Customer consultation to the rescue?

Some of you will know that I’m not a big fan of revenue caps (sorry if I’ve bored you on that subject).  I think revenue caps isolate regulated businesses from their customers, with detrimental effects on internal culture, customer service and innovation.  I think an average revenue yield control is better.  But I lost that argument a long time ago.

Anyway… I have been somewhat depressed that revenue caps are being rolled out across all distribution businesses in the Australian National Electricity Market.

But at this month’s ACCC/AER regulatory conference there was a session on the United Kingdom water industry experience with customer challenge groups.  These are not the pantomime customer consultation efforts we know from Australia and New Zealand, when almost nobody turns up to advertised consultations, and most that do turn up push self-serving agendas.  Under the UK model, service standards, expenditure proposals and the regulated business’s rewards/penalties are bashed out between the business and customer representatives before they’re submitted to the regulator.

It seems to me that something like the UK customer challenge groups could be a vehicle for getting a real customer voice into the heart of network business’s decision-making.  This might even mitigate the downsides of revenue caps to the point that I can stop complaining about them.

Paul Webber