Customer Service Incentives
Why do we need customer service incentives?
Our regulator sets incentives on us given that we are the only operator of the electricity distribution network across much of NSW.
We already have strong regulations and incentives for us to provide reliable efficient network services, but customers have told us they want good customer service too.
We currently have a customer service incentive, but this only relates to how quickly contact centre telephone calls are answered.
These new incentives replace the telephone answering incentive and focus on aspects of our service that customers have told us that they value the most.
The 3 measures we have included were chosen by our customers during last year’s forums, with areas of most importance given the greatest weighting.
Committing to a performance target that is tied to a potential financial reward or penalty will ensure that as a business, we focus on continually improving our performance for the priorities you identified – no matter how difficult these improvements may be.
Why can’t customer incentive targets be higher?
The targets were set by analysing our historical performance on these measures in recent years.
Our Regulator, the Australian Energy Regulator, ensures that network businesses are rewarded or penalised for incremental changes they make going forward.
While some of these changes may look small, each of them will be difficult to achieve as shifting the dial will not be easy.
If targets were set too ambitiously up front, then it would lead to more penalties, making it more difficult to achieve desired performance improvements.
Because this is the first period that this Customer Service Incentive Scheme will apply, it is the first time that a greater level of attention will be paid to these items by measuring and reporting on their performance – in itself this a stronger incentive to improve performance.
What happens if Essential Energy meets its targets early? Do the targets then increase?
The targets won’t change over the 2024-29 period. However, any financial reward we receive is capped at a modest amount. Targets will be re-set in the following five-year period based on our performance and will be set at a higher level if we consistently exceed the current targets.
How much are the customer incentives worth and where does the money come from?
The incentives scheme is capped at a penalty or benefit of 0.5% of our approved revenue (around $6M each year) over the next 5 years.
Customer Service incentives are made through small adjustments to customers’ network bills (increases if we are being rewarded for our performance, or decreases if we are being penalised for our performance).
Incentive benefits are expected to be directed towards continuing to improve and measure customer service performance – particularly in the areas that are most highly valued by customers.