The recent Utilities Week Consumer Vulnerability & Debt Conference in Birmingham looked to address the pressing issues of rising fuel poverty and vulnerability, particularly in the context of the ongoing energy transition. Impact Research (Guto Hunkin and Maliyana Limbu) went along to find out more.

This is the second of a two-part blog, focussed on communications and water tariffs (see here for the first part of the blog, which is focussed on vulnerability: Our key take outs Part 1)

5. Water tariffs

In the first part of the blog, we talked about how PSRs are under review. However, it’s not just PSRs; social tariffs and indeed wider water tariffs are also under review. The Rt Hon Caroline Flint called for more openness about the costs of social tariffs, and while there is a role for social tariffs, there also needs to a discussion about their form and about how these tariffs are financed. This is an area in which Impact has been active, by helping water companies evaluate customers’ views about social tariffs and their willingness to pay for those social tariffs, and by how much.

There is also likely to be a crucial role for primary research to evaluate charging trials: Emily Bulman of Ofwat explained how Ofwat has provided the regulatory framework which will allow water companies, with the support of the Consumer Council for Water (CCW), to run charging trials. Water companies will need to adhere to three good-practice principles to ensure that trials are a) carefully planned and designed, b) engages and supports customers, and c) maximises learning by disseminating learnings from the trial with CCW and other water companies.

There should be a key role for primary research across all three aspects of these principles, and Impact would welcome the opportunity to work with water companies for the successful evaluation of such trials.

The first of these charging trials is in fact already underway. Lucy Hurst of Affinity Water introduced their “WaterSave” trial which was launched in October this year. The two-year trial, which will compare a trial group in Stevenage with a control group, will evaluate the effects of a rising block tariff (whereby water usage gets progressively more expensive the more you use it) on affordability and on usage.

This is one example of how water companies, and indeed the wider utility sector, is aiming to reduce consumption to help future resources. As James Wallin (editor at Utilities Week) neatly summarised, the utilities sector is unique compared with other businesses; “We are a business who are trying to sell less to its customers”. Similarly, during the day, we heard about the importance of decarbonising homes and delivering energy efficiency, with decarbonising homes seen to be as important now as addressing power generation; however, Dhara Vyas of Energy UK stated that it is important that people in vulnerable circumstances are not left until the end in the race to energy transition.

IMPLICATIONS: The water charging trials are an ideal opportunity for water companies to test and evaluate new charging models to determine which ones are the most effective in terms of delivering affordability and in addressing key issues such as demand. It will be vital that charging trials are evaluated robustly through independent and trustworthy research, and for the findings of trials to be disseminated more widely across the sector. Further, could the energy sector learn from the water sector and adopt similar type charging trials to test impacts of tariffs on decarbonization?

6. Proactive and tailored communications

The sustainability issues discussed above will require engagement with customers, although a couple of speakers raised concerns about now being a difficult period to engage with customers on such issues due to the current negative reputation and lack of trust in water companies and wider utilities.

Given this, it will be vital to ensure that any engagement and communications are effectively delivered. Whatever, the reason for contact, it’s important to maximise on each engagement opportunity, or as Andy White of CCW stated; “Make every contact count”.

However, as Emma Merritt of SSEN explained, utilities should no longer be reactive and simply rely on crisis (such as storms) to be the sole point of contact with their customers. There needs to be greater proactivity, along with a mix of direct customer engagement and engagement through a network of partners. James Hawthorne of Ofwat echoed the need for proactive engagement with vulnerable customers, along with accessible engagement and identifying the needs of vulnerable customers (and then tailoring comms according to those needs).

Similarly, Scope suggested some solutions to the barriers which may prevent disabled people from contacting utilities; i) tackle inaccessibility by providing a range of contact options and test the design of those options with disabled people, ii) address poor phone lines by removing background noise or crackling, and iii) increase understanding by training staff and raising disability awareness.

IMPLICATION: Maximise the impact opportunity that each point of contact provides and make every contact count. However, don’t rely on contact and on crisis; instead, it is important to proactively engage with vulnerable customers (and indeed customers and stakeholders in general), be accessible, and tailor your engagement according to individual needs.

Next:

To read the first part of this two-part blog, and learn about vulnerability and support services, please click here: Our key take outs Part 1

For more information on the issues discussed in this blog, please contact Impact to discuss how we help utilities in their efforts to support vulnerable customers, to evaluate initiatives such as social tariffs, and to test the effectiveness of their communications.