THE CUSTOMER IS KING! Adam Lovell, Executive Director

Twitter: @admlovell

1. Collaboration • Information sharing and problem solving • On projects that are too big or expensive to do alone • Benchmarking (efficiency, process, activity)

2. Advocacy • Representing industry interests Federally • Influencing policy • International representation 3. Innovation • Filtering point for latest technology • New ideas from Australia and overseas • National urban water R & D strategy

WSAA’s central functions

OUTCOME 01 The most efficient, trusted and valued service providers in Australia.

OUTCOME 02 A compelling voice in national policy making.

OUTCOME 03 A valued partner in urban and land use planning to enrich communities.

OUTCOME 04 Providing stewardship of the urban water cycle.

International trends

• Customers • Affordability/viability • Liveability • Focus on technological

innovation

UK Case Study

• UK Ofwat Price Review 2014 • Most significant change in approach since

privatisation • Principles for Review:

Primacy of

company/customer

Relationship

Broad frameworks

and greater use of incentives

Risk-based review /

enhanced status/

self-assurance

Business to own plan/

Board assurance

Incentives: financial/

procedural/

reputational

Shift from

“ex-ante to ex-post”

UK - Ofwat Price Review Snapshot • Customers paying £3 billion less than proposed

in business plans

• 522 tailored performance commitments developed with customers

• 5% average drop in water bills over next 5 years

UK - Customer focus

• Price review framework with focus on customers

• South West Water and Affinity Water rewarded for their plans

• The most extensive customer conversation about outcomes they want now and in the future

South West Water

A multi-layered approach to customer engagement and research: 1. Understanding customers’ priorities 2. Presenting options and allowing customers to

choose 3. Waves – not just once or twice 4. Development of customer challenge groups

South West Water - outcomes

South West Water - effects

WSAA’s central functions Other challenges – the digital age UK example – South West Water

WSAA’s central functions Other challenges – the digital age

South West Water digital offerings • My Account –web services • WaterLive -real time mapping & BeachLive • Mobile app • Outbound SMS / voice • CRM • Meter Option Workflow • Billing System Upgrade

WSAA’s central functions Implications for Australia

Drought, water restrictions, reduced volume

Significant capital expenditure for water security including desalination

Significant price increases to fund security (on permanently lower volumes)

Affordability concerns

Reaction from regulators to limit further price increases

A common experience across utilities

Asset recycling, privatisation, discuss for water utilities

Using less paying more! Typical residential water and wastewater bill and water consumption

Water sector performance Figure 1: Proportion of complaints by sector 2012-13

Note: Latest Victorian data is 2011-12

Source: State Energy and Water Ombudsman annual reports

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

VIC NSW SA QLD

Electricity Gas Water

Proportion of complaints by sector 2012-13

Recent survey work

Recent survey work • More than one in four customers don’t

know who looks after stormwater • About 15% think they are paying for

stormwater when they aren’t • Less than half of respondents

thought their water utility had responsibility for sewerage

WSAA’s central functions Economic regulation report

Independent regulation – deterministic powers

Clear objectives

Stronger customer engagement

Incentives for productivity and efficiency

Revenue setting rather than price setting

Financial viability tests

Merit reviews

WSAA’s central functions WSAA customer work

• Customer and Industry Policy Committee • Customer Network • National customer survey • Customer indicators • Pensioner concession project • 2015 Ozwater stream on utilities, customers and

the digital age

WSAA’s central functions What needs to be done

• Customer driven water utility services • New National Water Initiative • Reform to economic regulation • Understanding and designing

market structure

How to find us

Twitter @admlovell @wsaa_water LinkedIn Water Services Association of Australia Web www.wsaa.asn.au