Jemena is one of 15 energy businesses whose CEOs have committed to the Energy Charter; a whole-of-sector initiative aimed at improving energy customer outcomes. In this post I want to talk a little about what the Energy Charter is, how it works, and why I think this is such an important step for the sector.
The energy sector in Australia is not in a good place
I have spent almost 30 years in the energy industry across a number of countries, and I can confidently say I have never seen consumer trust in our sector as low as it is today. I see this play out in my “day job” as head of Corporate Affairs at Jemena, but also through my role as a Board Member of the Energy & Water Ombudsman of New South Wales.
We are seeing increased consumer complaints, escalating disputes, negative media coverage, and a range of uncoordinated policy activity and inactivity by different governments. All of this uncertainty further erodes consumer trust and the social license of our sector. It also makes our lenders and shareholders uncertain, increasing our financing costs, and feeding back into higher prices, which makes the situation even worse.
In short: no one is happy. And without leadership there is no end in sight.
Trust is declining in Australia generally, but in the energy industry in particular
This year’s Edelman Trust Barometer report for Australia reported that the energy industry is the least trusted out of the 15 industries they asked about. We have both the lowest proportion of people who trust us (39%), and the biggest fall in proportion since 2017 (-11%). We’re even doing significantly worse than financial services, and given all of their recent headlines generated, that is saying something!
The Energy Charter
Into this environment slides the Energy Charter. The Energy Charter is an industry initiative that aims to deliver improved customer outcomes by driving collaboration across the energy sector. The Charter will do this by outlining a series of high-level principles that signatories will apply across their businesses to put customers and customer outcomes at the core of their business.
Those companies who commit to The Energy Charter will agree to publicly report on how they are delivering against these principles and providing positive outcomes for customers. This will be verified by an independent accountability panel, and an annual report that will be made available to the public. If signatories do not implement measures consistent with the principles, they will explain why under an “if not, why not” regime.
This process has been facilitated by Energy Consumers Australia, with foundation members coming from across the energy supply chain from generators, to retailers, and gas and electricity transmission and distribution companies. A consultative group of customer representatives and NGOs have also helped shape the Charter.
The draft Charter was published for consultation on 20 September 2018, and is available here. Consultation feedback is open until 17 October 2018.
Foundation members, including Jemena, will take the Energy Charter, incorporating the feedback received over the consultation period, and roll it out across our businesses from the start of next year.
A step forward, but we also need to step up!
This is a significant step forward for the industry, and I am proud that Jemena has seen fit to be one of the foundation members leading on putting customers at the heart of our business and the energy system.
But… this will not be easy, and there are fundamental changes that will need to occur.
To the businesses that are already involved in the Energy Charter: dig deep. We have an opportunity to show our customers that we take this seriously, and the stakes have never been higher.
To those businesses that are not (yet) involved: I encourage you to find out more about the Energy Charter and what it is going to mean for you. Check out the consultation draft, and contact the Project Director to arrange a direct briefing.
That’s enough words from me. Ultimately we will be judged not by what we say, but by the outcomes we deliver for our customers.