In November 2018, Essential Energy were the unanimous winners of the Energy Networks Australia and Energy Consumers Australia 2018 Consumer Engagement Award. Essential Energy’s work was deemed to be outstanding and industry best practice when it comes to consumer engagement, and we spoke to General Manager Strategy, Regulation and Transformation, Chantelle Bramley, about the extensive process the organisation undertook.
The Consumer Engagement Award related to the work Essential Energy undertook, over a two year period, to gather knowledge and insight from its customers to shape the proposal the organisation ultimately submitted to the Australian Energy Regulator (AER) for building, operating and maintaining its electricity network over the period 2019-2024, and the proposed network charges over the same period.
The engagement took place in four phases over a two-year period, and involved 20 forums with more than 3000 customers.
Ultimately, the program delivered a true understanding of the priorities and expectations of customers.
According to Ms Bramley, the seed for developing such a considerable engagement program was planted several years out from when the AER submission was due. There was recognition within the organisation that to make the submission process as smooth as possible, there would need to be significant customer input into the proposal Essential Energy ultimately put to the AER; and there was recognition a number of departments within the organisation would need to be involved in the engagement process.
“We recognised early that we needed to get customer input into the way that we were planning to manage and invest in the network,” said Ms Bramley.
“That was going to be vital for us, because we are a business that is looking to change and transform, and we wanted to get customer views on that. So we started to ask our customers some really big questions, like did they think the reliability of the network was good? Would they be prepared to pay for fewer power outages? Should we be investing in new technology to improve reliability?
“We identified a number of key, fundamental questions we needed customer input on, and we used multiple formats of engagement, from deliberative forums to interviews to surveys.
“And throughout the process we were very open and transparent. We invited consumer groups to come along and observe, and we invited the Australian energy regulator to come and be involved. People really saw that we were very committed to the process.”
Given the extent of the consultation, and the significant financial investment required from Essential Energy to deliver on what it aimed to achieve, it’s pleasing to learn that at a Board level, the business was committed to the process from the outset.
“Yes, it was an investment, but there is a much greater awareness, certainly in our Board and our executive team, on the need for network businesses to have a legitimate social license to operate and to invest,” said Ms Bramley.
“Particularly given the fact that this business is looking to do things differently, we needed to actually understand where consumers wanted us to go with this. As you can imagine, there are lots of different choices we could make, but unless we have some clear feedback from our customers about what they want us to do, we might actually go in the wrong direction.
“The other thing that I think gave the Board confidence was that the feedback wasn’t all about saying no, don’t change anything. Consumers were also saying, ‘We want you to invest here’. So having that feedback from consumers gave us the confidence to push for certain things with the regulator because we’d heard directly from the people that use our services.”
Incorporating feedback into planning
The depth of the engagement process required a significant investment in time to coordinate and gather all of the customer feedback involved; but this paled in comparison to the process of compiling and moulding all of the feedback into a strategic vision and plan that will best meet the needs of the majority of Essential Energy’s customers.
According to Ms Bramley, the help of external advisors was critical at this stage of the project. While their involvement began at the earlier stages of proceedings, in helping to develop objective, unbiased questions for customers that didn’t lead to particular answers, they also helped to document the feedback in a very coherent way, so that Essential Energy was left with a quality, standalone record of the engagement with their consumers.
“Then of course, you go through that document and you can see that people have different perspectives,” said Ms Bramley.
“And somewhere in there you’ve got to make a judgment call about what will drive the value for the majority of our customers, and still allow us to operate the network safely and reliably.
“But getting to know our customers better, helped us make those decisions, because we had a better feel for what was really important to them. Interestingly enough, there was a lot of consistency across our massive geography on what was important.
“I’m not saying it was all easy, there were periods where we really had to work through and consider if we could make certain changes and still manage the network effectively.
“But again, going through the process ultimately gave us the confidence to develop our report for the AER and say actually, this investment’s really important for our customers. Here’s evidence of that.”
The process of reviewing all of the compiled feedback also resulted in significant changes to some of the plans Essential Energy had already laid out for the 2019-2024 period, and was one of the key factors the company was commended for in winning the Consumer Engagement Award.
“One of the important elements of really effective stakeholder engagement is actually changing your plans in response to that feedback,” said Ms Bramley.
“Through the process we undertook, it’s clear that based on the feedback received, we changed our plans from what we originally said we would do.
“That was different, and at times, a little bit uncomfortable, as we thought about whether we could actually make some of the changes that were requested. Could we do that cost-effectively? How will that impact the business?
“We had to be prepared to work through impacts and assess whether we could still manage the network safely and reliably.”
Ms Bramley said that of all the learnings that Essential Energy was able to gather from the engagement process, two clear things stood out: the shared sense of community for all of their customers living in remote and regional New South Wales; and the fact that their customers genuinely did have a very keen desire to engage with the process of helping to design what their future energy network will look like.
“Our customers have a huge sense of community – not just for their own town or their region, but basically for anyone living outside of Sydney, Newcastle, and Wollongong,” said Ms Bramley.
“We would specifically say to people, ‘Look, we’ve got customers that live way out in the bush, and it costs us more to serve them. If we put their prices up, we could lower your peices. Would you be okay with us doing that?’ And on the whole, our customers wanted everybody to have the same level of service at the same cost.
“We were also surprised by how strong the desire to engage in the process was.
“You might think getting 300 people in a room to talk about energy is quite difficult – well actually, people really wanted the discussion.
“It’s true people just want the lights to work when they come into their home, but what I certainly took away was that you cannot underestimate the ability of people outside the industry to understand complex issues when you take the time and give them the information they need. Once they’ve got that information, they can actually make really good, informed decisions.
“I think we can get a bit lazy in our industry and assume customers won’t understand the trade-off between reliability and affordability. Well actually, they do. As long as you take a bit of time to explain it in clear, easy to understand language, they want to have the conversation. They want to feel involved in decisions affecting their communities.”
Aside from the obvious benefits the consumer engagement has realised in terms of the network Essential Energy will build for its customers over the next five years, the organisation has experienced a range of additional benefits as a result of the process.
“We might have started off this consultation process for a particular purpose, for the regulatory proposal, but it has become so clear that the value of this customer engagement in what it brings to the business is that it will now be an ongoing part of running this organisation. Because it is just so vital to understand what the needs and aspirations of these communities are, as we become that business of the future that is responsive and is able to live up to their expectations around what a network can deliver for them.
“It really has been the start of a whole cultural shift in the organisation. Now our people talk about not just what’s good from an engineering perspective, but also what’s good from a customer perspective.
“It’s actually been quite addictive. You go to these sessions and you start hearing this feedback, you hear things you hadn’t thought of, and you want to hear more.”
According to Ms Bramley, following such a significant period of getting to know their customers and their needs better, the next 12 months will very much be focused on making sure Essential delivers on its promises.
“This is a very tangible business in the sense of the day-to-day impact we have on their homes, their businesses, their farms,” said Ms Bramley.
“With that there is a great sense of excitement about the improvements we can make, but of course with that comes great responsibility too.
“So 2019 will be all about delivery. We’ll start to make the investments in our IT systems, start working through all the process changes that we need to make, start skilling up our people so that we can really deliver on those savings that we’ve put into our regulatory proposal, and which our customers want to see.”