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slide 1
Expectations of DNOs & Willingness to Pay for
Improvements in Service
May 2008
slide 2
Agenda
• Survey objectives
• Fieldwork Methodology
• Background findings
• Stated preference design & analysis
• Stated preference findings
slide 3
The objectives were…
To determine:
• consumers’ experience and satisfaction with the quality of service they receive
• areas of quality of service, environmental and social outputs that consumers value and their relative priorities amongst these
• consumers’ awareness of the guaranteed standards, their views on improvements or extensions to the guaranteed standards, their relative priorities for improvements and their willingness to pay for such changes
• consumers’ expectations regarding planned and unplanned interruptions to their electricity supply
• consumers’ expectations regarding notification of planned interruptions and of when they can expect to be restored after unplanned interruptions to their electricity supply
• consumers’ expectations regarding the resilience of their power supply to bad weather or other exceptional events and willingness to pay for improvements in this area
• the extent of consumer contact with DNOs and their satisfaction with this contact
• consumers’ views on variations in quality of service delivered in different geographical areas and their willingness to pay for improvements in service to worst-served consumers or consumers in rural areas
• consumers’ views on the benefits of undergrounding parts of DNOs’ networks and their willingness to pay for a programme of selective undergrounding
• how expectations and willingness to pay for service improvements vary:– for different consumer groups such as domestic consumers, business consumers and consumers in rural areas– for consumers within the different distribution service areas of each DNO – according to the quality of supply customers have experienced
slide 4
Undertaken through A Comprehensive Research Programme
Stage Two
Quantitative Research
• Quantification of experiences & attitudes• Determining relative service priorities• Identifying WTP
Stage One
Qualitative Research
• Exploring relevant issues• Understanding how consumers think and
feel • Providing necessary context for quant stage• Informing the design of the stated preference
slide 5
The methodology consisted of…
16 Discussion Groups:8 with Domestics
8 with Small Businesses
16 Face-to-Face Depth Interviews:8 with Large Medium Business 8 with Vulnerable Customers
2154 in-home CAPI interviews: average duration 27 mins(weighted to target 2100, 150 per DNO)
Broad quotas on:age, SEG & experience of cuts
Specific quotas on rural versus urban
Random quota sampling by postcodes used to gain as
representative a spread of consumers by DNO as possible
1052 CATI interviews: average duration 25 mins(75 per DNO)
Broad quotas on:company size & experience of cuts
Random sampling approach used to gain as representative a spread of businesses
by DNO as possible
Fieldwork dates: 27 February 2008 to 18 April 2008Fieldwork dates: 27 February 2008 to 6 April 2008
slide 6
The questionnaire covered…
• electricity consumption
• experience of cuts
• attitudinal questions about consumers’ expectations of quality of service and service standards (including voltage fluctuations for businesses)
• awareness of GS2, GS2A & GS4
• stated preference exercises
slide 7
Background Findings
Domestic Consumers
slide 8
Average Bill Sizes
519
458
519
551
536
442
625
515
490
484
522
500
521
490
592
0 100 200 300 400 500 600 700
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
Average Bill Size (£s)
slide 9
Experience of Unplanned Cuts
45
45
75
51
34
60
27
51
30
31
38
43
61
46
39
52
50
22
47
61
35
69
45
68
66
61
55
37
54
58
3
4
3
3
5
5
5
4
3
3
1
2
2
3
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes No Don't know/can't remember
slide 10
Frequency & Duration of Unplanned Cuts
2
1
2
3
10
24
55
2
8
2
7
17
32
31
2
2
2
4
12
26
49
0 10 20 30 40 50 60 70 80 90 100
Don't know
Other
5
4
3
2
1
% Respondents Who Experienced A Cut
Total
Rural
Urban
1
1
5
15
0
5
22
15
35
2
5
13
15
4
15
13
33
1
2
7
15
5
20
15
35
*
*
0 10 20 30 40 50
720+
361-720
181-360
120-180
91-120
61-90
31-60
16-30
0-15
% Respondents Who Experienced Cuts
total
rural
urban
FREQUENCY DURATION
MEAN = 1.9 MEAN = 92 MINUTES
slide 11
Experience of Planned Cuts
7
7
4
7
5
3
2
6
4
4
6
21
15
8
8
89
90
91
91
89
94
96
88
94
92
90
77
84
88
80
4
3
5
3
7
3
2
6
1
5
5
2
1
4
12
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes No Don't know/can't remember
slide 12
Frequency & Duration of Planned Cuts
2
1
1
13
80
2
0
6
24
68
2
1
2
17
76
0 10 20 30 40 50 60 70 80 90 100
Don't know
5
3
2
1
% Respondents Who Experienced A Planned Cut
total
rural
urban
5
7
18
1
23
8
38
8
18
26
5
7
2
34
6
10
20
2
18
6
37
0 10 20 30 40 50
361-720
181-360
120-180
61-90
31-60
16-30
0-15
% Respondents Who Experienced A Planned Cut
total
rural
urban
FREQUENCY
MEAN = 1.2
DURATION
MEAN = 99 MINUTES
slide 13
Distributor Contact
Supplier12%
No one78%
Distributor4%
Don't know/can't remember
5%
Both supplier and distributor
1%
5
9
21
31
35
0 10 20 30 40 50
Don't know/can'tremember
No
Yes, both
Yes, recorded message
Yes, operator
% Respondents Who Contacted Distributor
4% had been contacted or called back by their distributor during an unplanned power cut
slide 14
Do you believe it is reasonable for a power cut to occur in severe weather, ie a major storm or flooding?
75747778
6881
786969
7962
8487
6870
105
54
11513
2312
610
56
2810
11
31
11
2
12
1
1013
1117
1211
77
1412
127
52
16
473
8221
33
1411
14
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes Yes, in a major storm, but not flooding Yes, in flooding but not a major storm No Don't know
slide 15
Service Expectations
• On average, the maximum number of cuts lasting more than 3 hours that they felt a DNO should be allowed in any one year before paying compensation was 2 (excluding 1% of extremes of 10+)
• Most (79%) felt that power should be restored within 3 hours following an unplanned cut (43% said within 1 hour)
• In normal conditions it was felt that a distributor should be required to pay compensation to a consumer after an average of 12 hours without power following an unplanned cut
• After a major storm affecting 100,000 customers most expected power to be restored in 6 hours or less (44%); although a further two fifths (40%) felt within 24 hours was acceptable
slide 16
Do you think that distribution companies should be doing more to reduce the impact of severe weather on their networks?
5
9
1
2
4
5
6
7
12
13
13
17
26
0 10 20 30 40 50
Other
Don't know/not sure
Potential damage to property/freezers/alarms etc
Because of the possible effect on vulnerable people (the old, ill and young children)
Should deal with problems more quickly/should employ more staff to deal withproblems
Companies make enough profit/should be using profits to make improvements
Distribution company's responsibility/job
They charge enough/we pay enough
They are a service/we should not be inconvenienced
Technology available/should be investing in new technology/shouldn't happen in thisday and age
Should regularly maintain/protect equipment better
Cables should be underground/more underground cables
Should be prepared for extreme weather/climate change/have a contingency plan
% Respondents Feeling Distribtors Should Do More
45% felt that DNOsshould be doing more to reduce the impact of severe weather on their networks
slide 17
Do you think that your distribution company should be taking any steps to reduce their company’s impact on the environment?
56% felt that DNOsshould be taking steps to reduce their company’s impact on the environment
78
4
4
1
1
1
1
1
1
2
3
3
5
0 10 20 30 40 50 60 70 80 90 100
Not stated
Other
Don't know
Companies have a responsibility to become greener
Recycling/waste management/reduce paper bills
Get rid of overhead power cables/pylons
Give advice on energy saving to customers
Use wave power
Use solar power
Should be investing/researching green technology
Put power cables underground
Use wind power
Use greener/renewable energy/reduce their emissions (general)
% Respondents Who Think Distributors Should Do More
slide 18
Awareness of Standards
Standard % Awareness
GS2: If your electricity supply fails during normal weather conditions because of a problem on your distribution system, your distributor will restore it within 18 hours of first becoming aware of the problem. If they fail and you make a valid claim within three months of the date the supply is restored, they will arrange for you to receive a compensation payment. You will also receive further compensation for each additional 12 hours you are without supply.
7
GS2A: If your electricity supply fails because of a problem on the distribution system and you are without power for three hours or more, on four or more different occasions in any single year (April to March) you are entitled to a compensation payment. You must make a valid claim for this payment within three months of the end of the year to which the claim applies.
4
GS4: If your distributor needs to switch off your power to work on the network they will give you at least 2 days’ notice. If they fail to give 2 days’ notice or switch your electricity off on a different day, then you can claim (within 1 month of the failure) a compensation payment.
10
slide 19
Background Findings
Business Consumers
slide 20
Size of Organisations: Small = <100KwH or <£30,000pa; Medium = 100KwH-<1MW or £30,000-£275,000pa; Large = 1MW+ or >£275,000pa
65
66
64
62
67
64
73
66
56
67
62
63
62
77
65
24
28
22
25
27
29
18
26
33
20
28
24
23
12
25
11
7
14
14
7
7
9
8
11
13
10
13
15
11
10
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Small Medium Large
slide 21
Experience of Unplanned Cuts
38
36
40
44
33
50
51
46
39
32
27
41
31
27
37
58
54
56
53
61
47
45
47
56
64
71
59
69
69
61
4
11
4
3
5
3
4
7
5
4
3
4
3
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes No Don't know/can't remember
slide 22
Frequency & Duration of Unplanned Cuts
4
6
5
5
17
21
41
0 10 20 30 40 50
not stated
6+
5
4
3
2
1
% Respondents Who Had Experienced Unplanned Cuts
13
2
3
10
7
11
6
17
10
20
0 10 20 30 40 50
Not stated
721+
361-720
181-360
120-180
91-120
61-90
31-60
16-30
0-15
% Respondents
FREQUENCY DURATION
MEAN = 2.6 MEAN = 145 MINUTES
slide 23
Experience of Planned Cuts
9
9
6
5
4
4
16
11
13
9
8
8
8
11
8
88
84
91
92
92
95
83
84
84
85
86
89
88
87
91
4
7
3
3
4
1
1
5
3
5
6
3
5
3
1
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes No Don't know/can't remember
slide 24
Frequency & Duration of Planned Cuts
12
2
8
16
4
10
1
9
12
26
0 10 20 30 40 50
Not stated
721+
361-720
181-360
120-180
91-120
61-90
31-60
16-30
0-15
% Respondents Who Experienced An Unplanned Cut
3
1
3
4
16
72
0 10 20 30 40 50 60 70 80 90 100
not stated
6
4
3
2
1
% Respondents Who Has Experienced A Planned Cut
FREQUENCY DURATION
MEAN = 1.4 MEAN = 138 MINUTES
slide 25
Distributor Contact
Don't know/can't remember
9%
No one47%
Supplier & distributor
1%
Distributor17%
Supplier26%
6
1
10
40
43
0 10 20 30 40 50
Don't know/can'tremember
No
Yes, both
Yes, recorded message
Yes, operator
% Respondents Who Contacted Their Distributor
11% had been contacted or called back by their distributor during an unplanned power cut
slide 26
Experience of Voltage Fluctuations
29
25
22
30
12
37
31
34
27
32
27
36
28
29
38
63
66
70
63
76
59
58
55
65
59
63
57
63
65
57
8
9
8
7
12
4
10
11
8
9
10
7
9
5
5
0 10 20 30 40 50 60 70 80 90 100
Total
CN East
CN West
EDF Energy Networks EPN
EDF Energy Networks LPN
EDF Energy Networks SPN
SSE - Hydro
SSE - Southern
CE - YEDL
CE - NEDL
United Utilities
WPD - South Wales
WPD South West
SP Manweb
SP Distribution
% Respondents
Yes No Don't know/can't remember
slide 27
Experience of Voltage Fluctuations
• Some claimed to experience them on a daily basis (1%), but most experienced them up to 5 times a year (59%)
• 35% of businesses had implemented measures, or invested in equipment, to protect the business in the event of a power dip or surge in supply
• Levels of investment ranged from the odd pound to as much as £25,000,000:– Small: £45K– Medium: £33K– Large: £1.8M
• Just less than one third of businesses stated that their business’s insurance covered them in the event of a loss of business as a result of a power cut:– large businesses were more likely to be covered than small
businesses (39% large, 30% medium and 27% small)
slide 28
Do you believe it is reasonable for a power cut to occur in severe weather, ie a major storm or flooding?
1
1
3
10
86
0 10 20 30 40 50 60 70 80 90 100
Don't know
Yes, in flooding but nota major storm
Yes, in a major storm,but not flooding
No
Yes
% Respondents
slide 29
Service Expectations
• On average, the maximum number of cuts lasting more than 3 hours that they felt a DNO should be allowed in any one year before paying compensation was 1.7
• Most (53%) felt that power should be restored within 1 hour following an unplanned cut (a further 30% said within 2-3 hours)
• In normal conditions it was felt that a distributor should be required to pay compensation to a business after an average of 6 hours without power following an unplanned cut
• After a major storm affecting 100,000 customers most expected power to be restored in 6 hours or less (34%); although a further two fifths (40%) felt within 24 hours was acceptable:– the proportion expecting restoration within 6 hours was higher
amongst larger businesses (44% large, 38% medium and 31% small)
slide 30
Do you think that distribution companies should be doing more to reduce the impact of severe weather on their networks?
55% felt that DNOsshould be doing more to reduce the impact of severe weather on their networks
5
12
0
1
3
4
6
8
10
12
14
14
32
0 10 20 30 40 50
Other
Don't know/not sure
Potential damage to property/freezers/alarms etc
Should deal with problems more quickly/should employ more staff todeal with problems
Distribution company's responsibility/job
Companies make enough profit/should be using profits to makeimprovements
They charge enough/we pay enough
To reduce negative effects on business/profits
Technology available/should be investing in new technology/shouldn'thappen in this day and age
Cables should be underground/more underground cables
They are a service/we should not be inconvenienced
Should regularly maintain/protect equipment better
Should be prepared for extreme weather/climate change/have acontingency plan
% Respondents
slide 31
Do you think that your distribution company should be taking any steps to reduce their company’s impact on the environment?
71% felt that DNOsshould be taking steps to reduce their company’s impact on the environment
20
15
3
3
4
5
5
9
10
43
0 10 20 30 40 50
Don't know
Other
Improving efficiency of equip/power distribution
Recycling/waste management/reduce paper bills
Companies have a responsibility to become greener
Should use enviro friendly service vans/cars
Use wind power
Put power cables underground
Should be investing/researching green technology
Use greener/renewable energy/reduce their emissions (general)
% Respondents Who Think Distributors Should Do More
62% would like information to be available from their DNO on how they could be more energy efficient, most via email (37%) or leaflet (25%), although 10% wanted a visit
slide 32
Awareness of Standards
Large % Medium%
Small %
Total%
If your electricity supply fails during normal weather conditions because of a problem on your distribution system your distributor will restore it within 18 hours of first becoming aware of the problem. If they fail and you make a valid claim within three months of the date the supply is restored, they will arrange for you to receive a compensation payment. You will also receive further compensation for each additional 12 hours you are without supply
11 17 22 14
If your electricity supply fails because of a problem on your distribution system and you are without power for three hours or more, on four or more different occasions in any single year (April to March), you are entitled to a compensation payment. You must make a valid claim for this payment within three months of the end of the year to which the claim applies
4 9 15 7
If your distributor needs to switch off your power to work on the network they will give you at least 2 days’ notice. If they fail to give 2 days’ notice or switch your electricity off on a different day, then you can claim (within 1 month of the failure) a compensation payment
13 19 24 15
slide 33
Stated Preference
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