Energy regulator wants to incentivise good customer service

AER, lockdown

The Australian Energy Regulator (AER) has released an Issues Paper seeking stakeholder comments on a Customer Service Incentive Scheme. The scheme would reward distributors for improving customer service, and penalise distributors for poor customer service.

AusNet Services developed a proposed scheme with its Customer Forum as part of the New Reg trial. The New Reg trial is a joint initiative of the AER, Energy Consumers Australia and Energy Networks Australia.

The Issues Paper seeks stakeholder views on the merits of developing such an incentive, and on some key design elements of the potential incentive. These include the method of calculating rewards or penalties, performance parameters, and how best to use third party information.

Related article:Energy networks granted access to DMIS

Under the current framework, distributors are incentivised to improve customer satisfaction by the Service Target Performance Incentive Scheme (STPIS). The Customer Service Measure in this scheme provides rewards or penalties depending on the proportion of phone calls distributors answer in 30 seconds.

The Customer Forum found evidence that AusNet customers would value a higher level of customer service than they were currently receiving. They also found that, while AusNet had responded to the incentives available in the regulatory framework, these incentives were too narrowly focussed.

Related article: Why energy providers can’t fail at customer experience in 2019

The AER said, “We currently consider that our understanding of the value of customer service is underdeveloped, and that the current STPIS provision does not assist us with gaining more insight about customer preferences. This makes it difficult to resolve the issue. However, new measures risk providing money to distributors, without providing value for customers.

“We are therefore open to stakeholder views regarding what approach will give us the best information long term regarding how distributors respond to satisfaction incentives.”

Stakeholders are invited to provide comments on the Issues Paper, which can be found here, to regulatoryinnovation@aer.gov.au by August 19.