Customer Engagement Insights 1 Residential customers were engaged

Customer Engagement Insights 1

Residential customers were engaged to understand the level of support for a Time of Use tariff Western Power take its responsibility to deliver a safe and reliable electricity service to 1. 1 million homes and businesses in Western Australia seriously. A way to fulfil this responsibility is by engaging with customers to better understand their evolving needs. From field service crews through to office staff, Western Power connects customers with safe, reliable and affordable electricity. To successfully meet the aspiration of serving customers, Western Power engaged with residential customers to explore the level of support for Time of Use (TOU) tariffs. Several objectives were kept in mind throughout the engagement: • Educate customers in the way they currently pay for electricity. • Understand current behaviour patterns in electricity usage and preferences in TOU tariff options. • Gain insight in to the way customers behave under a TOU tariff including trade offs (monetary versus convenience) customers are willing to make. • Understand current thinking around smart meters and customer preferences in monitoring electricity usage. This remainder of the document explores: • Key themes covered during customer engagement. • Approach used to capture both qualitative and quantitative responses. • The methodology undertaken to engage with customers. • Key insights. 2

Customer engagement themes 3

Three major themes were explored with customers throughout the engagement Three themes were used to ensure customer feedback was collected in a structured and consistent format. Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters • Educate customers of TOU and flat rate tariffs. • Understand current customer electricity usage patterns. • Understand customer electricity usage patterns across TOU tariff options. • Understand whether customers support a TOU tariff. • Understand electricity usage patterns and trade offs customers are willing to make across TOU tariff options. • Understand the level of support and willingness for customers to change behaviour to benefit from potential savings a TOU tariff offers. • Educate customers around smart meters and associated costs. • Understand customer attitudes towards smart meters. • Educate customers around ways to monitor electricity usage. • Understand customer preferences in being informed of electricity usage. 4

Two Time of Use tariff options were introduced to understand the level of customer support Two TOU tariff options were explored to understand the level of customer support. Option 1 Option 2 Option 1: • A long off peak period during the day and late in to the evening. • 3 hour shoulder period. • 6 hour peak period. Key: Off Peak Shoulder Option 2: • A long off peak period during the day and late in to the evening. • 5 hour shoulder period. • 3 hour peak period. Peak Flat Rate (Current) 5

Approach and methodology 6

Customers were engaged through an online survey and a series of workshops In total, 500 customers engaged across an online survey and 26 across workshops. Customers across workshops Customers across online survey 1 Online survey was distributed amongst 500 customers. 18 th – 25 th October Customer engagement dates. 500 Customers were contacted and participated in an online survey. 3 25 th – 27 th October 10 min Online survey time. Workshops were conducted across 26 customers. 26 30 Customers were contacted and 26 participated in workshops. 2 hours Workshop time. Customer engagement dates. Online survey participants were recruited by an independent and accredited market research agency. A key consideration was around the sample size to enable accurate results. Workshop attendees were recruited by an independent and accredited market research agency. Attendees were incentivised with an $80 cash voucher to participate in accordance with common market research practices. • • • Participants were selected from Metropolitan areas across Western Australia. Participants were the decision maker or involved in decisions to do with electricity consumption. Residents were recruited on the basis of age, household income, property ownership and geography. • Participants were selected from North, Hills, South areas of Western Australia. Participants were the decision maker or involved in decisions to do with electricity consumption. Residents were recruited on the basis of age, household income, property ownership and geography. 7

The method for customer engagement remained consistent across both online survey and workshop agendas A consistent approach was used for all customer engagement in covering the three themes. Section Screening / classification Household characteristics Online Survey • Identify electricity decision maker. • Understand solar panel interests and current energy mix. Understand likelihood of solar panels and battery installations. Understand key times of the day customers leave the house vacant. Provide overview of Western Power and its role. Understand customer preferences in paying for electricity at a single rate or using a TOU rate. Provide overview of TOU tariff options and understand level of support. Understand household appliance make up. Understand the trade-offs customers are willing to make regarding price and convenience across TOU preferences. • • Theme 1 Tariff evaluation Theme 2 Changes to behaviour Theme 3 Smart meters and willingness to pay Demographics • • • Assess level of interest in Smart Meter. Understand customer preferences in monitoring electricity. Understand the trade-offs customers are willing to make regarding price and convenience across smart meters. Identify High level demographics / firmographics. Section Workshop • Provide overview of how workshop findings will feed in to remainder of work at Western Power. • Provide overview of role of Western Power and key customers. Understand customer views on the role of Western Power. Understand current customer usage patterns. Provide overview of peak demand situation to enable customers to understand the impact of the network and associated peak demand cost implications. Provide overview of TOU tariff options. Understand the trade-offs customers are willing to make between price and convenience across TOU tariff preferences. Understand whether customers would be willing to shift their behaviour for a monetary incentive. Introduction Western Power overview Theme 1 Introduction to tariffs • • • Theme 2 Overview of commonly used appliances • • • Theme 3 Smart Meters • Assess level of interest in smart meters. Understand customer preferences for monitoring electricity usage. Understand the trade-offs customers are willing to make regarding price and convenience in the implementation of smart meters. 8

The online survey was distributed amongst 500 customers completed an online survey. The design of the survey enabled Western Power to gain an understanding of customer preferences across the three themes. Online survey method Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters • The design of the survey ensured customers understood the difference between the current flat rate and a TOU tariff. • Participants were provided with adequate information around Western Power’s operations. The education enabled customers to better understand options Western Power are considering. This allowed customers to answer all questions in an informed manner. • Customers were split in to two groups in first seeing the TOU tariff options. Half of the group were asked about Option 1 first while the others were asked about Option 2 first. The split enabled consistent results and showed an unbiased view of a preferred option. Online survey method • Customers were provided with a series of scenarios to understand the level of support for using appliances during off -peak periods. Customers were given options to understand the level of support for trade offs made between convenience and monetary incentives. • Customers were provided questions to understand the level of support for smart meters. • Customers were provided questions to test their willingness and likelihood of installing smart meters. This was tested by comparing customer preferences in receiving a smart meter at a fixed cost versus spreading the costs across the tariff. • Participants were also given an opportunity to identify their preferred channels for receiving electricity usage information. This was tested by giving customers options and understanding their preferences. Refer to Appendix 1 for detail 9

An online survey was distributed amongst 500 customers The design of the survey enabled Western Power to gain an understanding of customer preferences across the three themes. Online survey Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method Refer to Appendix 1 for detail 10

A series of workshops were conducted amongst 26 customers participated in workshops. The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop method • Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters The design of the workshops ensured there was adequate time for participants to enter into a dialogue with Western Power leaders. This was a conversation with customers to inform future thinking around TOU tariffs. • Participants were educated around Western Power’s operations. The education was to designed to help customers better understand options Western Power is considering and to provide customers context for the challenges Western Power is facing regarding peak demand. • Customers were educated around TOU tariffs at different stages of the workshop. 2 out of 3 workshop participants received education of upfront, while 1 workshop received education after a discussion around the initial level of support for TOU tariffs. The rationale for the education switch was to understand whether customers showed a different level of support pre/post education. Online were survey method • Customers provided with an activity sheet to identify current electricity usage patterns. • Participants were then provided with an opportunity to identify any changes in behaviour across the two TOU tariff options. The activity was designed to enable customers to map individual household goods and typical usage times across the day. This was designed to better understand customer preferences and willingness to make changes in considering potential monetary incentives for switching behaviour. • Customers were educated around smart meters to enable an informed conversation. • The discussion topics covered the level of support for smart meters and the preferred channels for monitoring electricity usage. Participants were given an opportunity to identify their preferred channels for receiving electricity usage information. This was tested by giving customers options and understanding their preferences. • Customers were given the opportunity to discuss the cost implications and payment options for the implementation of smart meters. Preferences around splitting costs across tariffs versus a one of cost were discussed as potential options. Refer to Appendix 2 for detail 11

A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method Refer to Appendix 2 for detail 12

Insights 13

Western Power’s customer engagement resulted in 11 insights Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters 1 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR A TOU TARIFF. 2 A TOU TARIFF WITH A LONGER PEAK PERIOD IS PREFERRED OVERALL, ALTHOUGH A SHORTER PEAK PERIOD IS ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE WITH THEIR USAGE. 3 TOU TARIFFS ARE VIEWED AS PENALISING THOSE ON FIXED INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVE THEY CAN CHANGE THEIR BEHAVIOUR WITHOUT IT IMPACTING NOTICEABLY ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING A TOU TARIFF IS LARGELY CONSISTENT - SAVING MONEY. 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. 14

Theme 1 – TOU tariff design insights 15

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 1 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR A TOU TARIFF. 2 A TOU TARIFF WITH A LONGER PEAK PERIOD IS PREFERRED OVERALL, ALTHOUGH A SHORTER PEAK PERIOD IS ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE WITH THEIR USAGE. 3 TOU TARIFFS ARE VIEWED AS PENALISING THOSE ON FIXED INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVE THEY CAN CHANGE THEIR BEHAVIOUR WITHOUT IT IMPACTING NOTICEABLY ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING A TOU TARIFF IS LARGELY CONSISTENT - SAVING MONEY. TOU tariff design 16

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 1 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR A TOU TARIFF. 2 A TOU TARIFF WITH A LONGER PEAK PERIOD IS PREFERRED OVERALL, ALTHOUGH A SHORTER PEAK PERIOD IS ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE WITH THEIR USAGE. 3 TOU TARIFFS ARE VIEWED AS PENALISING THOSE ON FIXED INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVE THEY CAN CHANGE THEIR BEHAVIOUR WITHOUT IT IMPACTING NOTICEABLY ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING A TOU TARIFF IS LARGELY CONSISTENT - SAVING MONEY. 2 in 5 The workshop showed that most customers currently use a majority of their electricity around: Residents disagreed with a TOU tariff in principle in the survey. While both tariff options had similar levels of appeal, customer comments showed there was less appeal for a TOU option. In isolation, 2 in 5 customers chose Option 1 above the current Flat Rate. 9 am, 6 pm and 9 pm There was a general agreeance amongst customers that electricity was generally used at the same time across most residents – with the peak time being: 6 pm – 9 pm In isolation, 2 in 5 customers also chose Option 2 above the current flat rate. “I use all my power at the same time every day…I don't turn much on in the morning because of school…I come home and then get the jobs done” “After 6 PM is when I use appliances” 17

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 1 THELEVELOF OFEDUCATION PROVIDED THE PROVIDED TO TOCUSTOMERS RESIDENTSDIRECTLYIMPACTSTHE LEVEL OF SUPPORT TOU TARIFF. LEVEL SUPPORTFOR OF AA TOU 2 A TOU TARIFF WITH A LONGER PEAK OPTION 1 IS THE PREFERRED OVERALL, PERIOD IS PREFERRED OVERALL, ALTHOUGH BOTH TARIFFS ARE ALTHOUGH A SHORTER PEAK PERIOD IS APPEALING TO THOSE WHO CAN BE ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE THEIR USAGE. FLEXIBLE WITH THEIR 3 BOTHTARIFFS TARIFFARE OPTIONS ARE AS TOU VIEWED AS VIEWED PENALISING ONOR FIXED THOSE ON FIXEDTHOSE INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVEWHO THEYCANNOT CAN HOUSEHOLD ROUTINES CHANGE THEIR IT CHANGE THEIRBEHAVIOURWITHOUT THEIR IT IMPACTINGNOTICEABLYON ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING EITHER TARIFF OPTION THE PRIMARY MOTIVATION FOR IS CHOOSING TOU TARIFF -ISSAVING LARGELY A CONSISTENT - SAVING MONEY BEING THE PRIMARY MOTIVATION. 60% Over half (60%) of participants who did not receive the upfront education in the workshop opted for a flat rate and felt confused and did not understand the purpose of a TOU tariff. It was observed that a majority of customers without the education upfront were confused and questioned the intention and purpose of a TOU tariff. “Do we know what the times are for the TOU tariff? ” “I think it might cost me more to use it and it might be around the times when I have to do everything” “Wouldn’t it cost me more? ” 18

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 80% A majority (80%) of participants who did not receive the upfront education switched to Option 1 post education. 1 THELEVELOF OFEDUCATION PROVIDED THE PROVIDED TO TOCUSTOMERS RESIDENTSDIRECTLYIMPACTSTHE LEVEL OF SUPPORT TOU TARIFF. LEVEL SUPPORTFOR OF AA TOU 2 A TOU TARIFF WITH A LONGER PEAK OPTION 1 IS THE PREFERRED OVERALL, PERIOD IS PREFERRED OVERALL, ALTHOUGH BOTH TARIFFS ARE ALTHOUGH A SHORTER PEAK PERIOD IS APPEALING TO THOSE WHO CAN BE ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE THEIR USAGE. FLEXIBLE WITH THEIR 3 BOTHTARIFFS TARIFFARE OPTIONS ARE AS TOU VIEWED AS VIEWED PENALISING ONOR FIXED THOSE ON FIXEDTHOSE INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVEWHO THEYCANNOT CAN HOUSEHOLD ROUTINES CHANGE THEIR IT CHANGE THEIRBEHAVIOURWITHOUT THEIR IT IMPACTINGNOTICEABLYON ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING EITHER TARIFF OPTION THE PRIMARY MOTIVATION FOR IS CHOOSING TOU TARIFF -ISSAVING LARGELY A CONSISTENT - SAVING MONEY BEING THE PRIMARY MOTIVATION. It was observed that once informed of the purpose and greater impact of peak demand, customers were willing to shift their preferences based on the benefits received across the community. “My switch in option from flat to option is based on education” “You didn’t have the graph earlier so I didn’t know “ “I changed from flat rate to current because the rest of the usage dropped significantly so I felt I could optimise my usage” 19

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 1 THELEVELOF OFEDUCATION PROVIDED THE PROVIDED TO TOCUSTOMERS RESIDENTSDIRECTLYIMPACTSTHE LEVEL OF SUPPORT TOU TARIFF. LEVEL SUPPORTFOR OF AA TOU 2 A TOU TARIFF WITH A LONGER PEAK OPTION 1 IS THE PREFERRED OVERALL, PERIOD IS PREFERRED OVERALL, ALTHOUGH BOTH TARIFFS ARE ALTHOUGH A SHORTER PEAK PERIOD IS APPEALING TO THOSE WHO CAN BE ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE THEIR USAGE. FLEXIBLE WITH THEIR 3 BOTHTARIFFS TARIFFARE OPTIONS ARE AS TOU VIEWED AS VIEWED PENALISING ONOR FIXED THOSE ON FIXEDTHOSE INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVEWHO THEYCANNOT CAN HOUSEHOLD ROUTINES CHANGE THEIR IT CHANGE THEIRBEHAVIOURWITHOUT THEIR IT IMPACTINGNOTICEABLYON ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING EITHER TARIFF OPTION THE PRIMARY MOTIVATION FOR IS CHOOSING A TOU TARIFF IS LARGELY CONSISTENT WITH SAVING CONSISTENT - SAVING MONEY BEING THE PRIMARY MOTIVATION. Option 1 The survey results showed Option 1 was preferable overall; although a sizeable proportion also found the flat rate appealing. Almost 1 in 2 customers felt they would ‘least likely’ choose Option 2, with only a quarter choosing it as their first preference. 50% A large portion of attendees in the workshop who had families chose Option 1. Participants with a family, or who were at home during the day preferred Option 1. They predicted 3 -9 pm to be a “busy time” for electricity consumption. Moreover, only 1 in 5 customers liked Option 1 the least, the lowest of the three options presented. “Option 1 is more fair for the average person” “I get scared about the massive price increase in Option 2… Option 1 is a bit safer for me “ “Picked option 1 because it works the same in a costing sense - 3 kids they are going to do what they are going to do anyway…this seems like a cheaper option “ “Option 1 because I'm home in the morning so I can move some of the items to early times” 20

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 1 THELEVELOF OFEDUCATION PROVIDED THE PROVIDED TO TOCUSTOMERS RESIDENTSDIRECTLYIMPACTSTHE LEVEL OF SUPPORT TOU TARIFF. LEVEL SUPPORTFOR OF AA TOU 2 A TOU TARIFF WITH A LONGER PEAK OPTION 1 IS THE PREFERRED OVERALL, PERIOD IS PREFERRED OVERALL, ALTHOUGH BOTH TARIFFS ARE ALTHOUGH A SHORTER PEAK PERIOD IS APPEALING TO THOSE WHO CAN BE ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE THEIR USAGE. FLEXIBLE WITH THEIR 3 BOTHTARIFFS TARIFFARE OPTIONS ARE AS TOU VIEWED AS VIEWED PENALISING ONOR FIXED THOSE ON FIXEDTHOSE INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVEWHO THEYCANNOT CAN HOUSEHOLD ROUTINES CHANGE THEIR IT CHANGE THEIRBEHAVIOURWITHOUT THEIR IT IMPACTINGNOTICEABLYON ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING EITHER TARIFF OPTION THE PRIMARY MOTIVATION FOR IS CHOOSING A TOU TARIFF LARGELY CONSISTENT WITH -ISSAVING CONSISTENT - SAVING MONEY BEING THE PRIMARY MOTIVATION. The online survey results revealed that both options were considered particularly unfair on those who believed they were unable to change their usage patterns. In isolation, Option 1 was less appealing to 55 -64 year old customers and those who had at home duties. In isolation, Option 2 was less appealing to the 35 -44 year old age bracket. 50% of workshop participants who initially chose the flat rate maintained their preference after education and further understood the impacts of peak demand. 24% of customers preferred the flat rate option regardless of the two tariff options. These customers enjoyed the convenience of not paying more at peak times and were not willing to adjust their habits. “Picked flat rate because the 3 hour window is not attractive… we have a baby so its not going to happen” “Flat rate is still cheaper for me - and I'm not going to make anything out of changing” 21

Theme 1 TOU tariff design resulted in 4 key customer insights Theme 1 TOU tariff design 25% Roughly 25% of customers in the workshop opted for Option 2 to cater for activities in the evening. 1 THELEVELOF OFEDUCATION PROVIDED THE PROVIDED TO TOCUSTOMERS RESIDENTSDIRECTLYIMPACTSTHE LEVEL OF SUPPORT TOU TARIFF. LEVEL SUPPORTFOR OF AA TOU 2 A TOU TARIFF WITH A LONGER PEAK OPTION 1 IS THE PREFERRED OVERALL, PERIOD IS PREFERRED OVERALL, ALTHOUGH BOTH TARIFFS ARE ALTHOUGH A SHORTER PEAK PERIOD IS APPEALING TO THOSE WHO CAN BE ALSO APPEALING TO THOSE WHO CAN BE FLEXIBLE THEIR USAGE. FLEXIBLE WITH THEIR 3 BOTHTARIFFS TARIFFARE OPTIONS ARE AS TOU VIEWED AS VIEWED PENALISING ONOR FIXED THOSE ON FIXEDTHOSE INCOMES OR THOSE WITH INFLEXIBLE HOUSEHOLD ROUTINES WHO DO NOT BELIEVEWHO THEYCANNOT CAN HOUSEHOLD ROUTINES CHANGE THEIR IT CHANGE THEIRBEHAVIOURWITHOUT THEIR IT IMPACTINGNOTICEABLYON ON THEIR LIFESTYLE. 4 THE PRIMARY MOTIVATION FOR CHOOSING EITHER TARIFF OPTION THE PRIMARY MOTIVATION FOR IS CHOOSING A TOU TARIFF LARGELY CONSISTENT WITH -ISSAVING CONSISTENT - SAVING MONEY BEING THE PRIMARY MOTIVATION. It was observed that customers who worked during the evenings preferred Option 2 for their greater ability to control behaviour. “Option 2 would suit my life style better and I work evenings and won’t be home” “Option 1 penalises the people who can’t move - Option 2 is better for me” “I think the second option only works for people who stay at home all day” 22

Theme 2 – Customer trade offs insights 23

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. Customer trade offs 24

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 Some customers in the workshop believed that potential savings alone were not enough of an incentive to change behaviour. Customer trade offs 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. Whilst some customers discussed that their potential cost savings would not be enough in isolation to drive a change in behaviour, it was observed that most felt the change in behaviour came from a place of the overall benefit to the community in reducing peak demand. This was most evident in customers who received the education upfront. “Is $50 a year enough of an incentive to change my behaviour? Probably Not” ” It doesn’t worry me but its more the system usage. . The financials are minor. . Its only $50 a year but are you going to change all your behaviour for $50 for year? “Its not so much the money it’s the education but I didn’t realise the whole story and now I understand that if you knew more about it you can change your behaviour” 25

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 Customer trade offs 5 6 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. The online survey revealed that customers were more willing to change the use of washing machines, dishwashers and clothes dryers as this was considered minimal impact on their lifestyle. While 2 in 3 customers would consider changing how they use their washing machine, 1 in 4 did not wish to change their appliance usage at all. The workshops revealed that residents were more willing to change their use of dishwashers across both tariff options. If peak pricing was introduced, most customers discussed the appliance they would be most willing to shift to reap cash benefits would be the dishwasher. This was consistent across both TOU tariff options. There was a general agreeance that a dishwasher was easy to shift with most customers opting to shift to early morning or after 9 pm. Similarly, if peak pricing was introduced, most revealed they would be willing to consider changing pool pump, washing machine, dryer and dishwasher usage. “I could change my dishwasher time and cook a little earlier to change my behaviour” 26

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 The workshop revealed that items such as TV and electric cook tops were relatively insensitive to off peak, shoulder and peak periods. Customer trade offs 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. It was observed that comfort and convenience were prioritised above monetary impacts, with few willing to change behaviour with respect to their time and use of electric cook top / oven. Although some customers discussed the idea of changing behaviour, most agreed they would in reality not be willing to make such shifts. “I could cook a little earlier in the shoulder and get he aircon on earlier in the day but I don't think I would sacrifice the TV” I'm not interested in the inconvenience” “Tv and stove cant change…. If it was the other option I could move the aircon out…” “I’d get away from electricity during cooking times because its cheaper 27

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 Customer trade offs The workshops revealed that customers were less willing to move appliances that greatly impacted their life. Small shifts in behaviour were however ok. 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. “This time I'm turning my air conditioner off “ 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. “I can move my bore pump to first thing in the morning or 9 pm after” “I’d phase my air con…. I'd turn on my air conditioner for a specific period of time “ “I cant move cooking and TV and move my air conditioner earlier because of shift worker and washing easier to do during the day “ 28

Theme 2 Customer trade offs resulted in 4 key customer insights Theme 2 Customer trade offs 5 CUSTOMERS ARE GENERALLY WILLING TO CHANGE CURRENT BEHAVIOUR UPON UNDERSTANDING THE IMPACT OF PEAK DEMAND. 6 CUSTOMERS ARE WILLING TO CHANGE BEHAVIOUR ACROSS WASHING MACHINES, DISHWASHERS AND DRYERS ITEMS IF THE CHANGE IS EASY TO MAKE WITH A MINIMAL LIFESTYLE IMPACT. 7 CUSTOMERS ARE LESS LIKELY TO MOVE LARGER APPLIANCES SUCH AS AIR CONDITIONERS AND ELECTRIC OVENS/COOKTOPS AS THIS HEAVILY IMPACTS ON LIFESTYLE CHOICES. 8 COMFORT & CONVENIENCE WERE OF GREATER IMPORTANCE THAN ELECTRICITY BILLS; WITH FEW WILLING TO MAKE MAJOR SHIFTS IN THEIR AIR CONDITIONER USAGE DURING PEAK PERIODS. The survey revealed that Comfort & convenience were of greater importance than electricity bills; with few willing to make major shifts in their air conditioner usage during peak periods. The pattern was largely consistent across segments, however women were more likely to turn their air conditioner down 3 o. C than men. Participants who have solar panels were less inclined to alter their lifestyle to benefit from the “off peak” rates. Workshop customers who have solar power were less interested in changing behaviour as they believed they already benefited with monetary savings from their current behaviours. Customers appeared to focus more on how changing their usage impacted on their lifestyle rather than their electricity bill. “I basically use my appliances like I would normally use them - the tariff structure is not important in changing my behaviour” “We've already made the change through solar …. So trying not to contribute to the peak” “Pool pump just put it in the middle of the night “ 29

Theme 3 – Smart meter insights 30

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. Smart meters 31

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 Smart meters 9 10 11 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. 1 in 2 The survey results showed that without considering price, 1 in 2 customers were likely to install a smart meter if given the option. The survey revealed there was some confusion around the purpose of smart meters, with many believing they can monitor individual appliances. The workshop revealed that a majority of customers did not understand the benefits of smart meters without education. Customers unlikely to install a smart meter had little interest in monitoring their electricity usage. “What is the benefit to us as an end user in having smart meter? ” “Are they able to tell you when they are using how much power? ” “In the foreseeable future…. You can have an app that you can see the information? “ “I think the newer technology is better than the old ones… my technology is too old” 32

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 It was observed that customers were more open to the idea of paying for smart meters once educated. Smart meters It was observed that a majority of customers were unclear around the benefit of smart meters. 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. Once educated, customers were open and more likely to support the implementation of smart meters however not all customers felt this way. “Not a fan of the smart meter expensive and I cant see us using it a lot…. If I know when the peak times are then I don’t need a smart meter to do it…. “ “I don’t understand the reason why we need one” “I don’t know if people would really use it then than to look and write it down” 33

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 Smart meters 50% More than 50% of participants in the workshop were interested in having smart meters to monitor their usage patterns. 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. It was observed that most residents with families were interested in monitoring their electricity usage. “I like analysing things and like to know” “I like to know if its peaking and knowledge of what uses electricity and kids around who is using it” 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. “Id be interested in base line usage, solar putting back in to grid and at what times… if I have aircon cranked at certain times when ? ” “Smart meters gives you more customer control” “They were also keen on using the smart meter to monitor electricity consumption, especially those with families. ” 34

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 Smart meters 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. 2 in 3 The survey revealed that a majority of residents were interested in monitoring their electricity usage and preferred an in home display. A majority of residents in the workshop were interested in monitoring their electricity usage and preferred an in home display. An in-home display was seen as the preferred channel, followed by an app (particularly for younger residents). 2 in 3 customers were interested in monitoring their electricity usage. The key appeal of ‘real time’ monitoring was the ability to understand usage and then amend behaviours to save money. Those who did not like the idea felt they were already limiting their usage and would find monitoring a chore 35

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 Smart meters 9 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. 10 A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. 11 DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. The survey results showed that despite the high interest in smart meters, few felt they should pay for installation (at $30 per year or $150 upfront). Only 1 in 4 customers felt that $30 per year for smart meters was justified, with retirees/older residents particularly concerned. These customers felt they would not be able to recoup the set-up costs. Less than 1 in 5 indicated they were likely to install a smart meter costing $150 in the next 2 years. A small group of customers in the workshop indicated they were open to the idea of paying for smart meters if the costs were to be spread across the tariff. There was also concern amongst those who already had a smart meter that they would be required to pay again “At $25 a year I would do it” “I think maybe keep it same price but $20 over 15 years” 36

Theme 3 Smart meters resulted in 3 key customer insights Theme 3 Smart meters 9 10 11 THE LEVEL OF EDUCATION PROVIDED TO CUSTOMERS DIRECTLY IMPACTS THE LEVEL OF SUPPORT FOR SMART METERS. A MAJORITY OF CUSTOMERS WERE INTERESTED IN MONITORING THEIR ELECTRICITY USAGE WITH A PREFERENCE FOR IN HOME DISPLAYS. DESPITE THE HIGH INTEREST IN SMART METERS, CUSTOMERS FELT THE IMPLEMENTATION COSTS ACTED AS A DETRACTOR FOR THEIR LEVEL OF SUPPORT. The survey results showed that the benefits or savings Western Power may achieve was the key reason why customers felt they should not pay for the installation. The survey results showed that younger customers were more open to pay, however older customers were strongly opposed to any increase in their bill. Customers felt passionately about the charge, with sentiment particularly high amongst those who found it unjustified. Younger customers were more likely to view that $30 per year was justified. Although monitoring usage was the key appeal of smart meters, even those who find the idea “very appealing” felt that the charge was unjustified. Those who felt it was justifiable believed the cost was reasonable and believed they would save $30+ per year by monitoring their usage. There was a strong relationship between age and perceived justification, with older customers less open to the charge. Those who work full-time were most likely to install a smart meter, while older customers were again less interested in the technology. For those who felt it was unjustified, in general it was not the additional $30 , but rather the cost of electricity as a whole. 37

Appendix 38

Appendix 1 39

Appendix 1 - The online survey was distributed amongst 500 customers The design of the survey enabled Western Power to gain an understanding of customer preferences across the three themes. Online survey Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 40

Appendix 1 – An online survey was distributed amongst 500 customers The design of the survey enabled Western Power to gain an understanding of customer preferences across the three themes. Online survey Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 41

Appendix 1 – An online survey was distributed amongst 500 customers The design of the survey enabled Western Power to gain an understanding of customer preferences across the three themes. Online survey Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 42

Appendix 2 43

Appendix 2 - A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 44

Appendix 2 - A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 45

Appendix 2 - A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 46

Appendix 2 - A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 47

Appendix 2 - A series of workshops were conducted amongst 26 customers The design of the workshops enabled Western Power to gain an understanding of customer preferences across the three themes. Workshop Theme 1 Theme 2 Theme 3 TOU tariff design Customer trade offs Smart meters Online survey method 48