Denham Sadler
September 2, 2019

Attention turns to electricity CDR

Consumer Data

Attention turns to electricity CDR

Retail power: Government will introduce Consumer Data Rights to electricity sector

The federal government has ramped up its efforts to apply the Consumer Data Right to the electricity sector from next year, with new consultations opened and the overall model selected.

The Coalition’s Consumer Data Right legislation, which shifts ownership of customer data from the supplier to the customer, passed Parliament in July. It was supported by the Opposition despite a number of concerns about a rushed process, privacy and sectoral coverage.

Banking will be the first industry where the CDR is applied, with open banking set to formally launch early next year. Electricity has long been ear-marked as the next cab off the rank, and this has now been made official.

Late last week energy minister Angus Taylor opened up government consultations on what type of data should be included in the electricity data-sharing scheme, while the competition watchdog also decided that a “gateway model” would be used to share this information.

“Giving consumers more control over their data will support the development of more convenient products and services that are customised to individuals’ needs, encouraging more competition, lower prices and better switching between electricity plans and providers,” Mr Taylor said in a statement.

The central aim of the scheme is to make it easier for consumers to switch energy providers in order to get a better deal. According to the government, nearly a third of electricity consumers don’t switch providers due to the effort required, while 22 per cent don’t due to the lack of information on offer.

Consumers would be about $1000 better off if they switched from the worst energy plan to the best in New South Wales and South Australia, while a small business would be $7000 better off in South Australia and $4500 better off in Victoria with a similar switch, according to the government.

A range of agencies and departments are responsible for different elements of the CDR scheme and rollout.

Treasurer Josh Frydenberg is responsible for deciding what data will be required to be shared by electricity providers, and has now opened public consultations on this.

Mr Frydenberg has released a paper outlining how the government is approaching applying the CDR to the electricity market.

The scheme would initially apply to the National Electricity Market, which does not include Western Australia or the Northern Territory.

The types of data that the government thinks should be included under the scheme includes connection point information, account holder name and contact details, data collected by metering data providers, historical billing information, retail tariffs, usage charges and the register of distributed energy resource technology installed at a residential consumers’ premises.

Data such as non-National Electricity Market metering and connection point information, gas metering and retail product data and electricity data for embedded network consumers would not be included in the initial roll-out of the scheme but will be considered in the future, according to the government proposal.

“There are various reasons for the versioning of the implementation of the CDR in energy, most importantly that the roll-out is focused on datasets which cover the largest numbers of consumers in the sector and those that can be accessed most efficiently in the timeframes set out for the initial version of the regime,” the paper said.

Treasury is now seeking feedback on what datasets should be included in the scheme for basic energy retail product comparison and switching use cases and for more advanced use cases, like whether a consumer should install solar panels.

It is also seeking responses on what other datasets should be included.

Under the scheme, the Australian Energy Market Operator (AEMO) would act as the “pipeline” for the transfer of these datasets from the electricity suppliers to the consumers and accredited third party recipients.

The ACCC announced late last week that it had opted for this gateway model over two other options as it “best balances functionality, cost effectiveness, flexibility and security while also leveraging AEMO’s data and IT expertise”.

AEMO will have to be provided with the data it doesn’t already hold from data holders, and will then be able to issue it to the third party recipients.

This differs from the model adopted for open banking, which will employ an economy-wide model without the intermediary party.

The ACCC’s initial discussions of this debate admitted that this model brings with it a series of privacy and security concerns.

“The pooling of energy data, including personally identifiable information, at a gateway may necessitate increasing requirements for information security and resiliency. This model also raises issues with respect to service continuity and performance, as data access via a gateway introduces the risk of a single point of failure,” the ACCC said in February.

The CDR legislation which underpins both of these schemes has been criticised for being “very complex and messy” by civil and digital rights advocates.

Labor agreed to pass the legislation unamended in July after it said it had received a promise from the government that it would introduce amendments giving consumers a right to delete all data held about them in the next sitting period in September.

The Opposition admitted it had “deep concerns” about the new laws, but agreed to pass them to ensure that open banking could fully kick off early next year.

But the process behind the legislation was rushed and didn’t properly take into account the myriad concerns surrounding it, Digital Rights Watch board member Justin Warren said.

“The CDR has happened quite quickly, so we simply haven’t spent the time needed to work through the flaws to try to remove them before the legislation passed,” Mr Warren said.

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