Consumer Data Right: Update for the energy sector

Introduction

With the consumer data right (CDR) for the banking sector having commenced, focus is now shifting to the energy sector. Consultation by Treasury is occurring on the energy dataset designation instrument, with submissions due by 31 May 2020.

The CDR seeks to open up access to data held by energy service providers. In turn, consumers will be empowered to make more informed choices about their energy use and seek out better deals in furtherance of enhanced competition. 

Balancing these lofty goals with complex issues of fairness, privacy concerns, intellectual property interests and the operational and technological burden, will be difficult. The devil will be in the detail of what data it applies to and how and by whom that data may be dealt with.

Preferred model

On 29 August 2019 the ACCC released its Position Paper on the data access model for energy data, identifying the “gateway model” as its preferred data access model. This is consistent with the views of a majority of stakeholders who responded during the ACCC’s consultation period. 

Under the gateway model, AEMO will facilitate the provision of data between data holders and recipients. This differs from the “centralised model” under which AEMO would be the holder of datasets, and the “economy-wide” model under which market participants would provide CDR data directly to data recipients. This differs from the banking sector which is adopting an “economy-wide model”. 

The gateway model is favoured by the ACCC due to AEMO’s existing functions in the National Energy Market as a centralised market operator, and its expertise with energy data. Another advantage of the gateway model is the ability for AEMO to assist in a staged rollout to the energy sector and play a facilitation role, particularly with respect to smaller energy retailers.

The ACCC has acknowledged the reliability, security and privacy concerns raised in relation to the gateway model, given that AEMO would pool data and create a single point of failure for the system. Nevertheless, the ACCC considers AEMO’s significant IT experience and capability will enable it to effectively mitigate those risks.

Priority datasets

Following consultation by the Treasurer, a draft designation instrument, the Consumer Data Right (Energy Sector) Designation 2020 (Designation Instrument), has been published (accessible here), setting out the data sets that should be accessible under the CDR. These are based upon the datasets that the Treasurer published as agreed priority datasets in January 2020 as follows:

The determination of the appropriate datasets is of critical importance for market participants big and small. There is a fine balance between facilitating the appropriate categorisation and flow of data (especially data that would assist new entrants and smaller players in the energy markets as well as customers) and ensuring that the data that is required to be shared does not create an unfair administrative burden on incumbents or cause them to share valuable intellectual property.

The Designation Instrument generally excludes “materially enhanced information” from information that must be produced by a retailer subject to the CDR where “the information was wholly or partly derived through the application of insight or analysis to information.” and this rendered the information “significantly more valuable than the source material".

Next steps

Whilst the timing of the ultimate introduction of the CDR for energy is not yet known, progress continues to be made. Treasury is now seeking views on the Designation Instrument which is in draft form. Interested parties can make submissions until 31 May 2020. It has been foreshadowed by Treasury that the Designation Instrument will be finalised by 30 June 2020.

Industry participants that deal with the above datasets should begin considering their ability to incorporate compliance with the proposed “gateway model” into their existing data retention policies and IT systems. 

We will separately be providing further updates, including in respect of technology and privacy issues, arising under the new frameworks.