The Federal Government has announced it is officially extending the Consumer Data Right to energy services, giving consumers more power to compare and switch providers to lower their energy bills.
The Consumer Data Right provides consumers with greater access to their personal information, giving them power to instruct businesses on providing safe and secure access to their data to trusted third parties.
Extending the Consumer Data Right to energy builds upon the progress already made by applying it to the banking sector, through what is known as Open Banking. Legislation on the Consumer Data Right for banking came into effect on 1 August 2019.
From February 2020, for the first time, consumers will have greater access to the information that banks hold on them and will be able to use it to shop around and get a better deal.
As the government now moves to extend the Consumer Data Right to energy, it has also released a consultation paper seeking feedback on the data sets and data access model that will apply to the energy sector.
The government also welcomed the release of the Australian Competition and Consumer Commission (ACCC) position paper on the data access model for the energy sector, following consultation conducted in early 2019.
The ACCC is proposing to use the Australian Energy Market Operator (AEMO) gateway model, which provides data on a customer’s current electricity agreement from their current retailer to a trusted third party, so long as the customer allows it.
Australian Energy Council Chief Executive, Sarah McNamara, said giving consumers more control over their data would encourage the tailoring of products and services to individual customer needs, and increase innovation.
“We know that the best way to lower energy costs for households and small businesses is through competitive markets, and this initiative will support that,” Ms McNamara said.
“The key now is to deliver what is a comprehensive reform while continuing to ensure adequate protections for consumers, at the lowest cost for industry.
“In the meantime, there has never been a better time to engage in the market. The recently introduced Reference Price makes comparison easier, the Business Energy Advice Program helps small businesses benchmark their energy costs, and the government’s independent price comparator EnergyMadeEasy are all available to save customers money today.
“We look forward to continue working with the government and the ACCC on this critical reform to help deliver competitive and lower energy bills for all consumers.”
Thirty per cent of electricity consumers do not switch due to the effort required and 22 per cent due to lack of information.
A consumer would be around $1,000 better off by switching from the worst to the best electricity plan in both New South Wales and South Australia. A small business would be over $7,000 better off in South Australia and over $4,500 better off in Victoria from a similar switch.
The Consumer Data Right for energy will initially apply to the National Electricity Market and will be expanded to other energy markets over time.