mark henley - uniting care australia - unpacking the language and practice of consumer engagement

Collec&ons  and  Hardship  Forum  

Consumer  Engagement    (Focus  Energy  Industry)  

Mark  Henley  MarkH@uni.ngcommuni.es.org  

Ph  0404  067  011  

Context  

What’s  the  Issue?  

80

90

100

110

120

130

140

150

160

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Inde

x 19

90–9

1 =

100

Sydney Melbourne Brisbane Adelaide Hobart Canberra

Retail  Electricity  Price  Index,  1991-­‐2010  

U&li&es  Costs,  SA  

75  

100  

125  

150  

175  

200  

225  

250  

Inde

x  

CPI  Electricity  

CPI  Gas  

CPI  Water  

CPI  All  Groups  

Energy  –  Australia,  by  income  decile  

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1 2 3 4 5 6 7 8 9 10

Housing  +  Energy,  Aust,  Income  decile  

0%

10%

20%

30%

40%

50%

60%

70%

1 2 3 4 5 6 7 8 9 10

Financial  Stress,  U.li.es  

0  

5  

10  

15  

20  

25  

Q1   Q2   Q3   Q4   Q5  

%  Unable  to  pay  electricity,  gas,  phone  on  &me,  by  income  quin&le,  2002,  2006,  2010.  Australia.  GSS  

2002   2006  

2010  

Why  Consumer  Engagement?  

Later  2012,  Na.onal  Ac.vity  Many  Processes,  many  submissions,  liTle  sleep:  •  Energy  White  Paper  •  Produc.vity  Commission  •  AEMC  Rule  change  re  Network  Regula.on  •  Senate  Inquiry  •  Review  of  Limited  Merits  Review  •  Power  of  Choice  •  COAG  statement  •  Na.onal  energy  consumer  advocacy  body  •  Energy  Efficiency  programs  (not  Greenstart),  HESS,  LIEEP,  etc.  Maybe  NESI  

For  Example  • “the  overarching  objec0ves  of  the  regulatory  regime  is  the  long  term  interests  of  customers.  This  objec0ve  has  lost  its  primacy  as  the  main  considera0on  for  regulatory  &  policy  decisions.  Its  pre-­‐eminence  should  be  restored  by  giving  consumers  much  more  power  in  the  regulatory  process”  (p  2)  Produc0vity  Commission  

Key  Themes  

• Greater  Consumer  Engagement  needed  in  regula&on  

•  Aspects  of  Market  not  working  ‘in  best  long  term  interests  of  consumers’  

• Major  focus  on  Network  regula&on  

– New  Rules  – AER  to  use  it’s  powers  more  effec&vely  

– Merits  Review  process  needs  change  

So  What  is  Consumer  Engagement?  From  “Community  Development”  

• Community  engagement  is  “people  working  collabora0vely,  through  inspired  ac0on  and  learning,  to  create  and  realize  bold  visions  for  their  common  future.”  (Tamarack,  2003)  

• “Community  engagement  refers  to  arrangements  for  ci0zens  and  communi0es  to  par0cipate  in  the  processes  used  to  make  good  policy  and  to  deliver  on  programs  and  services.”  (Queensland  Government)  

Economics  Consumer  Sovereignty    •  Consumers  influence  the  produc0on  decisions  of  (efficient)  firms  by  vo0ng  with  their  spending.  

•  So  consumer  engagement  here  means  that  individual  consumers  know  what  they  want,  are  fully  informed  about  market  choices,  and  are  able  to  get  what  they  want  by  ac0vely  engaging  in  the  market  through  their  spending  decisions.  

From  Law  

• “Advocacy  is  the  act  of  speaking  on  the  behalf  of  or  in  support  of  another  person,  place,  or  thing”.  

Advocacy  and  Consumer  Engagement  tend  to  be  linked  in  Energy  Advocacy  (and  Other)  debates.  

Public  Par&cipa&on  

• “public  par0cipa0on  is  a  process  to  make  beQer  decisions  that  incorporate  the  interests  and  concerns  of  all  affected  stakeholders  and  meet  the  needs  of  the  decision-­‐making  body.”  

Think  about  these  5  ‘aspects’  

• Inform  

• Consult  • Involve  • Collaborate  • Empower  

Synonyms    • Partnership  • Collabora&on  • Mutuality    • Empowerment  •  Interdependence  

Consumer  Engagement  is  TWO-­‐WAY,    between  EQUALS  

Benefits  of  Energy  Consumer  Engagement  •  Informed  consumers;  this  is  an  essen.al  condi.on  for  effec.vely  compe..ve  markets.  

•  Conflict  resolu.on;  between  consumers  and  energy  companies  

•  Drivers  of  market  efficiency.    – “Specifically,  the  Panel  considers  that  a  greater  focus  on  the  long-­‐term  interest  of  consumers  opens  up  greater  possibili.es  for  the  development  of  stronger  incen.ves  for  NSPs  to  be  dynamically  efficient.”    (Limited  Merits  Review)  

•  Mee.ng  regulatory  requirements;    •  Promote  consumer  welfare;    

Nature  of  Consumer  Engagement  

• Heterogeneous:  (Not  all  consumers  are  the  same  or  think  the  same)  

•  Itera.ve:  Not  everything  will  work  • Messy:  different  views  and  complex  issues  means  it  will  get  “Messy”  

• Trust  Building  (where  this  is  ‘goodwill’)  • Mul.-­‐layered  

Energy  Consumer  Engagement  Hierarchy  

What’s  needed  to  make  Consumer  Engagement  work?  

• Goodwill  on  both  sides  • Small  steps  first,  build  trust  • Learn  as  we  go  • Learning  about  each  other  • Making  mistakes  • Integra.ng  Consumer  Engagement  into  every  aspect  of  business  

• Consumer  resourcing  

What’s  needed  to  make  Consumer  Engagement  work?  

TRUST,  TRUST,  TRUST