; and, importantly, encouraging a change in behaviour to Challenge Panel help absorb growing day-time solar energy generation. (CCP14) − Energy Networks In South Australia, more than 200,000 residential customers have solar Australia and other panels and in combination they generate more than 1,000MW of electricity. distribution businesses There are also programs in place providing subsidies for installation of a » Retailers: potential 90,000 batteries. − Australian Energy AEMO believes that without careful management, growth in distributed Council generation capacity may lead to localised or wider blackouts in SA as early − Alinta Energy as from 2022. Given localised network capacity constraints, we also are faced − AGL with an imminent decision to impose lower or zero export limits for new solar − Lumo Energy roof top installations. This clearly is not a positive outcome for customers. − Origin Energy − Simply Energy In response, we have been working with AEMO and across distribution − Energy Australia and solar industries (installers and manufacturers) to develop a number of initiatives to respond to this threat. Our tariff strategy needed to be aligned Project timeline: with these other strategies. Nov 2017 - Jan 2019
Location: South Australia 35 Some of the questions we explored with Project Partners stakeholders included: We took the view that amid a complex and » What are SA Power Networks’ current obligations and existing tariff strategy? challenging transition in the energy industry, we needed to engage with a wide range of people in our » What is the future direction being pursued by the community to develop network tariffs for the 2020- AER/AEMC? 2025 period. » What challenges is SA Power Networks facing with the uptake of Solar PV and batteries? Stakeholders who engaged in what was a lengthy » What are the other challenges/cross-subsidies and detailed process included electricity customers within current pricing structures that need in South Australia (residential and business); people addressing? from various stakeholder representative groups, including those representing vulnerable customers; » What cost-reflective tariff solutions – large business, small business and residential – should and energy sector participants, including retailers SA Power Networks be considering for the Tariff and policy/rule making bodies such as the AER and Strategy? AEMO.
» How do we implement, and when should we In 2016, we had developed with stakeholders a set commit to these solutions? of customer impact principles for tariff setting. » How can we use the Consumer Impact Principles These principles formed the basis of developing and (developed through deliberative engagement assessing options for our 2017-2020 Tariff Structure process with SAPN Electricity Advisory Panel) to Statement and we have ensured, with stakeholders, evaluate Tariff Strategy proposals? that our 2020-2025 TSS is consistent with our agreed, » How can we test the proposed Tariff Strategy? guiding set of tariff-setting principles: of simplicity; empowering the consumer; and fairness and equity These discussions were supported in various ways, (plus compliance). including: » Video content (to explain aspects of network management) » Talking Power (website with background information and data) » Focus groups (to discuss specific issues) » Deep dive workshops (to develop deep understanding of issues and options) » National Forums (to check solutions were applicable for retailers and regulators and ensure alignment with national objectives) » Regional participation (to ensure regional customers were heard) » Detailed modelling (to examine the impact of various tariff options on different customer groups) » Involving leading technology providers and innovators (determine that they could respond) » Bilaterals (to allow for robust conversations around options and to overcome competitive “tensions”) » Right conversations with the right people – focusing on influencers to ensure we get the right outcome for all consumers. » Trials – to test assumptions, reducing risk to consumers before state-wide deployment of any solutions. Managing risk through targeted pilot approach.
36 We have been widely commended by stakeholders John Herbst – Renewables Reference Group member for the amount of time, effort and openness with online submission to Regulatory Proposal (to AER) which we have engaged on tariffs and we are confident our proposed approach is more robust as Credit to SA Power Networks for the work it has put a result of our extensive engagement. The following into creating this innovative tariff. This tariff structure feedback has been gathered from responses to our is a forward step in the transition to 100 per cent Draft Plan and our 2020-25 Regulatory Proposal renewable electricity. It offers strong, clear incentives (submissions to the AER). for investment in home battery storage and for increased midday consumption. Total Environment Centre (TEC) – extracts from online submission to Draft Plan Thank you to SAPN for protecting most small businesses from mandatory Demand Tariffs. TEC is a strong supporter of the move to more CRNT (cost reflective network tariffs) in general, and well- CCP14 online submission to Regulatory Proposal designed demand or capacity tariffs in particular. (to AER)
Off-peak controlled load tariff: We congratulate SAPN CCP strongly supports the Time of Use solar sponge on introducing a daytime solar sponge tariff to help tariff as a means of influencing customers to shift reduce the solar trough. their load from the evening peak to the midday trough. We agree with SAPN’s intentions for the solar The “customer impact principles” are … ground- sponge tariff namely: “The changes...... will result in breaking for an Australian network business and could more equitable and fairer pricing that reflects how form a much stronger part of a SAPN and customer customers actually use the network. That is, the narrative. customers who contribute the most to the need to invest in the network will pay a fair share of this cost Business SA - online submission to Regulatory –it won’t be borne by customers who do not.” Proposal (to AER) Influencing and rewarding those customers who shift Business SA has long argued about the potential their load is a much better approach for customers futility in implementing tariff reforms, which are than SAPN investing in more network. not ultimately picked up by retailers. We recognise that during this current round of tariff restructure Energy Consumers Australia online submission to consultations, SA Power Networks has made a Regulatory Proposal (to AER) genuine effort to engage with electricity retailers and, having attended some of those workshops, We have undertaken a very high level review of it is clear that at least some retailers are willing to the proposed TSS. We find that SAPN has deeply work constructively with SA Power Networks and considered how its tariffs should change over time consumers on tariff issues, albeit not being obliged to to meet the challenges of the future network. It has do so. proposed significant change including time of use charges for residential customers with interval meters, University of NSW online submission to Regulatory and an optional prosumer tariff. A very innovative Proposal (to AER) aspect of the TSS is a very low charge during the ‘solar trough’. We commend SAPN for undertaking a detailed and transparent analysis of the various impacts relevant to We are currently conducting tariff trials that their Tariff Structure Statement (TSS). have already been very informative about the implementation issues for retailers. The next step, The South Australian Wine Industry Association pending approval of our TSS from the AER, is to Incorporated - online submission to Regulatory work with customer representatives and stakeholder Proposal (to AER) groups on the communication and education process for customers about the new tariffs. SAWIA is broadly supportive of the proposed tariff structure and is keen to see the results of the tariff trials that are currently underway.
SAWIA’s experience of engagement with SA Power Networks has improved significantly over the past five years and is now a representative of their Business Reference Group, and was pleased to have been involved in the extensive engagement process that was undertaken in developing the Draft Plan.
37 The following table outlines what we heard and how we responded in our final TSS:
What we heard Our response in this TSS “Business shouldn’t have to bear the costs • Guaranteed Service Level (GSL) costs shifted from being recovered across all for services not provided to them.” usage, to small customers (residential and small business) only, on a per customer basis “The proposed tariff structures are very • Reduced the number of tariff elements from initial proposals complex. Simplicity please.” • Reduced the number of tariffs proposed from initial engagement with stakeholders • Simplified ‘anytime blocks’ to only address critical issues • Ensured consistency between time blocks where possible “The Critical Peak Pricing tariff is too • No longer proposing the Critical Peak Pricing tariff complex.” “Tariffs should be designed with retailers • We will continue to engage with retailers on tariff design in mind.” • We have not referred to likely NEM pricing, but have looked at the congestion in our network when determining the new tariffs • We have reduced the off-peak residential ToU to those periods best suited to address daily network issues Retailers asked to be informed of the most • We will confirm with retailers the critical components of our tariffs important tariff elements.
“Customers need 12 months of data to • We expect retailers will offer tariff choices understand their usage before moving to a • If retailers don’t offer a choice of tariffs, the network price impact on small new tariff.” customers should not be significant and we feel doesn’t warrant the provision of data “Stage the transition through pricing • We will transition all small customers to a new structure evenly over a five- within tariff structures.” year period “How will desired behaviour changes • Largely the customer response is unknown at this stage, but we expect that result in outcomes and how will these daily and summer congestion will reduce or at least not increase, which impact future planning?” should result in lower future capex from avoiding or deferring augmentation and expansion of the network • We will continue to work collaboratively to ensure network planning and tariff structures are complementary “Moving to greater fixed costs removes • We acknowledge concerns raised about fixed supply charges but believe any incentive or possibility for customers there is still sufficient variable charge to encourage customers to respond to modify behaviour to reduce costs.” “Fixed charges are regressive and do not • We believe our plans to slightly increase supply charges are more cost- encourage energy conservation.” reflective and remove some cross-subsidy
15 Supporting Document 0.10 - AnnShawRungie Tariffs Deep Dive Workshop Report, Original Proposal
Project timeline 27
38 Across November 2017- March 2018 we conducted Location preliminary discussions on issues that needed to be addressed from a network and customer perspective Consultations occurred primarily in South Australia, in our 2020-2025 TSS. These included bilateral but also interstate to understand consumer, retailer conversations with key stakeholders, including and regulatory/market-related issues. retailers, and deep dive workshops to inform the development of a draft TSS provided to stakeholders Trialling proposed tariffs has also been helpful in our in August 2018. This draft was subjected to various journey. In 2014/15 we conducted trials of a proposed panel and bilateral discussions with stakeholders prior residential demand tariff introduced under our 2015- to a final TSS being lodged. The process ensured a 2020 TSS. This clearly identified issues in terms of high level of customer and stakeholder input into complexity for customers and challenges for retailers identifying the issues that needed addressing, the in implementation. options and the solutions. The consultation resulted in Trials are currently underway for our proposed a significant focus on simplicity, clarity, and avoiding (2020-2025) Time of Use (TOU) and Off-Peak unintended consequences in our TSS. Controlled Load tariffs. While in the preliminary Initially, we focused the discussions on capacity stages, we are already are getting valuable building and relating tariffs to what’s driving network information on implementation issues and how pricing and what are the emerging trends for retailers will respond to the offerings. Similarly, a trial managing the network (and in the wider industry) of a demand interval tariff for large customers has including the challenge of growing day time solar surfaced the investment of time and energy required generation. by them to make it work for them.
Rather than only bilateral meetings, we brought Description business and residential customers and other Tariffs can have a significant role to play in influencing stakeholders including retailers, in the same room, to outcomes for electricity customers. Tariff incentives discuss with our senior leaders and tariff experts the need to be carefully thought through to achieve a problems we were trying to solve with tariffs – and desired and balanced set of outcomes and minimise particularly the growing challenge of managing solar unintended consequences. generation. In reforming tariffs, we needed deep engagement We discussed what we believed would make a with stakeholders about equity and cross subsidy difference if customers responded to it and what issues in our existing tariffs; transitioning to cost- were the challenges for customers in responding. reflective tariffs; how we might take advantage of Stakeholders supported the direction but wanted to the opportunities and manage the risks facing our minimise the potential for unintended consequences. network (and ultimately customers) from growing Following release of the Draft Plan in August 2018, investment in distributed generation; and how various we undertook targeted engagement in key areas tariff pricing signals may impact customers and be involving two working groups – a residential tariff applied in the competitive electricity market. working group and business tariff working group. These groups were engaged to provide guidance to refine the TSS and were informed by detailed modelling on customer impacts and different options.
Existing retailer relationships were utilised in one-on- one meetings to explore the options and discuss how various tariff designs might play out for retailers. The issues raised and feedback these groups provided significantly influenced the final outcome with a focus on the need for greater simplicity.
39 Benefits to consumers The wide consultation and investment of time and resources to build shared knowledge and A key element of consultations was to achieve a understanding of problems to be solved provided for consensus about how we will apply tariffs in SA across rich participation and a significant outcome that we 2020-25 to support the investment decisions of believe is very well regarded nationally in the sector customers and maintain a stable network. and which will support longer-term decision making. For participants, the process resulted in: a more Benefits, results and outcomes informed customer/stakeholder base (and network business); a consensus on balancing equity and Consumers will benefit in many ways from the fairness impacts on various customers; and avoidance consultation if network tariffs are reflected in retailer of unintended outcomes. offerings. » They will have a simpler, but better set of network Customers benefit directly through simple incentives tariff options; to shift load, so they can more directly influence their energy costs and benefit from lower network » There will be greater equity and less cross subsidy across different consumer segments; expenditure in the longer term. » They get an incentive to access cheap energy Consultation also identified the opportunity to during the middle of the day; and leverage investment in renewables by incentivising » In the long term this creates the potential for use of low-cost solar energy during the day (thereby reduced future network expenditure. tackling the growing risk associated with supply/ load imbalances in the low voltage network), Our stakeholders benefitted through: with consumers benefitting from the additional » Gaining a deeper understanding of tariff setting opportunity of maximising their access to cheap, and our business, which will form a significant renewable (and lower carbon) energy. basis for future consultations. Approach » They have worked through how tariffs can influence behaviour. We believed there were many customers and » They have a clear knowledge of the trade-offs stakeholder groups with a heightened interest in involved in developing a coherent tariff strategy. the outcome of tariff setting (but with a low level » A greater understanding of our efforts to balance of knowledge or insight into its complexity and the various and sometimes competing customer and trade-offs inevitably required) and this provided an community interests. opportunity for wider and deeper consultation. SA Power Networks benefitted through: We have a well-developed approach to stakeholder » Developing more innovative tariffs that retailers/ engagement through our long-standing consultative consumers are more likely to respond to. and reference group framework and additional » Our trials identified potential barriers to program-specific engagement, such as for our participation, which were mitigated through Regulatory Reset and for our Future Network re-design of tariff elements. Strategy. These provided us with a rich source of potential participants actively engaged with us as a » We also have moved to a Time of Use (ToU) approach rather than demand-based approach. business and some less so. This is simpler for customers and supported by stakeholders. We believe our program reflects a growing level of maturity for us and the sector and it was the sum of Retailers now have the potential to provide better- the parts (rather than one single “innovation”) that calibrated network tariff options that suit customer made for a better outcome. needs and supports a more competitive market. » The combination of a wider group of participants Most significantly, we have an outcome that has been » Deep dives jointly developed with our stakeholders. They have » Granular modelling of various outcomes for been in it from the start and their commitment to the various customers process has ensured a great result. » Participation of experts in the industry The process has been enlightening for technical » Bilateral meetings with retailers and regulators (who have significant influence on outcomes) to people within the business. The engagement has test hypothesis and how certain options might influenced our approach to tariff design – we now play out recognise our previously proposed demand-based tariff was complex and potentially a stick approach, » Residential and business reference groups to whereas our TOU model is a carrot. It is simple provide the customer perspective and it incentivises customer behaviour rather than » The right conversations about the right topics. penalising it.
40 We believe the approach has application across the sector and so too do the solutions as other States are rapidly following South Australia’s path to a high penetration of renewables and they will need to adapt their tariff arrangements to ensure they are the best fit for managing the transition.
We still have work to do in ensuring customers understand the changes to our tariffs and the options for them, but at least we now have a way forward that has been developed jointly. Leadership and transferability
Our early work for the 2025-20 TSS helped senior managers and our tariff experts to identify tariff setting principles with stakeholders, giving us all an anchor point for checking subsequent decisions to ensure consistency with overall objectives for tariff setting.
Our engagement on the 2020-2025 TSS provided a better customer outcome than previous approaches, which tended to involve a narrower set of stakeholders.
In particular, the recent engagement tackled a wider set of subjects than previous tariff setting discussions.
We were looking to tariffs as one of the levers to tackle serious issues emerging from SA’s rapid transition to a decentralised, low-carbon energy system.
41 emPOWERing You Trial
Project partners: » Smart Energy Water Project Description » Landis & Gyr TasNetworks is encouraging a customer led shift to time of use » The Lab network tariffs while maintaining predictable and sustainable pricing » Aurora Energy for all our customers. A key challenge of pricing reform in Tasmania has been the lack of detailed household electricity usage data to Project timeline: guide and support customers in making informed decisions about September 2016 to February electricity tariffs. 2019 In response, TasNetworks completed the emPOWERing You Trial, an Location: off-market advanced meter trial investigating cost reflective tariffs. Brighton Municipality, The trial gathered valuable information which has been used to refine Tasmania. our pricing strategy and help us support customers in choosing pricing structures which best suit their household and lifestyle.
Benefits to consumers
Tasmania’s cooler climate means it is difficult to apply research conducted elsewhere in the NEM. To allow TasNetworks and external stakeholders to understand how to support customers’ as we progress pricing reform, the trial set out to: » amass a database of detailed household socio-economic, demographic and electricity usage data » test customer understanding of the trial tariff » understand the motivations and barriers behind behaviour change » capture customer stories about behaviour change and cost reflective pricing » identify the communication methods and messages that were most useful in improving customers understanding of the electricity supply chain and cost reflective pricing » understand how to support vulnerable customers during pricing reform.
What did you set out to achieve by undertaking this project?
To support a roll out of cost reflective pricing, both TasNetworks and external stakeholders required a greater understanding of how Tasmanian customers in a winter peaking network respond to price signals.
42 Approach The trial learnings were shared not only with customers, but with various stakeholders including TasNetworks undertook an extensive stakeholder retailers, Government bodies and representative mapping exercise to ensure inclusive representation of groups. Sharing learnings throughout the trial both internal and external stakeholders. The mapping encouraged a united approach across Tasmania on exercise utilised TasNetworks Pricing Reform Working how to best support customers as we progress with Group (PRWG), an informed external stakeholder pricing reform and the findings revealed how we can group with a diverse range of representatives effectively work together across the supply chain to from the Tasmanian community1. By working with achieve this. the PRWG TasNetworks was able to identify and fully understand all stakeholders impacted and/or Benefits, results and outcomes interested in the trial and co-design a trial together. Analysis of usage data indicates that over 70 per The trial demonstrated its customer centric design by cent of trial participants would reduce their network the in depth engagement program which ensured a charges, even before behavioural change, if they diverse representation of customers, including those switched to one of the time of use network tariffs with language / literacy challenges. These strategies currently offered by TasNetworks. However, despite include: this positive result, the trial revealed that when customers lack trust in their retailer/network they are » monthly network bill comparison (see image one – sample of monthly network bill comparison) likely to disengage. » web-based portal and app (see image two – The trial revealed that customers find the electricity highest demands for the period being displayed as industry increasing complex and are seeking guidance shown in the app and portal) on their electricity choices from a trusted source, and » facebook group this can be achieved through networks. We found that » newsletters relationships can be fostered and trust can be built when networks are genuine with their interactions participant website » with customers. » welcome packs (see image three – sample of welcome pack) The trial has focussed on ensuring positive outcomes for all customers by drawing on a representative » drop in sessions sample of customers that will allow findings to be » focus groups easily extrapolated to the wider residential customer » telephone access base. Through testing various communication » an explanatory video. styles, by the end of phase two most participants understood the concept of time of use network TasNetworks completed 12 focus groups varying in pricing and this communication method can be age, gender, income, location, bill type and electricity applied to the wider Tasmanian community to help usage knowledge (self-identified). TasNetworks also our broad customer base transition to cost reflective completed 18 one on one interviews in participants’ network pricing. homes to ensure we engaged with customers who may not have been able to participant in focus The trial has delivered greater clarity about how groups due to; literacy challenges, mobility issues and TasNetworks and the electricity supply chain can work linguistic differences. together to support Tasmanians in understanding electricity pricing and how to manage their usage. Trial findings have allowed for fact based decision The trial aimed to partner with our customers to making when forming TasNetworks pricing strategy progress pricing reform together, leading to a shift and approach to network planning. Further, the in the market and the wider acceptance of time of learnings are shaping future engagement methods use tariffs in Tasmania. As a result of a dedicated whilst also supporting the evolution of TasNetworks and genuine process of relationship-building, both brand strategy. customers and various external stakeholders are largely supportive of TasNetworks playing a more active role in helping customers make more informed electricity pricing decisions.
1 Membership included: Tasmanian Council of Social Services, Tassal Limited, Nekon, Department of Education, Shelter Tasmania, Local Government Association of Tasmania, Hydro Tasmania, Aurora Energy, Tasmanian Renewable Energy Alliance, Hydro Tasmania, Tasmanian Farmers and Graziers Association, Basslink Pty Ltd, 1st Energy, Goanna Energy, Anglicare Tasmania, University of Tasmania, Department of Health and Human Services Tasmania, Tasmanian Chamber of Commerce and Industry, Australian Electric Vehicle Association, Woolnorth Windfarm Holding, Tasmanian Small Business Council, Council on the Ageing and TasWater.
43 Leadership and transferability TasNetworks CEO and senior leadership thanked more than 250 participants and their families for We found that the key learning to the successful their contribution to the trial, with several customers implementation of pricing reform is gaining the taking to social media to share their enjoyment of trust of our customers and becoming a trusted participants in the event and the trial overall. advisor. Initially, there was a high level of cynicism amongst our customers. Customers believed that The trial results reinforced the benefit of early any change to pricing arrangements would be to engagement with stakeholders to allow for outcomes their detriment. TasNetworks built a relationship with that meet both business and community needs. customers throughout the trial by piloting various The stakeholder mapping process utilised by this communication and engagement methods. This trust trial has been recognised as driving the successful is essential not only for the acceptance of pricing engagement with the community. Further, we found reform and remains at the forefront of TasNetworks that partnering with our customers and encouraging a moving forward. continuous feedback loop led to genuine interactions.
The emPOWERing You Trial embodies TasNetworks TasNetworks found that customers want guidance vision which places our customers at the centre of on their electricity choices from a trusted source and everything we do. that networks have the opportunity to provide that direction. This relationship provides the foundation for Throughout all stages of the trial, senior executives ongoing dialogue between customers and networks were actively involved in the project. A senior to support the progression of pricing reform for the manager was appointed as Project Sponsor and benefit of customers. TasNetworks CEO, General Managers and Board of Directors were regularly updated and fully supportive and engaged in the trial. General Managers and CEO Lance Balcombe have also had direct involvement in the trial by engaging with participants, recently at an end of trial celebration.
44 Perenjori BESS customer and stakeholder engagement project
Project partners: Shire of Perenjori Project Description
Project timeline: The township of Perenjori is classed as a reliability hotspot and has May 2017 – June 2019 experienced frequent power interruptions. Western Power installed a Battery Energy Storage System (BESS) to improve reliability and test Location: the new technology. Perenjori, 200km south east of Geraldton and 350km north of An engagement campaign was undertaken to educate, inform and engage Perth, Western Australia customers and stakeholders in Perenjori regarding the two-year trial. The engagement program included: » Events, engagement sessions and community newsletters » Telephone and email updates to key stakeholders including community and government representatives » Embedding a bespoke text message system to alert community when the BESS was operating and a power outage may occur » Responses to community-raised issues.
Benefits to consumers
The engagement was undertaken to educate residents and gather feedback about the project to inform the project development. We were also addressing a trust deficiency in Perenjori where locals were broadly sceptical of our commitment and ability to deliver reliable electricity supply.
Building support for the project had strategic importance because the BESS is a forerunner for other innovations that are required to achieve our business goal of transforming to a more flexible, modular grid.
The engagements aimed to achieve: » Improved customer experience » Behaviour change through text alerts » Customer and stakeholder understanding and support.
Benefits to customers and stakeholders include: » Early notification of potential outages, allowing customers to prepare » Access to senior Western Power staff to raise previously unidentifiedissues » Contributing to planning for next steps of the project.
Another benefit for the community was improved economic development in the region thanks to increased trust in power supply. 45 Approach » Transparent and customer-centric information − Through our consultation, we prioritised face- Stakeholders targeted for engagement included to-face engagement between stakeholders customers reliant on Western Power services in the and our senior leadership team to reduce any edge-of-grid community, their representatives and perception of “spin”, increase transparency, businesses. This included about 200 residents, Local and build trust. All events were timed to and State Government representatives, students, and include as many stakeholders as possible and major energy users including agriculture, retail and were held in accessible venues. hospitality businesses. − Taking an active, clear and transparent approach to explaining project challenges Internal stakeholders included senior leadership team and delays to community marked a positive members with accountability over asset management, step forward for our business. These activities a project manager, community engagement were developed in consultation with the Shire representatives, and front-line staff based at the Three of Perenjori which helped identify ways to Springs depot. improve inclusiveness and accessibility of the engagement with their residents. Our approach included three broad themes: The result was a very high subscription rate for » Text message alert system automated text message alerts - there were 92 − An automated text message system was subscribers to the text alert system in a community developed to alert community members when that has 93 identified customers and about 200 the BESS was operating due to a fault in the residents, a key indicator of success. poles-and-wires network. − This innovation was supported by a grass-roots A community satisfaction survey is planned to face-to-face engagement campaign and choice evaluate the engagement. of digital communication channels. » Participation by Western Power senior leaders − This demonstrated our commitment to the BESS project and built trust of our CEO and executive managers who attended community events in Perenjori. This also increased appreciation of customer needs within Western Power.
46 Benefits, results and outcomes The network “talks” to our IT system which sends messages automatically, providing customers and Benefits to customers and stakeholders from the stakeholders with real-time updates direct to their engagement included: mobile phone. » Empowering customers and stakeholders with advance notice of potential outages allowing them Western Power shared learnings about the project to prepare and avoid the shock of an outage; and engagement approaches widely through media, our website and industry conferences. We believe this » Giving customers and stakeholders some control will educate customers and network organisations to over power supply by providing education on how reducing non-essential power use when the BESS the power of positive engagement and benefiting a is operational can reduce or avoid outages; broader audience. » Having a say in next steps for the project. Lastly, addressing the trust deficit by engaging in an honest and open manner led by our most Our engagement program resulted in tangible senior leaders proved to be instrumental to project outcomes including: success. Western Power has first-hand knowledge » Load data indicates reduced power use by the of issues facing the community and customers and town in response to real-time text message alerts. stakeholders also have a better understanding of how The outcome is extended life of the battery and power is supplied to Perenjori and the challenges less time without power. associated with implementing cutting edge » A high subscription rate for text message alerts. technologies on an aging network. » Community feedback that will ensure in the Perenjori roadhouse (petrol station) is connected This project has shown that engaging customers to the BESS in the next step of the project. and stakeholders in a meaningful, open and honest manner from planning phase through to operation The strategy and activities put in place to inform and of new technologies improves outcomes for educate stakeholders and customers in Perenjori customers and the project proponent. Honest, timely provided a blue-print for future activities as Western communication about project delays has ultimately Power transforms from a poles-and-wires network to helped build trust. a flexible, modular grid. Engagement with customers and stakeholders will be The automated text message system developed for included from inception through to delivery of new the Perenjori BESS project will also be implemented in and emerging technologies as part of our network 2020 as part of the Kalbarri Microgrid Project. renewal.
47 Leadership and transferability Improved decision-making
Delivering an innovative technical solution in an This project has influenced decision-making by our edge-of-grid location offered a series of learning senior leaders as they experienced first-hand the opportunities. frustrations and challenges faced by customers and stakeholders in an edge-of-grid community, Tailored messaging alongside the organisational and technical challenges of integrating new technology in a remote part of the All engagement collateral distributed to customers network. and stakeholders in the community was co-created with the Shire of Perenjori to ensure suitability of The project demonstrated how trust can be messaging and delivery. This increased trust between rebuilt using an honest and transparent approach Western Power and this important stakeholder, as well championed by senior leaders. This increased “buy- as ensuring information was tailored to local needs. in” to the engagement and reinforced the role of engagement as a critical component of our overall Leadership team involvement strategy to modernise the network.
Executive Manager Sean McGoldrick led a team that Success of the Perenjori engagement has provided included senior operational, front line and community a blue-print for future engagements about network engagement staff in face-to-face community innovations - a challenge facing the whole energy engagement in Perenjori. Our CEO also attended past network sector. events in the town alongside the Minister for Energy.
Ensuring senior staff led face-to-face engagement improved understanding and trust between Western Power and our customers.
Aligning with our culture
Our commitment to taking a transparent, honest approach aligned with our cultural value “Be Bold”. The engagement also aligned with our cultural value of “Customer Focus”, for example through co-creating engagement collateral, carefully planning events at times and locations to maximise inclusion and ensuring involvement of our most senior staff.
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