Our RIIO-ED1 Consultation Process

Every few years, Ofgem carry out a ‘price control review’ to establish how much money distribution companies like ours are entitled to, and what we have to deliver for that money. Following the start of the latest fixed period 2010-2015, we continued our engagement with stakeholders to communicate the outcome of our business plan, show how stakeholder feedback had influenced our proposals and to update them on our performance so that stakeholders can hold us to account for delivering our promises.

In early 2011, we began hosting workshops focussing on the next review period that will run from 2015-2023. As stage 1 of our consultation programme, we asked stakeholders to identify their key priorities for long term investment using traffic light indicator boards, with respect to:

• Customer Service
• Network reliability/performance
• Environmental performance

We also consulted on our new innovation strategy, addressing how WPD can help to facilitate a low carbon economy (and meet UK carbon reduction targets), in particular by enabling connections of solar panels, heat pumps and electric vehicles.

Our stage 1 consultation with stakeholders revealed a list of top priority areas that they would like to see included in our business plan. In stage 2, we carried out a specific market research exercise with our domestic and business customers. This involved face-to-face and telephone interviews to test several ‘high priority’ topics, and to establish customers’ willingness to pay for improvements, or to tolerate lower levels of service in return for lower bills, under each heading. This was to help us to ensure that our business plan could be based on full analysis of the investment costs and benefits, with customer ‘willingness to pay’ vital to the assessment of benefits.

The key areas included in the research were:

1. Frequency of power cuts
2. Average duration of power cuts
3. Remote/’worst served’ customers
4. Innovative communication methods
5. Network resilience to major storms
6. Network resilience to flooding
7. Time allowed to restore supplies before compensation available (Guaranteed standards)
8. Reducing oil and gas leaks from equipment
9. Undergrounding overhead lines in areas of outstanding natural beauty
10. Low carbon network technologies/innovations
11. Time taken to provide a new connection
12. Communication channels for new connections customers.

For example, in our stage 1 consultation we were told that reducing the average number of power cuts was an important priority for customers. So we carried out further research to see what level of improvement customers would most like to see.

What improvements would you like to see with respect to the frequency of power cuts?

• 8 power cuts in 10 years (maintain current average)
• 7 power cuts in 10 years
• 6 power cuts in 10 years
• Even less

Click below to view the results:
Willingness to pay research - Quantitative findings (interviews)
Willingness to pay research - Qualitative findings (focus groups)

We have used the findings from our previous engagement and detailed research (consultation stages 1 and 2) as the basis of our draft business plan. As part of our stage 3 consultation we are presenting stakeholders with:

• Options for network investment and actual costs
• The level of service improvement it would deliver
• The impact on the average domestic electricity bill

As part of this we are showing how stakeholder feedback has influenced our plans so far, and what we are proposing to deliver as a result. We are now seeking further stakeholder views to refine our business plan further.

Following the acceptance of WPD’s Business Plan for fast-tracking by Ofgem, we have now shifted our focus on to delivery.

Our engagement over recent years has seen us build our Plan with stakeholders in stages, making sure that all our key decisions are well justified and reflect what customers expect from WPD.

Now that the Business Plan is agreed we are continuing to work with stakeholders to identify their priorities for delivery – including how quickly they would like us to achieve certain outputs and then asking them to monitor our delivery performance.

Our workshops in February 2014 were designed to achieve 4 key objectives:

• To explain the key aspects of WPD’s final RIIO-ED1 Business Plan;
• Identify which outputs, if any, stakeholders would like WPD to deliver early;
• Seek views on WPD’s performance during severe weather and our proposed improvement actions;
• Seek feedback on WPD’s connections work plan, innovation plan and social obligations programme.

As a result of the feedback received WPD identified 31 improvement actions we will be taking. Please click here to find out more, and to read WPD’s response to the workshop findings report.