Australia’s monopoly water utilities are being pushed by regulators to spend more time listening to their customers, and the results can be surprising.
- Australia’s biggest water supplier is starting an experiment in “kitchen table” consultation
- Utility monopolies are being told by regulators to engage more with customers
- When given time to think some consumers prefer action on climate change and helping the vulnerable over cheaper bills
Pat McCafferty is the general manager of a business that supplies water to two million people in Melbourne.
His company, Yarra Valley Water, employed a consultancy firm, newDemocracy, to run a process recently that enabled customers to take a deep dive into the challenges facing the business and answer some very open-ended questions about the future cost of their water.
Mr McCafferty said he was nervous about how it would work.
“On the very first night of the jury process, I felt like I was handing the keys to the car to my teenage son because we really went all-in on letting the community guide the process and make the key decisions.”
In the end, despite customers playing a major role in developing the utility’s submission to the pricing regulator, it didn’t result in reduced costs for consumers.
Customers valued saving water
According to Pat McCafferty, when participants had time to think deeply about the issues, they came up with other priorities, like support for the vulnerable.
“If you are struggling to pay your bill, those of us who aren’t [struggling] are willing to pay more for programs that support those people.”
They also wanted the utility to invest in environmental programs that involved saving water and responding to climate change, given Melbourne customers had managed to reduce consumption during the last drought.
A global experiment
Iain Walker from consultancy newDemocracy has been watching the development of new models of consultation around the world.
The Organisation for Economic Co-operation and Development (OECD), for example, has encouraged the development of Freedom of Information laws and is now supporting more meaningful and open models of consultation.
“The OECD released a major report [in 2020] called “Catching the Deliberative Wave“, and all we really mean by that is asking people what they think when they’ve had time to think.”
Mr Walker said it was a very different process from the days of the old town hall meeting.
He said it was time to start posing open questions and even asking people what questions they needed to have answered to feel confident in the decision.
Big water supplier takes up the experiment
The country’s biggest water supplier, Water New South Wales, launched a similar “bottom-up” consultation process.
The utility has to go to the Independent Pricing and Regulatory Tribunal (IPART) in 2025 with a submission on pricing, and in the past, that has generally led to price rises, something that has alarmed irrigators.
But this time, Water New South Wales is trying a “bottom-up” approach to develop its submission.
Kitchen table conversations
Jonathan Dickson from Water NSW is a little more hesitant about “handing over the keys”.
While Yarra Valley Water asked a group of 36 customers to give up five Saturdays to go through a process, Water NSW is asking its clients to set up their own “kitchen table” conversations to respond to a series of questions.
They will have access to information from Water NSW plus un-edited submissions from the Commonwealth Water Holder, the NSW Farmers Association and the irrigators association, and they will have two months to think about a response.
It is the beginning of a three-year process that will eventually set the price for farmers, big business, small towns and major cities throughout NSW.