Perception relies on trust, which although multi-faceted, depends upon governance, ownership and a demonstration of how companies are delivering on a wider purpose beyond the pursuit of profit. This topic has recently gained momentum in the UK and internationally. UK regulators across the utilities sector are asking privately-owned companies to demonstrate social value and legitimacy, and ensure that the services they deliver reflect what consumers want and are willing to pay for.
Consumer engagement has played a vital role in price reviews in the past decade. More recently, as part of the 2019 Price Review in the water sector and the RIIO-2 price control reviews in the energy sector, regulators have put even more emphasis on how companies interact with their consumers. For instance, Ofwat has introduced the concept of ‘social contracts’ while Ofgem has created the Consumer Challenge Groups and will hold Public Hearings as part of RIIO-2. Similar types of challenge groups have also been used in the transport sector too. Increasing the legitimacy of utility companies in the eyes of consumers requires more than demonstrating consumer value; it also encompasses consumers’ willingness to pay. Reflecting direct feedback and participation from consumer champions in the price review process is an important part pillar to build consumer trust.
Whether you are:
- a private company looking to quantify the social impacts of your portfolio of activities;
- a regulator trying to encourage companies to deliver social value; or
- seeking support to design and evaluate regulatory systems that involve a consumer voice,
Contact CEPA to learn more about how we can provide the analysis and techniques to help bring that consumer voice and legitimacy to your activities and regulatory proceedings.
Examples of our work in this space include:
- Supporting the UK water companies, through the industry research body UK Water Industry Research, with the development of a measure of water poverty.
- Reviewing Sydney Water’s current customer engagement processes.
- Supporting the Northern Ireland Utility Regulator (UR) to develop its first Residential Consumer Insight Tracker (CIT) which explored a range of issues with residential consumers including preferences, behaviours and attitudes to inform the UR’s consumer protection and engagement strategy.
- Supporting National Grid, on a secondment basis, to develop methodologies for valuing the benefits to consumers of their activities. This work fed into the system operator’s new regulatory framework developed by Ofgem.
- Supporting the Ireland’s Commission for Aviation Regulation (CAR) to review consumer engagement techniques used by other regulators, and to recommend options for effective passenger engagement within the context of the 2019 charge determination for Dublin Airport.