The Energy Charter: A year of firsts

The Energy Charter is a world-first initiative to unite Australia’s energy industry to improve customer outcomes.

Launched early this year, the Energy Charter continues to gain momentum. The 18 signatory energy companies from across the supply chain are focused on their first-ever public disclosures in September 2019 and collaborative initiatives to deliver better customer outcomes.  The disclosures will be assessed by the newly appointed independent Accountability Panel which represents the interests of residential consumers, commercial and industrial users and industry.

In this short piece, we provide a brief background on the Energy Charter, describe the journey so far, highlight both the challenges and opportunities and set the scene for what’s next in 2019. It’s a brave new world and one where there are likely to be ongoing learnings about how to embed customer-centric culture and conduct within energy businesses.

Background in a nutshell

Launched on 31 January 2019, the Energy Charter’s vision, Together, deliver energy for a better Australia, focuses on all participants in the energy supply chain working together with customers sitting at their centre. The Energy Charter is about genuine customer outcomes and industry accountability to achieve them. Its primary purpose is to progress the business solutions and culture required to deliver a more affordable, sustainable and reliable energy system for all Australians.

The Energy Charter came about in early 2018. The energy industry was not in a great space. Rising energy costs and security of supply were primary concerns for all energy users. The energy system was also at a pivotal point of transition – moving from a centralised system to an increasingly decentralised system.

It was recognised that to deliver energy into the future, to deploy the advances in technology and support customer choice as well as ensuring energy is affordable and accessible by all, it was essential that the Australian community had trust and confidence in energy businesses and in the energy system as a whole.

A number of Australian energy CEOs agreed that an Energy Charter could help achieve this and that better customer outcomes required a whole of industry approach. This required a personal commitment by CEOs, an open mindset and a lot of hard work by many others to make it a reality. Critical to the development of the Energy Charter was Energy Consumers Australia, who ensured the range of consumer and end-user voices and concerns were heard and reflected at every step along the way. This included the establishment of the End-User Consultative Group (EUCG).

As a voluntary, principles-based disclosure regime, the Energy Charter embraces businesses across the entire energy supply chain, from generation to gas pipelines, electricity transmission and distribution networks, energy retailers and new residential energy services. The Energy Charter aligns signatories on commitments based on five clear principles:

1. We will put customers at the centre of our business and the energy system

2. We will improve energy affordability for customers

3. We will provide energy safely, sustainably and reliably

4. We will improve the customer experience

5. We will support customers facing vulnerable circumstances.

Our approach to the Energy Charter is to bring it to life through guiding values of being invested and making a difference, being open, learning and improving and thinking big, being bold.

The journey so far…

2019 is a year of firsts for the Energy Charter and its signatories. Our key priorities are three-fold:

1. Embedding the Energy Charter within signatories

2. Public disclosures by signatories against Energy Charter Principles by 30 September

3. An evaluation report by the Independent Accountability Panel by 30 November

How are signatories embedding the Energy Charter principles within their businesses? Every business is different and so, not surprisingly there have been diverse approaches taken. Overall, signatories are focussing on how to ‘stretch’ themselves to increase their maturity levels in relation to each of the Energy Charter principles. Some signatories are also improving the ways in which they measure and reward a shift towards achieving better customer outcomes. Other signatories have aligned internal processes with the Energy Charter to strengthen existing “customer at the centre” initiatives within their businesses.

Our second priority is to focus on the first public disclosures, due 30 September 2019. Working closely with end users,[1] a disclosure guidance template has been developed that encourages signatories to limit their disclosures to 20-30 pages, and importantly tell an “authentic story” to highlight where they are up to, in relation to the Energy Charter principles. Rather than standardise measures, metrics or evidence to support those stories, end users have clearly articulated that they expect diversity in approaches to the disclosures which reflect the true state of play of each signatory.

Finally, a key focus for 2019 has been on the establishment of the independent Accountability Panel, hosted by Energy Consumers Australia. In late January, Dr Wendy Craik AM was announced as the Chair of the Accountability Panel. Last week it was announced that Dr Cassandra Goldie from the Australian Council of Social Service (ACOSS), Mr Andrew Richards from the Energy Users Association of Australia (EUAA) and Mr Philip Weickhardt former Orica CEO and Productivity Commissioner, will join the Accountability Panel. Energy Charter businesses will deliver their first disclosure reports in September 2019 which will be reviewed by the Accountability Panel before the end of the year. 

Welcoming the panellists, Chair of the CEO Council, John Cleland (Essential Energy) stated:

“The Panel has an important role to play in independently evaluating and reporting on the performance of Energy Charter participants, recognising good performance and providing guidance on opportunities for improvement.”

Challenges and opportunities

One of the biggest challenges for the Energy Charter has been its operationalisation at a time of increased activity in the energy market. With a range of different consultations and processes on foot, time and resources within signatories and end user representatives must be used efficiently and effectively. Furthermore, as the Energy Charter is about creating cultural change and the industry being held collectively accountable to the customers they serve, this takes time and commitment.

Efficient use of resources has also created opportunities to progress “across the supply chain” initiatives that are focused on delivering better customer outcomes. Aptly named the “Better Together” initiatives, signatories and end user representatives have shortlisted key initiatives to scope and assess for the customer outcomes they can deliver. These include broad initiatives encompassing each of the Energy Charter principles, namely:

• Mechanisms for authentic customer engagement within each business to ensure that the customer voice is reflected in decision-making
• Co-ordinated cost-reflective electricity network tariff reform
• Transparency and customer-centred communications regarding products and services
• Work between retailers and networks to focus on better outcomes for residential customers around for example, customer moves and 24/7 energy connections
• Encouraging energy business brokers to better represent small and medium businesses
• Improving customer experience, for example during power outages via improved communication and access to information
• Supporting customers in vulnerable circumstances

Over the coming months, experts within lead businesses will work collaboratively with key stakeholders, including the EUCG to scope the initiatives up, clearly define the customer benefits and prioritise implementation plans.

What’s next?

On 30 September 2019, signatories will publicly report against the Principles and Principles in Action in the Energy Charter to the Accountability Panel, outlining how they are meeting or making progress towards the Energy Charter commitments, from making energy more affordable and ensuring safety, reliability and sustainability, to improving the customer experience and supporting customers facing vulnerable circumstances.

The independent Accountability Panel will then review and evaluate the disclosures, publishing their first Energy Charter Report by 30 November 2019 with a focus on encouraging continuous improvement.

Brave new world

As with any new initiative, it is likely that 2019 and beyond will continue to offer many more opportunities and challenges for Energy Charter signatories. However, the 18 signatories, who supply approximately 11 million customers from across the electricity and gas supply chains, are firm on their focus to leverage the learnings of the Energy Charter in 2019 for ongoing continuous improvement and to achieve better customer outcomes together.

For more information on the Energy Charter or to get involved, please contact the author, Energy Charter Director, Sabiene Heindl via email sabiene.heindl@theenergycharter.com.au or on M: 0412 039 747.

[1] The End Users Consultative Group was set up in early 2018 and is made up of end-user representatives across residential, small business and commercial/industrial customers, it is chaired by Energy Consumers Australia.