CEO statement to the Energy Charter Accountability Panel

16 October 2019

16 October 2019

As a proud inaugural signatory to the Energy Charter, Essential Energy submitted its first Disclosure Statement to the Energy Charter’s Independent Accountability Panel on 30 September 2019.

After reviewing the statement, along with those of the 17 other signatories, the Accountability Panel conducted interviews with members of the Energy Charter’s CEO Council in October 2019.

Below is the opening statement by John Cleland, CEO of Essential Energy, who was interviewed on 14 October 2019.

CEO statement to the Energy Charter Accountability Panel

Essential Energy recognises that electricity is a non-discretionary purchase and a critical enabler of economic activity.

We further recognise that the industry in which we operate is undergoing a fundamental transition (decarbonisation, decentralisation and digitisation) that is inevitable and which, in time, will result in lower cost, more reliable and less carbon intensive energy.

However, to date, the transition has not played well for customers in terms of the cost or reliability of electricity. The Australian Competition and Consumer Commission (ACCC) has identified that electricity prices increased by approximately 56 per cent in the 10 years to 2017, while the reliability of the overall system has declined.

No single industry participant is responsible for the increases in prices or reductions in reliability, and no single industry participant operating alone will resolve it. The cooperation and collaboration implicit in the Energy Charter is critical to better managing the transition and achieving far better outcomes for customers going forward.

Essential Energy has a critical role to play across our distribution area of regional, rural and remote New South Wales. The approximately 3,000 dedicated and highly skilled people operating our network serve and support approximately 855,000 connected residential, commercial and industrial customers and some 670,000 jobs.

Since July 2016, we have placed far greater emphasis on our customers and have refocused our commitment to customer service through a dedicated Customer Connected Program comprising segmentation, research and analysis, extensive consultation and education. It has become abundantly clear that there is much more we need to do in understanding, engaging with, and meeting the objectives of our customers.

Our Customer Commitment Statement – endorsed by our Board, and signed and supported by our senior managers – requires every Essential Energy employee to listen to and respect our customers, safely deliver on our promises and place customers at the centre of everything we do.

In measuring our performance against Energy Charter principles, our perspectives have broadened; we acknowledge that we are at the beginning of our journey, and there remains huge opportunity and imperative for improvement.

For example, we have identified specific gaps in customer experience for:

  • councils with Essential Energy streetlighting service levels
  • developers, their Accredited Service Providers and electrical contractors experiencing delays and complexities in connecting to our network
  • customers seeking to directly communicate with us, particularly in time of service interruption.

We are working to address these.

We’ve also recognised that consultation with our customers and stakeholders is critical to ensure our network investment and operations remain aligned to their evolving needs.

Through an award-winning program of consultation around our 2019-24 Revenue and Pricing Proposal, our customers told us that power supply safety, reliability and affordability are their key priorities. We are proud of what we have done to improve our performance in these areas over the last five years, but there is much more to do.

Our whole-of-business Transformation Plan is delivering network charges that today are 40 per cent lower than in 2014, and account for approximately 37 per cent of the average electricity bill.

We aim to achieve a further 8 per cent reduction in real network charges from 1 July 2019 to 30 June 2024.

Our organisational Investment Value Framework takes power supply reliability, safety and bushfire risk into consideration as part of business decisions, and is helping us continue to exceed independently audited reliability requirements, with network reliability more than 30 per cent better today than 15 years ago.

Working towards continual improvement, we’re developing a new Customer Experience Strategy that will, through ongoing direct interaction with our various customers’ categories, map the current customer experience, identifying opportunities to improve service delivery for all customers.

We’re proactively collaborating across the energy industry with regulators, retailers, technology suppliers, industry groups and public interest advocates to understand the impact of changing customer expectations on generation and distribution, but we have a lot more to do to address cross supply chain issues and achieve better outcomes for customers.

We’re also engaging directly with customers to support their increasing choices in individual, community and peer-to-peer electricity generation and usage.

As a committed signatory to the Energy Charter and through reporting Charter’s principles, we will be better positioned to:

  • understand current performance levels and areas for improvement, benchmarked against our industry peers
  • ensure we remain focused on and accountable for improving customer service and experience
  • learn from other industry participants’ experience
  • implement changes in corporate culture and operations that will benefit our customers in the future.

We are proud of our commitment to the Energy Charter and look forward to working collaboratively across the industry to achieve much improved customer outcomes. We are also pleased to be here today and look forward to the opportunity to discuss our Disclosure Statement in more detail.

Thank you.

Find out more

Listen to our CEO’s interview with the Accountability Panel on the Panel’s website
Read our Energy Charter Disclosure Statement, for January to June 2019
Read more about our engagement with the Energy Charter