Why Do Water Utilities Hesitate to Do a Level of Service Agreement

In the previous blog post titled “Involving Customers in Level of Service Conversations“, Ross and Heather explained the importance of communicating with clients or customers.

Ross answered the follow-up question, which says:

• Why do utilities hesitate to do a level of service agreement and how can we help with getting over that fear?

Ross:

Just moving on to that second question about the agreement side of it. Certainly, in the U.S. and I know in the State of Victoria in Australia, their water industries are regulated and have a government or state-appointed regulator.

And they have minimum agreements with the regulator as to what service that they provide and those agreements are then, they have to communicate those agreements with the customers.

In New Zealand, we don’t have that level of regulation in the water industry yet. And it would be fair to say that formal customer charts or customer agreements have been tried in a couple of cases but they haven’t been universally accepted.

And I think that issue is around somebody then saying, “Hey you didn’t meet this, that, or the next thing that’s in this agreement and therefore I’m not paying my bill, or my invoice or whatever it is.”

So it’s an interesting subject. The area or the places where it has worked best I think is where there’s actually been a regulatory framework that requires that.

And so the customer charter or the customer agreement is effective – that’s the law and so you’re just communicating what the law is to your customers.

And so, it is in areas that are a little bit fraught. What you’ve got to really work your way through is that you’re not exposing yourself to unnecessary litigation through an agreement.

Though sometimes with water utility infrastructure management systems and wastewater systems or even road networks or anything else – stuff happens. And you can’t deliver the service.

And so it’s about how do you manage that dynamic.

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