With the news that Energy Consumers Australia’s inaugural CEO Rosemary Sinclair is departing after five years in the top job, we talk with her about the organisation’s achievements and vision at a time when engagement with the consumer is of paramount importance in the industry.
You were the inaugural CEO of Energy Consumers Australia and have been for five years. What have been the key achievements in this time?
It has been a real privilege to help steer the establishment and growth of Energy Consumers Australia in its first five years from a new idea to an influential national voice on behalf of energy consumers.
I’m immensely proud of our achievements in embedding consumer experience and expectations for better into the fibre of the energy sector–in everything from governments’ and regulators’ decisions, to the industry’s commitments to culture change and reform under the Energy Charter, to the growing focus on innovation as a better way to meet customers needs.
It always seemed to me that this was fundamental in the energy sector–a need to elevate the consumer voice and view of the world to drive better outcomes.
I have enormous confidence that the conversations we’ve lifted into the national debate around energy affordability, trust and confidence will continue to be prosecuted with vigour by Energy Consumers Australia.
What does the CEO role at Energy Consumers Australia involve?
Energy Consumers Australia is a small, agile organisation, which means the CEO role is incredibly exciting and diverse. There are a lot of stakeholder meetings and Energy Consumers Australia works incredibly hard to build a robust evidence base about what consumers say and want to inform that engagement with decision makers and the wider sector.
One of the unique things about the organisation is that it sits in on meetings of the COAG Energy Council, which was a very good decision by government to ensure the consumer voice is ‘at the table’ when decisions that affect them are being made. Being well prepared to contribute at forums such as these is critical, and I have had a wonderful team that supported me with policy briefings and evidence of the consumer view.
There is also quite a lot of media work involved in the role, which is important because the reality is that the public debates do impact on how decisions are made, and Energy Consumers Australia needs to make sure the consumer voice is shaping those discussions.
The thing that holds all of the CEO’s work together is Energy Consumers Australia’s mission to carry the consumer voice into the policy, regulatory and industry discussions that have the potential to improve outcomes for consumers—particularly in terms of making energy more affordable, which is the over-riding issue for most consumers.
How does Energy Consumers Australia engage with the community on the ground level to gauge their ideas and represent their voice?
The organisation is really conscious of the responsibility it has to properly and effectively represent consumer views—and of course those views are diverse just like the community itself.
Energy Consumers Australia runs the largest piece of research on energy consumer attitudes in Australia—the Energy Consumers Sentiment Survey—which includes more than 2500 household and small business consumers. The survey tracks consumer satisfaction, confidence and engagement every six months. It also facilitates structured online consumer discussion groups that deepen the analysis from the survey.
Energy Consumers Australia recognises that you have to experience people’s world to really ‘get it’, so there’s a Community Listening initiative, where different type of community is chosen every six months where staff meet with community leaders, businesspeople and everyday household consumers in those places. Most recently, Energy Consumers Australia visited the communities of Mount Isa in Queensland, the Northern Rivers in NSW and also Ballina, but we’ve criss-crossed the country in recent years and it really provides a grounding and context for the work we do.
One of the things you learn from all of this engagement with consumers is how diverse their views are, but there are some very clear themes that emerge as well. It is very common for people to be concerned about affordability, which makes sense after a decade of big price increases. But there’s also a lot of talk about the need for a more individualised and tailored approach to providing energy services especially with the amount of technology becoming available.
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What do you think were some of the most positive developments were in 2019?
Energy Consumers Australia is really pleased with the establishment of the Energy Charter, which is the industry-led initiative to deliver more affordable power to energy consumers and the Independent Accountability Panel recently made a very thorough and accurate assessment of where this initiative is up to.
The idea of the Charter was to recognise there was a problem in terms of the level of trust and confidence consumers have in this sector. The reality is that these issues of trust are mostly driven by a failure to deliver services at what consumers think is a reasonable price, but they also revolve around issues like transparency, accountability and the need for the consumer voice to be far more central to decision making.
The Charter is an opportunity to win back the trust of consumers over time by delivering the outcomes they are seeking—starting with the threshold issue of more affordable power.
The Independent Accountability Panel that oversees the Charter work has essentially said there are some very good initiatives aimed at driving down the cost of power, but we need to see more. And they rightly identified the need for companies to report on the new initiatives and actions they’ve taken above and beyond what’s required by regulation and do so in a way that enables comparison across the signatories so that best practice can be acknowledged and shared.
Obviously this first year of the Charter was mostly about getting things in place for the future, but in the next report, Energy Consumers Australia will be looking for action, which is having immediate and long term impact on energy affordability. We need to see both.
Perhaps a more tangible achievement was some of the work we did with the networks in 2019 because that work has a direct impact on consumer bills. The past year saw us right in the middle of the next regulatory cycle where networks are making plans about their investments to maintain and upgrade the poles and wires—all of which has a big impact on bills. So, we rolled up our sleeves and did the hard work with these businesses to identify savings in their revenue proposals before they went to the regulator, a step networks have not been prepared to take previously, which is emblematic of positive cultural change.
In the case of Ausgrid, which services the Sydney and Hunter regions, this saw a final decision was more than $1 billion lower than the initial proposal submitted to the Australian Energy Regulator for the 2019-24 period, wiping around $150 off many individual consumers’ bills. With Ausgrid, the first cab off the rank for the next period, this sets an expectation for savings in other parts of Australia.
You’ll be handing over the reigns in March–what direction are you steering the organisation in for 2020?
The work of the Energy Charter is being absolutely critical to achieving better outcomes for consumers this year. The AEMC has just come out with its price trends report which shows overwhelmingly that prices should fall in the short term. In other words, we have reached the peak for energy prices and should now see things drop back down to more normal levels. The ACCC made essentially the same assessment in its report and we’re now looking to energy companies to deliver on that promise together.
Unfortunately, flat prices are not a ‘pass mark’ for consumers—they want to see big price reductions and according to the AEMC, they are entitled to expect that to happen. Without taking any of the emphasis away from the need for price reductions, we also want to see the Charter demonstrate initiative in engaging with consumers to help them manage their energy use which will also help bring bills down.
Of course, Ausgrid was the first of many network businesses who are submitting their proposals to the regulator for new expenditure on behalf of consumers. Those decisions have a huge impact on bills so we will be engaging very closely with network businesses to make sure that what consumers want is at the centre.
I’m also really looking forward to this year’s Foresighting Forum, which we’ve run each year for some time and will be held in Sydney on February 19-20. This year’s theme really goes to the future energy market and tries to define “what ‘good’ looks like” under the theme. Take charge—a consumer vision for future energy services. We’ve found this forum helps to set the scene for the year and it should be the consumer visions for change that defines how we go forward.
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With your experience over the past five years, what do you think still needs to be done in the industry more broadly?
There is a lot of work going on to modernise our energy system and that must remain a focus. One thing we mustn’t forget in that change process is that we will have failed if part of the community has been left behind.
There is a lot more work ahead of the energy industry to find ways to ensure everyone benefits from the change that’s happening. There is often an assumption that change must result in winners and losers, but if managed properly, I don’t subscribe to this view of the world.
Any thoughts on how we get power prices down?
The million-dollar question! We need to lift our vision beyond the current industry and political cycles and have a long-term view for the market, which draws on the important review work done in the past three years. That vision should be structured around three core principles—affordability, optimisation and individualisation of energy services.
Affordability must be a constraint on all our investments and decisions about energy—an explicit criterion in our decision-making up and down the supply chain. That means that existing and future investment in the power system—networks, generation and retail—must be optimised based on consumers’ demands that not one more dollar is spent than required.
Key to optimising our energy system is providing genuine choices and control to households and small businesses, rewarding flexibility and embracing them as partners in change. Empower, not educate!
Energy services must be built around individuals to reflect their unique circumstances; enabling people to easily manage their own use and costs. Households and small businesses are willing partners if provided the support they need to make further change—whether that be clear and concise information, new affordable technology or other supports.
Fundamental to all of this is the need to re-build the sense of trust with consumers that will underpin a successful partnership with them in change. Consumers simply won’t engage without trust and if consumers don’t engage, the future energy system everyone is seeking won’t eventuate.
However, there is a chicken-egg dynamic here, because rebuilding trust starts with tackling the affordability crisis now. We need to reduce the cost pressure on consumers now, to create confidence for a transformation that will require new investment, experimentation, and risk-taking. Unleashing the power of the consumer’s actions will require leadership by industry to demonstrate to consumers that the sector is serious about tackling their fundamental issues. Facilitate, not under-rate!
Do you have a message for your peers?
2019 was a very big year for people working in the energy industry, and we’ve learnt you need stamina in this sector because the challenges are long term. If I had one message for my peers, it would be to seek engagement rather than conflict in the year ahead. This is a sector too often plagued by seemingly conflicting views and it can hold us back, when often getting together and planning for joint success delivers better outcomes.