‘Critical Friends’ Stakeholder Panel · Ben Gilding (BG) shared our approach to forecasting electricity demand and generation. He went He went on to present changes that we are

Stakeholder Engagement - ‘Critical Friends’ Stakeholder Panel Panel 11, Session 3 –Eastern Power Networks

Ipswich 12 November 2015

Stakeholder Engagement – Critical Friends Stakeholder Panel

UK Power Networks (Operations) Limited. Registered in England and Wales. Registered No. 3870728. Registered Office: Newington House, 237 Southwark Bridge Road, London, SE1 6NP Page 2 of 19

Contents 1. Introduction ........................................................................... 3 2. What are ‘Critical Friends’ stakeholder engagement panels? 6 3. Session3 of Panel 11: Event location and attendees ........... 6 4. Format of engagement ......................................................... 7 5. Objectives and key questions ............................................... 7 6. Speakers and topics ............................................................. 8 7. Key feedback and actions .................................................... 10 8. Your feedback ...................................................................... 15 9. Next steps ............................................................................ 19 10. Key contacts ......................................................................... 19



1. Introduction UK Power Networks is one of the UK’s largest electricity distribution businesses. We own, operate and manage three electricity distribution networks in the UK. Our licenced distribution networks are in the East of England, London and the South East.

It is our job to ensure the infrastructure that brings power to homes, businesses, hospitals, schools and other public services delivers reliable, safe and sustainable electricity. Our responsibilities include:

• Maintaining the safety and reliability of the electricity networks • Connecting new customer premises to electricity • Extending and upgrading the electricity network to meet changing needs

Our three networks distribute electricity using more than 160,000km of underground cables and overhead lines, and more than 135,600 substations. Laid out, our networks would stretch several times around the circumference of the Earth.



From underground cables to overhead power lines, small rural substations to complex delivery networks in the capital, we are working on the electricity network 24 hours a day, 365 days a year, making sure the lights don’t go out. Safety and customer service are our top priorities; these are at the heart of everything we do. Number of connected customers 8.1 million Kilometres of overhead electricity lines 47,500 Kilometres of underground electricity cables 125,000 Number of employees 5,200 Number of new connections (2014) 86,000 Our vision is to become an organisation which is respected as one of the best performing companies in the sector.



We work to a vision defined by our core values. This vision drives us to ensure that we bring all of our 8.1 million customers a reliable service that delivers value, safety and innovation. We have an important part to play in supporting the Government’s move to a low carbon economy. The energy industry is facing challenges to meet increasing demand and provide innovative technologies such as electric vehicles and heat pumps. Our vision emphasises the aspiration for us to be a leading company in the electricity distribution sector. It recognises that this can only be achieved if our company objectives are aligned with the interests of all relevant stakeholders, including shareholders, staff, customers and regulators. Stakeholder engagement is therefore a fundamental and crucial part of our business. It is very important that we are regularly talking to our customers and asking them what they think our priorities should be for the future.



2. What are ‘Critical Friends’ stakeholder engagement panels? To ensure stakeholder feedback is fully captured and acted upon we have designed our ‘Critical Friends’ stakeholder engagement panels, which are engagement sessions to discuss themes associated with our activities and services. The panels run alongside other forums and workshops that we organise as part of our business as usual engagement with our stakeholders. The ‘Critical Friends’ stakeholder engagement panels began in October 2012 and have so far focused on fourteen key topics over ten rounds of sessions:

• Customer satisfaction • Social obligations • Low carbon targets and transition • Safety • Low carbon technologies • Environment • Network reliability & availability • Connections • Corporate Social Responsibility (CSR) • RIIO-ED1 Business Plan resubmission • December 2013 storm performance • Emergency Planning • Future skills in the electricity industry • Ofgem’s final determination on our RIIO-ED1 Business Plan and reporting our progress on

achieving our output commitments In the context of the ‘Critical Friends’ panels, we are consulting with people from a wide range of organisations and representative bodies, including (but not limited to) major energy users, small business and domestic customers, developers, local authorities and parish councils, charities, environmental groups and organisations which help vulnerable people.

3. Session 3 of Panel 11: Event location and attendees The session was held on 12 November 2015 at the address below: Novotel Ipswich Central, Grey Friars Road, Ipswich IP1 1UP



On the day, we were joined by stakeholders from the following organisations: Advancing Sustainability LLP Ipswich Disabled Advice Bureau Anglian Water Services Levington and Stratton Hall Parish Council Arla Foods London Borough of Havering Babergh and Mid Suffolk District Councils Morrison Utility Services BT Open Reach NFU Cambridge University Norfolk and Suffolk Constabulary Cambridgeshire Constabulary Norfolk Wildlife Trust CLA East Norwich City Council Colchester Borough Council R E G Energy Services (Norfolk) Ltd. East of England Energy Group (EEEGR) Royal Association for Deaf people Essex Fire & Rescue Service S&C Electric Company Essex wildlife Trust Suffolk NFU Haven Power Limited West Suffolk District Council Ipswich Borough Council

4. Format of engagement After a welcome address given by Matt Rudling (MR), several speakers gave short presentations as summarised below. Participants were invited to ask questions at any time during presentations and discussions were held by the group as a whole as stakeholders probed some of the issues further. Participants were also encouraged to raise any additional issues which were of interest to them. Feedback forms were provided to the stakeholders inviting them to answer a number of questions about the event and the results are summarised in Section 8.

5. Objectives and key questions The panel focused on the following topics:

• To explain how we are developing our engagement practices • To share our approach to forecasting electricity demand and generation • To show how we’re innovating to deliver continued improvement • To demonstrate how we plan to implement our losses strategy



The main aims of this event was to seek feedback on the topics presented on, and also give stakeholders the opportunity to tell us what issues related to our business are most important to them.

6. Speakers and topics Below we briefly summarise the opening statements by each speaker. Welcome Simon Gray, CEO, East of England Energy Group (EEEGR) and Independent Chairman of EPN Panels Simon Gray (SG) opened the session by welcoming everyone and giving an overview of the importance the East of England plays in the UK energy market. He went on to encourage the stakeholders to participate in the discussions, feedback on any issues they have and ask any questions. Developing our approach to Stakeholder Engagement Keith Hutton, Head of Regulation Keith Hutton (KH) opened with an overview of the Energy Industry Trilemma particularly; affordability (including access to connections), sustainability (including moving towards a low carbon economy with a mix of technologies) and reliability (or for UK Power Networks, ‘keeping the lights on’). He mentioned that this was the reason why UK Power Networks engages with all stakeholders along with that it is the right thing to do to ensure a successful business. KH discussed why Stakeholder Engagement is important to UK Power Networks, giving examples of the successes we have seen through this process and the benefits these have delivered to our customers. He then presented on why we wanted to take stock of our process, and the changes we plan to drive our engagement activities forward. KH invited feedback on whether the engagement themes we have identified were suitable and whether the success criteria we are working towards were appropriate. Economic Assumptions for Load Forecasting Ben Gilding, Business Modeller Ben Gilding (BG) shared our approach to forecasting electricity demand and generation. He went on to present changes that we are proposing to make to our short term forecasts.



Before inviting feedback he presented on our approach to modelling long term low carbon technology take up rates. Innovation Refresh Update Colin Nicholl, Head of Business Planning Colin Nicholl (CN) opened with an overview of our Innovation goals, demonstrating how Innovation can support our corporate targets. He explained how we approach innovation with a view to driving continuous business development. Next CN presented our Innovation strategy before inviting feedback on whether our Innovation principles were appropriate. The presentation continued with an overview of our Innovation portfolio and discussion around idea sharing and reporting. Losses Strategy Overview Allan Boardman, Network Design Standards Manager Allan Boardman (AB) opened with some background to the scale of losses within the industry. He went on to give an overview of our Losses Strategy. AB explained what Network Losses are, differentiating between Technical and Non-technical losses before presenting on how we plan to implement the strategy. The presentation concluded with a number of questions presented to the audience for future consideration:

• What do you consider important for UK Power Networks to incorporate in to their losses strategy?

• How are losses currently affecting you? • How would you prefer to engage with UK Power Networks regarding future losses

discussions, stakeholder engagement and sharing of best practice?



7. Key feedback and actions

The following details the comments and questions raised by stakeholders.

Developing our approach to Stakeholder Engagement

- A stakeholder commented on how ambitious our engagement strategy appeared adding that it would require significant funding. KH confirmed that we have a plan so we know what’s required to deliver what we aim to achieve, but we must be flexible and able to adapt. We would very much welcome stakeholder feedback.

- Another stakeholder asked whether the five seconds we claim to answer the call in relates to an automated answering service or actually speaking to a person. KH confirmed that our telephony system does offer both options. MR added that in the example given it relates to speaking with one of our Customer Service Advisors.

- Another stakeholder commended the work done to improve access to the public but asked what we were doing to improve access to strategic partners. Local Authorities can take some of the pain away from our call centre as they will also receive significant numbers of calls. If they had better access to the call centre and incident information, they could help handle some of the calls. Another stakeholder added that she recalls we made a commitment in March 2014 to create a dedicated phone line for councils to use and that we expected to have this live by July 2014. MR responded that we have the line in place but obviously needed to improve our communication of this. Another stakeholder added that a reminder would be helpful as there is obviously some councils who are not aware of it.

- One panellist asked what was meant by Distributed Generation. KH explained that typically the demand on the network comes from consumers drawing power. The reverse is true with generation. We are able to schedule when generation occurs throughout the day to manage load effectively. SG added that with the increase in smaller generation developments the challenge is in how to accommodate them. The scheduling of when generation can feed back to the network helps accommodate these projects. MR went on to explain that there is also a financial benefit to the developer. Often projects of this nature would require upstream reinforcement of the network, which the developers would need to pay towards. By agreeing to schedule generation at time where there is spare capacity in the network, we can avoid the reinforcement costs and so reduce the overall cost to the developer.

- A stakeholder mentioned that they actively promote our Priority Service Register (PSR) across Suffolk, but would ideally like to compare our PSR list with their own client base, although they recognise the Data Protection Act (DPA) would be a blocker.

- Another stakeholder added that they also promote the PSR in the Ipswich area. They find that the best way to secure an application is to engage the customer face to face. MR confirmed that as part of our engagement plans we are looking to launch a utility workgroup early next year. One area we want to explore in this forum is how as category 2 responders



under the Civil Contingencies Act (CCA) we can share data on vulnerable customers. He invited input from the audience. SG asked what Category 2 responders were. MR went on to explain how under the CCA, the blue light services and local authorities are all category 1 responders whilst utilities were category 2. As such we have certain obligations under the CCA but don’t carry the same degree of authority as a category 1.

- SG asked for an explanation of RIIO. KH responded that this referred to tour regulators brand for the price review period. Revenue = Innovation + Incentive + Outputs. The ED1 stands for Electricity Distribution 1 as this is the first period to be assessed under the current brand. This all links to our business plan and the 77 outputs we have committed to deliver.

- SG asked what percentage of the customer’s bill we receive as payment. MR confirmed it was in the region of 16% which equates to approximately £85 per year.

- KH asked the panel whether the engagement themes were appropriate or whether we had missed anything. One stakeholder confirms they have attended past events and seen the development of connection specific forums which are very positive and useful. SG added that it made sense to hold events with a focus on vulnerable customers or the needs of Pariah Councils etc.

- One stakeholder asked whether we had KPIs in place to measure performance against each of our engagement themes. KH confirmed we do use KPIs and our business commitments to assess performance. MR added that we also plan to share performance against our business plan commitments. Another stakeholder commented on how we would need to develop this update in a range of channels as approximately 55% of vulnerable customers do not have access to electronic channels. MR agreed we would need to develop a scorecard that stakeholders can use in the critical friends panels to hold UKPN to account on performance against our ED1 commitments.

- SG asked for a reminder as to how customers can apply to be added to the PSR. MR explained how our understanding of vulnerability is evolving and we now consider the transient nature of vulnerability such as families with young children. He went on to explain how customers can apply by calling us, completing an online application, sending a completed paper application or through a number of our partners who are actively promoting the PSR on our behalf. MR added that to reach as many customers as we can, we are using a range of initiatives such as sending out 4 million emails next week, live roadshows in town centres around our area and promotion through council newsletters etc.

- A panellist mentioned that as a council they do receive calls from us in line with the agreed triggers to notify them of a power cut, but often not until customer have already been off for six or seven hours. MR explained how the triggers were agreed with a panel of councils following a request for proactive notification. He went on to explain how we have a dedicated team who will make these calls and keep councils updated during the incident. He added that the reason why the 8 hour trigger was agreed on was the fact that most power cuts are restored within one or two hours which wouldn’t allow sufficient time to deploy support resources. The stakeholder understood the rationale but would still like to



know about vulnerable customers impacted to ensure no one slips through the net. MR agreed that perhaps there was more we could do.

- Another stakeholder suggested we should do more engagement with agricultural communities around safety etc. MR confirmed we have a public safety team who engage with our customers about safety but not specifically through the NFU. He added that this was something we would be happy to explore.

- Another stakeholder asked whether we produced any safety material we can distribute. MR confirmed we had a range of safety brochures that were freely available.

- One stakeholder suggested that we may need to develop a subgroup of the Critical Friends Panels for larger energy users where we could discuss more technical issues. KH thanked for the feedback and agreed we would look into this. The stakeholder went on to ask whether we also use a vulnerability status for our industrial customers. MR confirmed that we don’t categorise commercial customers in the same way as vulnerable consumers. He went on to add that we were currently developing new systems and as part of the build we will include more data to allow us to better understand the needs of our customers and tailor services accordingly.

- A stakeholder concluded that if we wanted to deliver best practice in the engagement arena we needed to set up the sub groups as discussed.

Economic Assumptions for Load Forecasting

- One panellist highlighted the issues surrounding forecasting housing numbers. Not only is there often a huge difference between the government forecasts and the actual numbers built by developers, but there are also significant variations regionally. BG confirmed that we don’t tend to use the government figures for that reason. We work with historic ‘actuals’ to inform our model and to estimate future trends. Another stakeholder suggested that incentives may result in a stepped change in growth.

- A stakeholder asked whether the move to electric vehicles had been included in the modelling to which BG confirmed it had.

- Another stakeholder acknowledged that Ofgem do not allow for speculative investment in the network, however he asked whether we could use our forecast models to negotiate with Ofgem. KH advised that our regulator had asked all DNOs to forwards information about strategic projects where growth was not as certain as when the business plans were first submitted. Ofgem are looking to develop a process to allow some flexibility within the business plans.



- One stakeholder asked how we forecast growth in the combined heat and power (CHP) market. BG confirmed we needed to do more work in modelling for this technology but at present it is included in our Heat Pump model. Whilst there is an expectation for growth, this has been the case for the past 20 years. Another stakeholder stated that historically the CHP technology was considered to be unreliable and expensive. Now there is more confidence in the technology there is likely to be more take up.

- A stakeholder asked whether we had done any work in forecasting the adoption of grid storage. BG confirmed that at present there was little take up of this technology but we recognise the need to model it in the future.

- Another stakeholder asked how we translate global figures into local plans. CN confirmed that we take a global view and disaggregate down to where load will arrive.

- SG concluded by stating that there is no clarity from the government

Innovation Refresh Update

- One stakeholder asked whether any of the outputs from our Low Carbon London project had now been rolled out as BAU? CN confirmed that the profiles from the smart meter and Electric Vehicle (EV) trials had fed into our modelling.

- Another stakeholder asked about variable tariffs. CN advised that tarrifs were set by suppliers, but acknowledged there was work to be done within the industry. In our own project we had set four tariffs for simplicity. Results suggest that customers will change their usage habits in response to receiving the right price signal.

- A panellist mentioned that some of our innovation in safety can have a negative impact on farmers giving gave the example of line hight and pole positioning. Some machinery that can be used in the EU cannot operate in the UK due to the restrictions in line hight. Within the farming community there is a feeling that our innovation stifles development in their industry. MR agreed that if our actions block their economic growth then we would need to explore further.

- Another stakeholder added that the level of wayleaves payments in no way compensates for the loss of crop value.

- A panellist added that the six months that our wayleave process can take also impacts on delivery of broadband expansion plans. At present there is no collaborative work to address this. It was agreed to take this off line.

- Another stakeholder suggested that the wayleave process needed an overhaul nationally.



- One stakeholder stated that the fact UK Power Networks were happy to share issues with stakeholders and invite their input and feedback was very positive, and encourages the sharing of best practice from outside of the business.

- A stakeholder asked whether there was funding available to adopt the ideas submitted by our stakeholders. MR confirmed that if there was a strong business case to adopt and develop any proposal then we would find the funding.

Losses Strategy Overview

- A stakeholder asked whether the cost of losses were built into the Distribution Use of System (DUoS) charge. AB confirmed that indirectly they were passed on within the costs of network reinforcement.

- Another stakeholder asked why there were export limits on Photovoltaic (PV) generation when there is a limiter in place. AB agreed to share the contact details of those in the business who can help with this type of enquiry.

- SG called for all in the room to lobby government on the energy strategy.



8. Your feedback

What were the strengths of the event? What did you find most useful or relevant and why?

- Presentations were all very good. Vulnerable / fuel poor which is our focus was well represented.

- Some presentations were quite business focussed and technical – whilst very interesting and informative not quite relevant.

- For me this style of event was not conducive to a 2 way discussion between you and us as stakeholders. The style allowed you to talk to us (broadcast) but with only a few questions and no real discussion opportunity (such as break outs or facilitated discussions). It felt rather one way.

- + Wide ranging group. - Reduce the opportunity to drill down, so technical /non-technical sub groups would be really helpful.

- Location – city centre – traffic! - Impressed with quality of all the speakers. The losses session was interesting and had not

appreciated this problem before. Feedback from the audience was very well received. - Good event but not much relevance to our organisation in relation to the PSR and deaf

people. - Strengths – Open environment created to enable feedback. Presented well. Inclusive.

Weakness – Anticipation of issues i.e. presentation assumes what audience issues may be. - All ok

0% 20% 40% 60% 80% 100%

I found the event useful

I found the content easy to understand

The venue was suitable for this event

The material covered was relevant

The presenters delivered the material well

There was enough time for me to expressmy views and provide feedback

About the Event

Strongly Agree

Agree

Disagree

Strongly Disagree



- Very informative & interesting. Honest - I still believe we should move around other towns/cities within the region – Cambridge,

Norwich, Peterborough, Kings Lynn, Bury St Edmunds etc. - W – Location was difficult to get to in the centre of Ipswich. S – Great input from UKPN and

will help for future engagement W – Good to understand others ‘friends’ issues but do need some more specialist sub groups.

- Might have been good to run a few break outs for people interested in specific topics. More quantitative outcome metrics would show real progress

- Forecasting explanation. Losses strategy - Venue difficult to get to in centre of Ipswich. Need to split stakeholder meetings into more

specific groups e.g. rural / agricultural to keep topics relevant. Not as useful as last year’s meeting

- The events are laudable and of great benefit. Whilst it may be difficult, non-utilities attendees would benefit from attendance of other utilities, to ensure there is debate around integration of development across the utilities i.e. telecoms, water, gas.

What are the key messages you will take from the event?

- Willingness of UKPN to engage with stakeholders - Lots of opportunities for my organisation moving forward. Good opportunities to network. - Losses – Actual figures used. Plan going forward. - Working with other agencies to identify vulnerable customers – need to progress this piece

of work. - Very interesting presentations, I’ve learned a lot more about UKPN. - That you are really trying to listen and engage and use stakeholders as a positive resource

within the business which is very positive. - I would like my Councils in West Suffolk to be able to participate in the thematic groups.

Please send invite to DG Surgery - That UKPN are very open to feedback and act on it. - Interested in how access is made through PSR for vulnerable people with no internet. Some

of our clients may be elderly and have no internet access. - Opportunities to jointly aid economic growth and best practice. - UKPN engage actively with all stakeholders - UKPN working hard for the future! - Importance of innovation. Network losses. Specialist stakeholders & sub groups - UKPN are open to discuss / develop - Open discussion. Making some good progress. Government policy changes and indecision

is a real barrier. - Need for better communication between LAs and UKPN



- UKPN are focussed on improvements - No national policy in place - Very interested in getting involved with any rural / farming specific group meetings - UKPN dealing with vulnerable people. Info to public - UKPN are committed to stakeholder engagement as it enables to developing their future

strategy. - The changes to the network should enhance resilience and security of supplies. - The percentage of domestic bills that goes back to UKPN

Any other comments you would like to make?

- I would like to attend the Losses event scheduled for January 16 - Could a copy of the presentation be made available to delegates please – thank you. - Copy of agenda would have been useful on each table for reference (speaker name, subject

/ topic) - Setting up dedicated local authority helpline for communicating during disruptions. - Essential to initiate sub-groups - Very good event - Many thanks to UKPN for organising

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

I have a clear understanding of UK Power Networks’ future key engagement themes

I have a clear understanding of how UKPNforecasts both electricity demand and low

carbon technologies.

I have a clear understanding of UK Power Networks’ innovation strategy

I believe UK Power Networks' innovationstrategy will support them to deliver the

performance they aspire for RIIO ED1I believe that UK Power Networks Losses

Strategy will deliver the performance theyaspire to for RIIO-ED1

About the Business

Strongly Agree

Agree

Disagree

Strongly Disagree



- My interests lie in the low carbon and smart technology areas & especially driving this forward in Suffolk.

- Very impressed by Ben Gilding. Allan Boardman has great presentation skills. - There is evidence that UKPN has listened to customers / partners and acted upon

suggestions - A great process that can be enhances. Greater interaction with LRFs as a ‘specialist’ sub

group may be of benefit - Brownouts are a big problem affecting milking parlours and scientific equipment and

wondered if this could be brought up as a question/issue in future and if everyone else was having same problem

Are there any other topics/issues you would like to discuss at future events?

- Focus group on issues of concern to agriculture and land owners considering things like: - Safety – repair / upkeep of the network, access, connections - Streetworks, Sharing information and stakeholder strategy with other utilities. Opportunities

for collaborative working. - Would be very useful to set up a focus group to include all utility suppliers to look at impact

on vulnerable customers, data sharing and also SME’s where disruptions can have considerable implications / business continuity issues. These could be organised through LRFs.

- I’d like the chance to really get into some of these topics in a better conversation. Thank you

- Need to have focused group. Issues for consumers are very different to other stakeholders. - More feedback on innovation projects. - Response and information during power outages for stakeholders, both general public and

public sector responders & vulnerable customers. - More of the same - Special sub groups:

o Connections & uploads o Vulnerable & special needs o Agricultural & farming o Heavy industry o Electric Vehicles

- please include me in a sub group for large customers / connections / generation - How UKPN are working with development industry / local authorities in catering for future

demand



9. Next steps We will build on the feedback collected in the three sessions of Panel 11 to create a consolidated actions report. The aim of the report will be to highlight the actions suggested by stakeholders in the three sessions, find common themes and messages, and explain how we are acting or preparing to act on the feedback collected. We will also report back to stakeholders with progress in Critical Friends sessions in 2016.

10. Key contacts For further information please contact us on [email protected] To speak to one of our Stakeholder Engagement team please contact Andy Jenner on 07875 117136 If you would like to invite a friend or colleague to contribute views, our consultation continues online at http://www.ukpowernetworks.co.uk/internet/en/have-your-say/

mailto:[email protected]

http://www.ukpowernetworks.co.uk/internet/en/have-your-say/

Documents

‘Critical Friends’ Stakeholder Panel · Ben Gilding (BG) shared our approach to forecasting electricity demand and generation. He went He went on to present changes that we are