The default level of service for retail service providers A discussion paper for the LFIG Wednesday, 23 rd August 2006

Transcription

1 The default level of service for retail service providers A discussion paper for the LFIG Wednesday, 23 rd August Background 1.1 Commission policy on tariffs In November 2005 the Commission issued a consultation on the licensing regime under the Water Services etc. (Scotland) Act That consultation asked about the role of price regulation, in particular for Scottish Water Business Stream, in the new framework. In March 2006 the Commission published a summary of responses to the second licensing consultation and an update on their thinking in the light of consultation responses 2. Respondents to second licensing consultation agreed that Scottish Water Business Stream (SWBS) should be subject to price controls. Most respondents also agreed that SWBS should be subject to a universal service obligation, although some concern was expressed that this might disadvantage SWBS relative to new entrants. Some respondents questioned how the price controls and universal service obligation would protect customers in the event that SWBS should fail. In the summary of responses document, the Commission stated: The Commission believes that new entrants (although not those who wish to supply only their own premises) should be obliged to offer default regulated tariffs to all non-household customers in Scotland. In addition, they should have the opportunity to offer whatever unregulated tariffs they choose. The Commission went on to say: The Commission proposal to introduce the requirement to offer a default tariff should ensure that no customer is without a retailer, even if their existing agreement comes to an end. The Commission believes that the offer of default tariffs by all retailers addresses the valid concern about providing all non-household customers with minimum protection, for example if any retailer, including SWBS, were to go bust. It also addresses respondents concerns about ensuring that there is a level playing field between SWBS and entrants. 1 The Licensing Regime under the Water Services etc. (Scotland) Act 2005: A consultation paper (November 2005). 2 The Licensing Framework Responses to the consultation. 1

2 1.2 Commission decision to require a default level of service The Commission has decided 3 that there should be a set of default customer service standards (the default level of service ) for retail service providers, to sit alongside the default tariffs. The default level of service will be included in a default customer service code to be adopted by all retailers. The Commission is of the view that the default level of service must be set at a level that is not a barrier to entry. It should therefore be set at the minimum level consistent with the customer receiving a level of service that is acceptable in the short run. A customer may choose an alternative retail supplier, offering an appropriate level of service, as soon as is convenient. This approach has a number of advantages: it completes the minimum level of protection for all non-household customers, (providing a universal service guarantee), it defines the terms for any requirement placed on licensees to provide retailer of last resort services, and it does not constrain retailer s ability to offer whatever combination of tariffs and levels of service that they choose. 2. The default level of service 2.1 The elements of service that should be covered Proposal: the default service should consist of elements of service included in the existing customer service code that are relevant to non-household customers, and which would not represent a significant burden on new entrants. The potential elements of service that could be included are 4 : keeping appointments planned interruptions unplanned interruptions water getting into gas mains flooding from sewers billing enquires written response to a complaint meter applications pressure complaints major incidents 3 Commission meeting, Wednesday 2 nd August. 4 Our Guaranteed Standards for Business Customers, Scottish Water, 6 January

3 media communication Which elements of service do members think should be offered for the default tariff? 2.2 The required standard of service Guaranteed service standards Currently Scottish Water provides a guaranteed standard of service for nonhousehold customers. Appendix A shows the guaranteed standards set out in the customer service code. Assessed service standards Currently Scottish Water s level of customer service is assessed by the overall performance assessment (OPA) framework. Appendix B shows relevant non-household elements of the OPA along with the performance of Scottish Water and the best performing company in England and Wales on each measure. What level of service for each element should be offered for the default tariff? 3

4 Appendix A: The current standards of service Element of service Keeping appointment Planned interruptions Unplanned interruptions Water getting into gas mains Flooding from sewers Billing enquiriesgeneral Billing enquirieschange of payment method Written response to a complaint Meter applicants Pressure complaints Major incidents Media communication on charge levels for the coming year Service standard Keeping appointments made more than 24hrs in advance Warn customers 48hrs in advance, supply restored in stated time Restore within 12hrs (48hrs for large main supplying large area) Give customer call within 2hrs of reporting fault to give details of what happens next Visit within 3hrs and solve the problem within 8hrs, clean up mess and refund Respond within 10 Respond within 5 Respond within 10 Let customer know outcome within 10 working days of survey Supply a min. 1bar. Payment subsequent to investigations confirming low pressure. Inform outcome of investigations within 5 working days Updated every 48hrs minimum Within 14 days of approval Automatic Claim required Payment level payment for each subsequent 12 hrs without supply for each subsequent 12hrs without supply (on notification of flooding) Annual waste water charge for property (max 1,000 per flooding event) 5-15% of water or waste water charge. max. 5,000 4

5 Appendix B: Performance on OPA measures Element of service Planned interruptions - % of experiencing a planned interruption Unplanned interruptions proportion of where supply is not restored within 12 hours Unplanned interruptions - % of experiencing an unplanned interruption Sewer flooding proportion of experiencing sewer flooding Billing enquiries general -% of enquiries answered within 10 Billing enquiries COPM - % of enquiries answered within 5 Written complaints number of written complaints per thousand Written complaints - % of written complaints responded to within 10 days Pressure complaints proportion of experiencing low pressure Performance Scottish Water 0.70% 0.006% 3 out of every 10, % 0.19% 0.13 out of every 10, % 100% 98.69% 100% % 100% 3 out of every 10,000 Performance of best company in England and Wales 1 out of every 10, out of every 10,000 0 out of every 10,000 Based on figures 5