The Role of Customers in the Strategic Review of Charges Process in the Water Industry in Scotland

This paper summarises recent experience in the water industry in Scotland following changes to the regulatory framework to significantly enhance the role of customers in the regulatory process.
The paper illustrates how lessons learned from innovative approaches to customer engagement in other countries were adapted to provide a mechanism for customer engagement, including establishing a new customer body for water in Scotland (the Customer Forum) to engage directly with the regulated utility on areas of price setting and service improvements for the 2015-21 Strategic Review of Charges.
The paper concludes that the Customer Forum significantly improved outcomes for customers, including ensuring price increases below the rate of inflation as well as stability of prices and ongoing improvements in service levels.
The Customer Forum also helped to enhance the robustness of the service performance measures for Scottish Water, including a new focus on customer experience. As these new measures are implemented there will be the opportunity to assess their effectiveness and for the Customer Forum to continue to adapt the monitoring mechanism to ensure they are delivering maximum benefits for customers.

Winner #1 of the 2015 ERRA Regulatory Research Award.