A customer-led price submission
Every five years all Victorian water businesses undergo a Water Price Review process run by the industry's independent regulator, the Essential Services Commission.
In 2017 we embarked on one of the most comprehensive customer engagement initiatives the Australian water industry has ever seen, considering the feedback 24,000 customers gave us to develop our price submission for the Essential Services Commission (ESC).
We delivered the engagement program for this price submission in four phases, each building on insights from the previous phase and focusing on delivering what customers value. Our research and engagement activities culminated in two significant price and service trade-off activities:
- conjoint choice modelling, conducted with 1,000 customers who considered different service package offers to identify those that would increase customer value
- a ground-breaking citizens’ jury.
Understanding our customers on a deeper level
We wanted to better understand our customers. What was of most importance in their lives? We sought to identify personas to connect to our customers as real people with differing values. Eight personas were identified representing the different value-sets across our customer base, enabling us to step into another’s shoes and view the world from their perspective.
Understanding our customers' service expectations
We wanted to understand our customers’ views and service expectations. What was important to them in relation to their water and sewerage services? We used a variety of methods and forums, conducting a series of research pieces with different customer segments, such as local government, business, community groups and households. We engaged more broadly than ever before, ensuring that all customer segments had a fair opportunity to participate. This included hard-to-reach, disadvantaged and underrepresented customers.
Determining customer value
We sought to understand customers’ willingness to trade-off price and service. This was explored both through conjoint choice modelling and our citizens’ jury, which identified a clear distinction between what customers expect and what they value.
Creating customer outcomes
Our customer-led engagement process, including the citizen’s jury established seven outcomes that customers expect and value, including three core service expectations:
- water that is safe to drink
- water and sewerage services that they can rely on
- fast response and effective restoration of their service when it is interrupted.
And four community-based values:
- support for customers having difficulty paying their bills
- a modern, flexible service and advice that suits their needs
- saving water now so it’s available in the future
- looking after the environment.
Empowering citizens in decision-making
Our citizens’ jury was developed on the following principles:
- Ensure a clear remit, providing a strong and open platform about the trade-offs. Our citizens’ jury was convened to challenge our inputs and make recommendations for how we could best meet the task:
‘We need to find a balance between price and service which is fair for everyone. How should we do this?’
Provide detailed in-depth information across the breadth of our services, from multiple, diverse sources including insights from customer research and engagement, speakers chosen by our stakeholders and jury members, and submissions made by the public. This enabled participants to deliberate over the content and move past opinion to an informed and more balanced view. Our Board, Executive team and subject matter experts attended sessions and enabled the jurors to access information in an informal and direct way.
Ensure the 30 jurors reflected a representative random sample of people affected by the decision. The jury deliberated for five-and-a-half days, over four months. This allowed sufficient time for the jury to fully consider the remit, seek additional information and consult with their peers and communities.
The jury made ten recommendations that we incorporated into our submission . The jury's report was presented to the Board unedited and we responded to each recommendation. We accepted all 10 recommendations of the jury and incorporated these into our price submission for the ESC.
We did not provide a draft position for review or ask the jury for comment on a pre-prepared document. The jury members created the report in its entirety from a blank page.
The jury deliberates
Watch the following videos to hear the reflections of our jurors, Board and Executive team during and following their deliberations:
On Saturday 13 May 2017, we held our first full-day session with the citizens’ jury. They met with key Yarra Valley Water staff, were provided with further information and then participated in a speed dialogue session where they could ask any question they liked.
On Saturday 3 June 2017, the citizens’ jury heard from six speakers who had been nominated and selected by our stakeholders to provide a broad range of information relevant to the issues they were charged with considering.
On Saturday 17 June 2017, the citizens' jury heard from five speakers who they chose to help them continue to consider the issues.
On Saturday 1 July 2017, the citizens' jury had the opportunity to meet with members of our Board and Executive team to test their thinking as they worked to find a fair balance between price and service.
On Saturday 22 July 2017, the jury met for the final time, handing over their final recommendations to our Chair and Managing Director.
Our customers demonstrated that, equipped with all the information they needed, they were able to provide recommendations on the important questions facing our business. The citizens’ jury process has informed the way we work – particularly, how we seek insights and feedback from our communities and engage with them to deliver our services. The outcomes from the jury process have provided a platform to ensure we have a clear understanding of our customers’ needs and expectations.
Outcome of our submission to the ESC
As well as the Jury's ten recommendations, we promised to meet targets for seven outcomes that customers told us were both important and valued, including:
- Safe drinking water
- Reliable water and sewerage services
- Timely response and restoration
- Fair assistance and assistance for all
- Water availability and conservation
- Modern flexible service
- Care for and protect the environment.
We lodged our Price Submission with the ESC on 28 September 2017. The ESC approved our prices for the five years (from 2018-19 to 2022-23) on 29 May 2018. The average household and business customers bills will not increase in 2018-19. During the four years following, prices will rise by 1% below the rate of inflation.