PIAC responded to the Australian Energy Regulator’s (AER) consultation on improving customer service incentive schemes for network businesses.
We support the AER’s desire to improve the customer service of network businesses and consider its plan to implement trial schemes a good method for doing so without burdening consumers with extra costs.
We highlight that for an incentive scheme to provide sufficient incentives for distributors to provide customer services as desired by customers, it must have a mechanism for determining what customers want and a way of measuring the degree to which networks, under the scheme, are meeting those expectations.
We specify conditions that should be met before applying the trial incentive scheme to a network business and principles for a scheme’s design.
We also make recommendations on types of incentives that should be used and how performance measures and areas for improvement should be decided.
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