Utility Week

UTILITY WEEK | 13TH - 19TH SEPTEMBER 2019 | 17 Policy & Regulation Analysis E nvironment champion Lord Deben believes utilities must connect far more with their customers if the sector is to play its part in halting climate change. Speaking ahead of Utility Week's New Deal for Utilities Debate this month, the chairman of the Committee on Climate Change (CCC), which called on govern- ment to set a 2050 net zero target for carbon emissions, said influencing future customer behaviour is now vital. Yet before industry can hope to persuade consumers of this, he believes it must work far harder at engaging with them. "Utilities have an important role and an important connection with the customer, to explain to them why they are doing things and why cer- tain things are better than other things. "In other words, they are a very impor- tant communications channel." Hot topics The two key discussion areas at the West- minster debate will be climate change and trust. The first will explore how net zero is the new challenge for utilities, impacting operations at every level. The second, fair- ness and trust, will look at how industry might reverse the dim, populist view plagu- ing the sector, which has allowed the nation- alisation debate to gain traction. Lord Deben said that while many del- egates will be expecting him to home in straight away on climate issues, his initial mes- sage to utilities will be about deliver- ing better customer engagement and service, without which there is little hope of getting people onboard for the crit- ical decar- bonisation journey ahead. "That is the fundamental issue. If you can't get your connection right with your customer, then not only does that do you harm, it also means you can't do for me what I want you to do – which is to help your cus- tomer understand about climate change. Because they haven't got a connection with you, except one of annoyance." Launched in January, Utility Week's eight-week New Deal for Utilities campaign explored the myriad challenges facing the sector today, including: political and regula- tory uncertainty; the growing spectre of pub- lic ownership; rapid technological change; and low levels of public trust fuelled by pol- lution, leakage, high levels of executive pay, and shareholder dividends. The campaign asked what utilities could do to repair their damaged image, tell their story and better share rewards to forge a new social contract with consumers. It resulted in a submission to the National Infrastructure Commission's review of regulation, and also revealed what industry would need from reg- ulators and policymakers in return. Questions of trust Lord Deben will also ask why the public tends to trust water companies more than energy suppliers. "Given that the water com- panies, many of them, haven't got much of a story to tell in terms of the way in which they have handled their dividends, given that, it is remarkable. "I tell you simply why it is, it's because if I ring up my water company, I get an answer. If I ring up whichever energy company we are now with, I don't get an answer – at least I don't get an answer within the time I am prepared to hang on for." Accepting that utilities could also do more to shout about the positive things they do, Lord Deben countered: "Yes, but if they do... it is in a context in which they are not trusted. So, you have to regain trust." On why the nationalisation argument is gaining ground, including regarding net- works, he said: "Simply because we've got a leader of the Labour party who's announced it. It's not realistic, except that he would do it. But it's not realistic. It's nothing to do with solving problems." So why, then, are people listening? "We've got a generation of people who have not experienced nationalisation, so they don't know what it's like when things are nationalised. They've got nothing to compare with." He says the network companies are in fact "rather good" but largely unknown to the public, which thinks of the entire energy sector in terms of the big suppliers. "So, when somebody says we'll put it all right by nationalisation, if you've never seen nation- alisation, well then that goes down well." Acknowledging that infrastructure will be a major factor if utilities are to be at the fore- front of the charge for decarbonisation, Lord Deben called on the sector to do more to take the lead. "At the moment the industry looks like an organisation which has things done to it, and that's an important difference. That is why I want them to become much more proactive. "When you're proactive, people begin to realise that you are actually doing a good job, instead of looking as if you are sitting there and every now and again the govern- ment does something, or the infrastructure commission produces something, to you. "I am very much looking forward to the debate." A full interview with Lord Deben will be run in the next issue of Utility Week Deben: the customer factor Utilities must work harder on relationships with customers if they are to take them on the net-zero journey, chair of the Committee on Climate Change Lord Deben tells Suzanne Heneghan. • The New Deal for Utilities Debate, chaired by Utility Week editor Suzanne Heneghan, is on Wednesday 25 September at RICS, Parliament Square. Joining Lord Deben on the panel are Ofwat chairman Jonson Cox; Phil Jones, chief executive of Northern Powergrid; Michael Lewis, chief executive of Eon UK; and Kerry Scott, global practice leader for social inclusion at event sponsor Mott MacDonald. For more details of the debate and campaign, visit www.utilityweek.com/newdealforutilities

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