Progressing the CDR in the energy sector Progressing the CDR in the energy sector Progressing the CDR in the energy sector

Following the ACCC’s consultation in August 2019 on the options for a data access model for energy data, the Australian Energy Market Operator (AEMO) gateway was identified as the preferred model.

This was followed by an in-principle agreement about the priority energy datasets and data holders by the Commonwealth Treasurer in January 2020.

Since then, recent steps have included:

• consumer workshops held by the CSIRO’s Data61 (as the Data Standards Body for the CDR) to understand their views of the CDR and its functionality in the energy sector as it continues to develop the consumer data standards
• a supplementary Privacy Impact Assessment (PIA) on the designation of the CDR in the energy sector by Treasury was conducted. Its purpose was to identify the privacy risks and impacts to energy consumers from sharing and using their energy data, based on the current CDR framework and the regulation of energy data. The report and Treasury’s response to the recommendation will be released over the coming weeks
• a consultation by Treasury on the draft Consumer Data Right (Energy Sector) Designation 2020 (Cth) (DI), which closed on 31 May 2020. Notable points for consideration in the DI are: expanding the application of the CDR beyond the National Electricity Market (NEM) to include the sale or supply of natural gas, including provisions which would apply the CDR to ‘bundled’ services (which includes electricity), the concept of ‘materially enhanced information’ (what is in and what is excluded) and making energy retailers data holders of the metering dataset. Treasury intends to finalise the DI by 30 June 2020.

In the meantime, Treasury is also leading the Inquiry into Future Directions for the Consumer Data Right. On 6 March 2020, the Inquiry released an Issues Paper for consultation. Submissions closed on 21 May 2020. Key topics being considered are write access (i.e. the ability for a consumer to open an account and make changes through an accredited data recipient) and interoperability with existing information law frameworks and infrastructure. We expect these topics will be further considered and implemented into the CDR framework in future iterations of the rules and data standards.

The purpose of the CDR is to make it easier for consumers to identify products and services appropriate for their needs and requirements through the transfer and use of their data so they can make informed decisions. As the CDR is extended across the economy, one of its key features is to enable data fluidity so that consumers can switch with ease and compare products without too much effort or confusion. This will also help to standardise general product plan offerings and encourage energy retailers to consider better ways to share a household’s energy consumption with customers to help them choose appropriate products and services.

The opportunities and use cases for the CDR in the energy sector will not be fully understood by consumers and stakeholders until further clarity on the designation is provided, including the rules framework that will apply to the energy sector. However, while these developments are still a work in progress and the energy rules framework is yet to be published and consulted on, there are opportunities being explored in the energy sector.

Possible use cases in the short-term include price comparison services, tailored dashboard of accounts and services, short-term financing for solar installations or electric vehicle charging stations, bill consolidation payment services, tailored switching and recommendation services and managed account maintenance services. While sharing data will increase competition in the energy sector, it will enable energy retailers to refine their product offerings so that the value and benefits are understood better by consumers.

While the DI is still in draft and the energy rules framework is yet to be released by the ACCC, energy retailers will need to consider how they will prepare for the CDR obligations that will initially apply to them as data holders (in addition to the NEM consumer and privacy frameworks that they are subject to). The transition to accommodate the CDR will require system and process reviews, enhancements to the ways data is discovered, tagged and processed to meet CDR requirements and interface with the AEMO, and the AEMO’s requirements as the gateway for the transfer of data. Further details about the gateway system and functionality that will be used to connect data holders to accredited persons, verify consumers and authorise transfers of data will be important.

What we do know, or can reasonably expect, in relation to the CDR for the energy sector is that:

• the AEMO will act as the gateway for particular datasets and will package these either from its own sources (e.g. in relation to data from the NMI Standing Data Schedule and Distributed Energy Resource Register) or from energy retailers, and pass the datasets through to the accredited persons
• energy retailers will be data holders for certain types of metering data as well as customer, billing and tailored product data
• existing product comparison services such as Energy Made Easy and Victorian Energy Compare will be data holders for generic product data
• the sale or supply of natural gas is likely to be in scope despite the previous understanding that the energy sector was the National Electricity Market
• given the direction of the CDR, data relating to ‘bundled’ services offered by energy retailers may be captured
• certain types of data that has been ‘materially enhanced’ will be captured, although further clarity is welcomed. 

Importantly, as experienced by the banking sector, energy retailers will need to be mindful of its arrangements with third party service providers to ensure that it complies with the applicable legislative and regulatory rules both in relation to the CDR regime and outside the CDR framework.

Here is a summary of the next steps for the CDR in the energy sector:

• Treasury will publish the report for the PIA that was undertaken and provide its response
• Treasury will share the submissions received on its consultation of the DI
• The ACCC will release a draft of the energy rules framework for consultation, which may cover the design of the AEMO gateway model and consumer authentication processes
• Treasury will look to finalise the DI later this month.

Following the finalisation of the DI, we can expect further consultation on the AEMO gateway model, consultation on the ‘bundling’ arrangements identified in the DI, the development of the energy rules schedule to the Competition and Consumer (Consumer Data Right) Rules 2020 (Cth) as well as any changes to the framework rules, and further work on the consumer data standards and the CDR Privacy Safeguard Guidelines in particular in relation to participants acting as a gateway.

KPMG can assist energy sector participants with:

• understanding the implications of the CDR in the energy sector
• advising on the effect of the CDR rules and consumer data standards
• understanding the privacy obligations under the CDR regime
• drafting and negotiating agreements with technology providers
• reviewing data access, processing and governance arrangements
• developing a roadmap to CDR compliance (while maintaining compliance under the National Energy Customer Framework and the Victorian Energy Retail Code)
• developing a CDR policy and providing implementation and training material.