Utility Week

22 | 2ND - 8TH FEBRUARY 2018 | UTILITY WEEK Customers Conference Utility Week Water Customer Conference Wednesday 17 January, Birmingham Keep it simple for customers PR19 was front of mind at Utility Week's Water Customer Conference, but delegates were also keen to discuss the first nine months of the non-household retail market. Lois Vallely reports. P R19 will dominate everything in the water sector in 2018. It was fitting, therefore, that the first speaker at the Utility Week Water Customer Conference, sponsored by Oracle, was Ofwat senior director John Russell, who provided an update on the regulator's vision for the next price review. Ofwat has been vocal about its high aspirations for PR19, and Russell's speech repeated previous warnings that the regu- lator will be tougher and performance commitments more stretching – "building on the good work" done in PR14. Ofwat expects companies to develop their plans through "active customer participation", and set ambitious performance commitments that reflect customer priorities. For companies that really impress, the rewards will be plentiful. But for companies that don't measure up, severe penalties await. Not everyone agrees with this approach, with some arguing it rewards companies for doing the basics. Speaking as part of a panel discussion, Consumer Council for Water chief executive Tony Smith said the organi- sation had concerns about the incentives for the operational measures, because research has unveiled "a great deal of negative feel- ing" from customers about companies receiv- ing rewards for "doing the day job". "We absolutely understand what Ofwat is trying to do," he said. "But the issue is trying to get customers on-side." Welsh Water chief executive Chris Jones agreed that customers struggle with the idea that they pay more so that companies deliver "a less bad service". "As a concept, that is difficult for customers," he said. To be more aspirational, and deliver nota- ble value to customers, it was agreed water companies need to keep things simple, but work on making operations and customer "touch points" more joined up. "[We need to think about how we can] change the businesses that I know we all care massively about to make life easier for the customer," said Sarah Bentley, chief cus- tomer officer at Severn Trent. The focus of the conference may have been largely on the imminent price review, but not everyone agreed that regulation should be front of mind. United Utilities customer service director Louise Beardmore delivered an impassioned speech in which she said the water industry is "too preoccu- pied with regulation". "Regulation is there to protect customers if we're not doing what we should do," she said. "But I'd encourage you to rip up the rulebook, and stop being obsessed with regulation." Current regulation states that a written complaint must be responded to within ten days. Beardmore questioned why an angry customer should have to wait "just because the regulator says you've got two weeks". "That's lazy, and that's not customer-service- focused," she insisted. Another faction of the conference that was less concerned with PR19 machinations was the new non-household water retail market. Steve Arthur, director of market per- formance at Market Operator Services Ltd (MOSL), questioned how long we will be able to refer to the market as "new", before going on to reflect on how the first nine months had gone. He suggested "more work could have been done" to raise awareness of the market before it opened. Arthur conceded that the market is "grow- ing in confidence", but said "more needs to be done" to raise its profile among custom- ers. "This is not a retailers' market, it's not a wholesalers' market, it's a customers' mar- ket," Arthur added. Wave head of customer experience Lissa Balmer agreed, saying the market should genuinely benefit customers. She insisted water retailers still have "a lot to learn" about customer loyalty. "We've got so many great advocates across other industries and we shouldn't be afraid to look outside the water industry. This is a new market, why shouldn't we take best practice from other industries?" Ofwat's Russell said the regulator can- not predict how the market will develop. "It may develop in a number of different ways, depending on the preferences and behaviour of a wide range of market participants," he said. However, the early signs are "positive".

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