Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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Policy & Regulation Safe and reliable All respondents scored safety and reliability as their best-performing RIIO output areas. These are time-honoured success stories for the energy networks. The electricity sector showed the greatest confidence in its reliability, with half of its respondents rating it as excellent. A third of gas respondents gave themselves the same rating. Scores for the remaining four primary outputs were strong with good or excellent ratings in the range of 59-76 per cent. The Scope of the research The aim of the research was to evaluate energy network companies' measures of the impact of RIIO. Utility Week and EC Harris, via researcher Insight Advantage, sent an online questionnaire to senior decision-makers (typically heads or directors of regulation, customers, and finance) in all distribution and transmission companies in gas and electricity. We had responses from 27 senior individuals representing transmission and distribution companies in Britain's gas and electricity sectors. Respondents were guaranteed confidentiality. Consequently, all responses are reported in aggregate only, and all quotes from survey respondents are anonymous. Weak connections The lowest outputs score was for connections. About 15 per cent of all respondents gave low ratings to their operations in connections. This was more pronounced in the electric- Companies are very confident on rating their safety and reliability outputs. on a scale of 1 to 5, confidentially, how would you rate your company today on the six RIIO output categories? 100 22% 30% 80 60 37% 26% 34% 33% 44% 37% 26% 33% 0 Connections 1: Very poor 11% Social 15% 22% 12% 4% 20 Customer service 22% 2 4% Environmental 3 4 two thirds are claiming advanced improvements in customer service. On a scale of 1 to 5, how advanced are your company's improvements in customer service towards fulfilling expectations under RIIO? 19% 22% Reliability Safety 5: Excellent 32% 41% 23% 1: Very early stages 2 3 4 5: Very advanced on a scale of 1 to 5, confidentially, how would you rate your company today on customer service 11% 1: Very poor 22% 2 33% 3 14 | 24th - 30th January 2014 | UTILITY WEEK 34% 4 5: Excellent RIIO's focus on customer engagement is arguably the biggest change of the new regime, taking networks into unchartered territory. Under RIIO, "customers" means householders and small businesses as well as the conventional network customers – suppliers, generators and heavy industries. As noted in the previous section, respondents identified meeting customer service requirements as the greatest risk introduced under RIIO, with three out of four respondents admitting it was high risk. The industry seems to have acted to mitigate this risk. We asked respondents how well prepared they were for the new requirements around customer engagement. The response suggested that much work has already been done, with two-fifths replying that their organisation was "advanced", and a further quarter claiming to be "very advanced". Innovation We asked respondents to rank the importance of innovation for six key business areas: connections, social, customer services, environmental, reliability; and safety. We also sought their views on what role smart technology would play in innovation. 4% Customers Confidence Respondents also demonstrated confidence in their customer service as it stands. One in three respondents would give their customer service a five out of five rating today, and the same amount again would award themselves four out of five. This confidence was greatest among gas distribution network operators and electricity transmission respondents, and lower among electricity distribution network operators, with some notable exceptions. David Smith, chief executive of the Energy Networks Association, suggested this may reflect the earlier start transmission and gas distribution businesses had with RIIO, giving them more confidence at a time when electricity distribution networks are just beginning the process. 78% 48% 33% 40 ity sector, where half the respondents gave their organisation medium to low scores on their performance in connections. In contrast 78 per cent of gas sector respondents rated their organisations' performance as good or excellent. Innovation everywhere All respondents forecast in overwhelming percentages that innovation was going to play a significant role in each area. Commenting on the findings, Ofgem senior distribution partner Hannah Nixon said they reflected a "new dynamism" in the sector, and praised network businesses for their positive response to various funding initiatives around low carbon networks.