slide 1

Consumers’ Expectations of Electricity Distribution Network Operators (DNOs) &

Their Willingness to Pay for Improvements in Service

ACCENT APPROACH

slide 2

Issues Taken Into/To Take Into Consideration

In addition to basic survey objectives:

• Feedback from DNOs on process and results of the previous survey

• Our own learning from the previous study

• Ofgem’s Social Action Strategy; representation of the fuel poor

• Increasing environmental awareness and impact on consumer views and DNOs

slide 3

Summary of Approach

• Stage 1 – QUALITATIVE:– 1 stakeholder workshop– 8 “deliberative” groups with domestic customers– 8 “deliberative” mini groups with SMEs– 8 face-to-face “vulnerable” depths– 8 face-to-face large business depths

• Stage 2 – QUANTITATIVE– 2100 domestic interviews (150 per DNO area)– 1050 business interviews (75 per DNO area)

A Two Stage Approach, Using A Comprehensive Programme of Qualitative Research in Stage 1, Considered Sufficient

slide 4

Key Team Members• Miranda Mayes – Project Manager (1)

– Director– Over 16 years research experience– Expert in the use of stated preference and customer prioritisaytion– Work principally in the utilities sector and government sectors– Manager of the DPCR4 study

• Rick Ginter – Project Manager (2)– Research Director– Over 20 years research experience– Expert in the use of conjoint techniques & customer prioritisation– Strong background in utilities research with US & UK companies

• Rob Sheldon – Project Director– Accent’s Managing Director– Over 30 years experience in market research– Internationally recognised expert in the field of stated preference; over 1000 stated preference studies– Strong track record in the utilities sector; several hundred studies including 8 current PR09 studies for the water

sector– Director of the DPCR4 study

• Nancy Curzon – Lead Qualitative Consultant– Senior Qualitative Consultant; former Director of Outlook Research– Over 15 years research experience– Provides qualitative trainiing on behalf of the MRS– Expertise in utilities sector– Lead qualitative consultant on DPCR4

• Charlene Rohr - Director of Modelling Team, RAND Europe Cambridge – Over 15 years experience– Expertise in estimation of discrete choice models using, eg, SP data– Development of forecasting systems from these models– Has worked on numerous WTP studies– Clients have included Mid Kent Water, Northumbrian Water, Severn Trent Water, Transport for London, Postwatch

and Royal Mail

slide 5

Stage 1 – Domestic Groups

• Eight groups

• 105 minutes duration

• Proposed structure (across 8 locations, to be defined): 

Customer Type

Consumer

Geography Urban Rural

Location 1 2 3 4 5 6 7 8

Age 20-40 41-60 41-60 20-40 20-40 41-60 41-60 20-40

SEG ABC1 C2DE ABC1 C2DE C2DE ABC1 C2DE ABC1

 

*Each C2DE group will include 1 or 2 from Ofgem’s priority consumer group & some who have experienced cuts

• Deliberative & pre-tasked

• Other techniques will include:– Importance rankings– “Third person” technique

slide 6

Stage 1 – Vulnerable Depths

• Eight depths

• 45-60 minutes duration

• Proposed structure

Customer TypeVulnerable No.

GeographyUrbanRural

448

Location

ScotlandWest

East AngliaSouth East

(tba)

22228

• Also:– a spread of age & disability– spread of bill sizes & energy dependency

• Deliberative & pre-tasked

*Will include some who have experienced cuts

slide 7

Stage 1 – Business Mini Groups – SMEs• Eight groups

• 105 minutes duration

• Proposed structure:

 

• Deliberative & pre-tasked:

• Other techniques will include:– Importance rankings– “Third person” technique

Customer Type

SME

Geography Urban Rural

Location 1 2 3 4 5 6 7 8

Size Small Medium Small Medium Small Medium Small Medium*Each group will include some who have experienced cuts

slide 8

Stage 1 – Business Depths

• Eight depths

• 45-60 minutes duration

• Proposed structure

Customer TypeLarge Business No.

GeographyUrbanRural

448

Location

ScotlandSouth-EastEast Anglia

West(tba)

22228

• Also:– mix of businesses– spread of bill sizes/energy dependency

• Deliberative & pre-tasked

*Will include some who have experienced cuts

slide 9

Stage 2 – Quantitative Research Method• Stated preference (SP) technique to determine priorities & WTP; particularly

robust means of determining the above

• Uses “realistic” choices

• Cost is just one of many important variables the respondent is asked to trade off:

– avoids the bias that can arise from open ended questions which allow respondents to make a political statement through their responses

• Results identify “relative” importance in a way that ranking and rating can’t

• Face-to face interviews for consumers; telephone interviews for businesses

Choice 1

Average number of power cuts in RURAL areas in 5 years

Average number of power cuts in URBAN areas in 5 years

Average duration of power cut

Change to annual electricity bill before inflation

Choice (mark "X" in preferred option)

Which electricity service would you choose?

As Now Alternative 1 Alternative 2Power cuts in RURAL areas

8 in 5 years 5 in 5 years 10 in 5 years

Power cuts in URBAN areas3 in 5 years 4 in 5 years 2 in 5 years

Duration114 minutes 114 minutes 120 minutes

CostNo change Increase by £5 per year Decrease by £8 per year

slide 10

Stage 2 – Domestic Interviews

• 2100 domestic interviews– 150 per DNO

• Allows for segmentation of DNO prioritisation & WTP results by 2 (and possibly up to 3) breaks, eg:– age:

16-29, 30-49, 50+ 16-49, 50+

– SEG: AB, C1C2, DE ABC1, C2DE

– location: urban rural

– experience of cuts: yes no

slide 11

Stage 2 – Business Interviews

• 1050 business interviews

• Allows for segmentation by DNO (14 * 75)

• “May” allow for further segmentation by, for example, rural/urban and business consumption but only given homogeneity of results

slide 12

Questionnaires

• All developed in consultation with Ofgem, DNOs and other stakeholders

• Quantitative questionnaire will be informed by qualitative research findings

• Quantitative questionnaire will use “actual” data (eg average number of cuts, average length of interruptions, bill size etc)

• Quantitative questionnaire will be thoroughly piloted:– 100 domestic

– 40 business

• Show material will be incorporated wherever necessary

slide 13

Example of Questionnaire Software

slide 14

Deliverables

• Draft report

• Presentation

• Final report

• All will include:– Summary of Key Findings– Detailed Findings– Relative Priorities (co-efficients/utilities/values)– WTP– Recommendations