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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-09-28 Daily Xml
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Bills

National Electricity Law (South Australia) (Consumer Data Right) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 7 September 2022.)

Ms HOOD (Adelaide) (16:05): I rise to speak in support of the National Electricity Law (South Australia) (Consumer Data Right) Amendment Bill 2022.

Back in 1597, English philosopher and statesman Francis Bacon coined the phrase 'knowledge is power'. What was true then is even more so today in our era, when knowledge about us as individuals has reached unprecedented levels.

An investigation by the Australian Productivity Commission in 2017 found that the creation of data was growing exponentially. It estimated that as much data was being created every two days as had been created over an entire year around the turn of the century. Undeniably, that pace of growth has accelerated in the years since the Productivity Commission's report, and more and more of the data is about us individually: our habits and behaviours, our preferences and our spending.

The commission said that 68 per cent of Australian internet users had some form of social media account and that 84 per cent were enrolled in at least one business loyalty program. Despite this clear willingness to participate in the online environment, there was growing concern by consumers about the privacy and use of their data, with three-quarters of people surveyed for the Office of the Australian Information Commissioner expressing their growing disquiet.

The Productivity Commission report was a foundation in the development of the bill before the house today. At its heart, this bill seeks to give consumers more control over the data about themselves, which has been gathered by businesses and authorities, including the Australian Energy Market Operator (AEMO). It will allow consumers to authorise sharing and use of that data by accredited businesses to deliver more benefits to combat cost-of-living pressures, reduce their personal carbon footprint, enhance their comfort or pursue whatever agenda the consumer chooses.

The Productivity Commission summarises benefits from structured access to data rights, saying:

it will facilitate access by consumers to products and services which are better tailored to their particular needs or circumstances;

it will allow access to new products and services; and

it has the potential to reduce everyday costs.

It will improve competition between businesses and foster innovation by:

lowering barriers to entry for new market participants who would otherwise not have access to databanks held by bigger institutions;

promoting linked services in interoperability of technologies; and

addressing the market failure of asymmetric information.

It would also potentially enhance social licence by creating a system with greater levels of accountability and trust.

That final point should be of great interest to the house. For society to function successfully, it is essential that the public has trust in the institutions that are the building blocks of our shared community. In recent decades, that trust has waned. Global communications firm Edelman is among professional organisations that track trust in institutions, including publishing a Trust Barometer for Australia.

During the height of the COVID-19 pandemic, trust in governments actually rose as the public realised authorities were acting to preserve lives, in particular in regard to vaccinations. However, now that the majority the population is vaccinated and the pandemic is less front of mind, trust in governments, business, media and NGOs has fallen again, according to the Edelman barometer.

Looking at individual industry sectors, health care has the highest level of trust, at 74 per cent, according to Edelman. That is not surprising given the extraordinary dedication and sacrifice of our nurses, doctors and allied health professionals, particularly over the last few years. The energy sector, in contrast, ranks poorly, with just 51 per cent of people surveyed saying they trust energy companies. That finding is consistent with surveys conducted by Energy Consumers Australia, the independent company that was established to promote the interests of consumers.

Energy Consumers Australia regularly conducts surveys to gauge sentiment about the sector. In its most recent survey, published in June this year, it found that just 44 per cent of consumers believed the energy market was working in their long-term interests. Some 20 per cent gave a negative rating, implying that many people thought the market was actively working against their interests.

The Consumer Data Right bill we have before us today is one of the measures that needs to be taken to help address that situation. It will put greater power back into the hands of consumers so they can opt in to get better deals, products and services they want and partnerships with companies whose goals they support. This government supports consumers and it supports consumer choice.

Along with this bill, the government is pursuing reforms to increase transparency in the energy market and put downward pressure on prices. Now that the Labor Party has also been elected federally, a decade of denial and confusion over energy with no coherent policy has ended. Now the commonwealth is working with states to fix the mess made by the Liberal Party, a mess that left consumers feeling abandoned and vulnerable.

Under the Labor Party, South Australia is again taking the leadership role in developing an energy system that is fit for the future. This government supports reforms that will pave the way for consumers to enjoy reliable, affordable and cleaner energy. I commend the bill to the house.

Mr PATTERSON (Morphett) (16:11): I also take the opportunity to speak today in parliament about the National Electricity Law (South Australia) (Consumer Data Right) Amendment Bill 2022 and indicate that I am the lead speaker for the opposition. The Consumer Data Right is an initiative of the commonwealth government. Its purpose is to provide consumers with greater choice and control over their personal data that may be held by a business. It enables a consumer to transfer their data between businesses so that they can find products and services that are tailored to their specific needs, which saves them not only time but potentially money as well.

It was envisaged that the Consumer Data Right would help consumers monitor things such as their finances, utilities (in particular, energy) and also telecommunications, amongst other services. This will allow them to be able to compare and switch between various products and services in each of those sectors. The commonwealth government has already implemented the Consumer Data Right in the banking and finance sector and has now committed to extending it to the energy sector. If I talk a little about some examples in the banking sector, it can give people a better understanding of what the potentials are and apply it to data that is held in an energy perspective for customers as well.

In terms of banking, one use is to allow customers to manage all their finances in the one spot. If they have different credit cards from different banks, they will be able to look at them all in the one spot. The customer can allow access to their data via this Consumer Data Right to potentially a consolidator of this information. It could be a software provider who then allows a software service to then list all those credit cards, and they will know when payment is due for each. Hence, it will make life easier and potentially cut down on interest payments and late payments.

Other examples are in terms of finding the best services that each different bank can offer for that personal service for that personal customer, rather than just having a blanket description. An example of this is in securing loans. Customers can allow access to their credit history. Similarly, in energy, sometimes a credit history is required for setting up electricity or gas accounts. They can then allow this through the Consumer Data Right to create personalised loan comparison reports. There are examples then to find out what the best loan is specifically for that customer. So you can see that it definitely saves time and potentially, by allowing for the best decision to be made by a loan customer, it can save money as well.

Another aspect that is envisaged in this Consumer Data Right is that after that consent and data sharing process is complete, consumers can use the accredited data recipient's website, or app in the case of these softwares, to delete the data once it is no longer required. That is certainly very important in terms of security of data. We do not want data being held where it is no longer required. We have seen instances very recently in regard to big telco companies around what happens when customers' data is breached, so the less data that is stored when it is no longer needed is certainly an optimal result.

You can see those sorts of applications can certainly be applied also in the energy domain, and that was the intent of the energy ministers and the commonwealth government in terms of now moving this Consumer Data Right through into the energy sector. But for this to be successful, the framework will need to be created that will assist customers with the ability to share their personal energy data between energy retailers.

Again, as I have mentioned, the intention over time is to encourage more competition between energy retailers, knowing that it is very easy for their customers to compare and, so that customers do not get lost in different plans between energy retailers, that will then drive them to deliver more innovative and attractive retail products and strategies and to encourage new innovative products, rather than just what is already available, and look to service the customers in a better way.

Another advantage of this Consumer Data Right is using personal energy metering data, as it allows customers to make much more considered personal energy investments as well. What potentially is the optimal size of solar panels for each household, basing it on energy usage that customer has? Similarly, should a home battery be added at the same time as solar panels or, if you already have solar panels, is it advantageous to get a home battery? If so, what would that capacity be? Again, by sharing this customer data, that work can be done by sophisticated software programs as opposed to being done by the consumer themselves. This could even apply to electric vehicles where consideration could be made around what impact it would have on their energy bill for the different capacity EVs as well.

There are definitely advantages to doing this and that is why this has been progressed, moving from the banking sector now towards the energy sector. As I said, the commonwealth initiated this some time ago, going back to 2017. They announced their intention to create a Consumer Data Right regime in Australia and in the banking sector and now the energy sector; eventually in telecommunications. This was in response to a number of commonwealth government reviews that recommended the development of rights for consumers to better access and transfer their personal information in a usable format.

As you can see, each data holder would have customers' data in a different format. So to make it easy to use, if there is a consistent format, it certainly makes it easier for the customer to obtain it, understand it and then also pass that on to a trusted third party.

In regard to energy, in 2018 the commonwealth government announced their intention to include the energy sector within the Consumer Data Right regime and, alongside that, in 2019 the commonwealth government implemented the Consumer Data Right through amendments to the commonwealth Competition and Consumer Act 2010. The act itself covers most areas of the market, including relationships between suppliers, wholesalers, retailers and consumers.

The purpose of the Competition and Consumer Act is to enhance the welfare of Australians by promoting fair trading and competition through the provision of consumer protections. That is why that act was amended to allow for the Consumer Data Right. Under that act, the commonwealth Treasurer is provided with the power to designate various sectors and datasets under the Consumer Data Right, hence the investigation now into energy. As I said, in 2019, the energy ministers came together and looked at the priority issues in terms of the energy sector and saw this as an opportunity to assist consumers to also reduce their electricity bills.

As a result, the energy ministers directed commonwealth senior energy officials to develop amendments to the existing energy legislation that will facilitate the Consumer Data Right for energy. Moving on to 2020, the commonwealth Treasurer then made the energy sector designation instrument that specified what datasets and energy data holders will have the Consumer Data Right applying.

At the same time, consultation was started such that by 2021 consultation had been done on this Consumer Data Right for energy. It concluded in 2021. A lot of this consultation, as it moved between 2018 through to 2021, was undertaken during the previous term of the former Liberal government and the former minister for energy and mining was intricately involved in that.

Finally, in November 2021 the commonwealth government implemented the Consumer Data Right for energy through amendments to the Consumer Data Right rules that are made under the commonwealth Competition and Consumer Act. That is from a commonwealth perspective. These amendments included creating and implementing a peer to peer data-sharing model for the energy sector.

Whilst these amendments were made to the commonwealth act, changes are still required to the National Electricity Law and also the National Electricity Rules to reflect these amendments as well. Energy ministers have agreed on these amendments to the framework. As South Australia is the lead legislator for the national energy laws, we now see these changes coming to parliament here for consumer data rights.

As I have said before in this house, and as the energy minister has also made mention of previously, the convention for such changes to national energy laws is that the legislative amendments are supported by both sides, and so I indicate that the opposition will be supporting this bill as we go forward. As I said previously, to get to this point a lot of the consultation and input was from the former energy minister before it finally arrived here. That is a fair indication that we will be supporting the bill for that reason as well.

I will speak a little bit about what the amendment bill does. It is part of a suite of changes, as I said, initiated by the commonwealth government, aimed at ensuring that consumers will have the requisite access to their personal energy information so that they can easily compare products and services, which will, of course, maximise the benefit that they can receive from the energy market and help reduce costs as well.

The bill will also allow consumers to opt to have their personal energy information provided to a trusted third party or an accredited data recipient, which has to be designated by the Australian Competition and Consumer Commission, to then undertake that comparison for them and ensure that it is done in a safe and secure manner.

What that means is that the data is not just provided. A company cannot just set themselves up and say, 'I'm ready to receive your energy data. Please provide it.' They have to be accredited to make sure they are doing it in such a way that is safe and can be trusted, which then provides a safeguard for consumers so that they are not caught out by malicious actors as well.

Some of the Consumer Data Right for energy data include generic and tailored tariff data; distributed energy resource register data, which includes details on batteries and solar panel installations, which I mentioned previously; billing data; customer-provided data; and also metering data. As I mentioned earlier, a peer to peer model is to be set up where the consumer can direct a data holder to provide their consumer data to an accredited data recipient in a format that is compliant with the rules. It is important to say that the rules state what that data format is and that will marry up with what is in the commonwealth act.

If a consumer has provided an accredited data recipient with their personal energy information, the accredited data recipient will use it only for the purpose that the consumer has requested. Again, that speaks to the fact that they have to be accredited as a third party and trusted and not misuse that.

One of the ways these trusted third parties can use this data is tariff comparison, again to show what the most competitive rate is. That does not necessarily have to be another retailer. A third party could be a software provider that collates all these and compares different retail offers. The data can also be used for energy efficiency audits, the sizing of solar panels on roofs and battery storage.

The commonwealth government has mandated that the Australian Competition and Consumer Commission (ACCC) will lead the public education, rule making and enforcement of consumer data rights. That is the enforcement body to make sure that the energy rules that are set in place are being complied with. As stated previously, these changes have to be made to the National Electricity Law and National Electricity Rules.

One of the changes made that has to be legislated in this particular act relates to the Australian Energy Market Operator (AEMO) because they will have further responsibilities as a data holder under the Consumer Data Right for energy, which will include constructing and maintaining the relevant Consumer Data Right application programming interfaces. That basically enables the sharing of data in a uniform format and some interoperability between data holders and trusted third-party providers. This will allow energy retailers to request and receive data and ensure that the relevant record-keeping obligations are followed.

These responsibilities that have been given to AEMO are a significant expansion of AEMO's role in terms of data provision and have been set up in the amendment of section 49. Consumer Data Right functions of a data holder relating to the energy sector will be added to the list of AEMO's statutory functions. Enshrining these functions within AEMO's statutory functions also enables the Energy Market Operator to recover the costs of performing these functions through participant fees as part of its normal cost recovery functions.

As to additional changes to this amendment bill, as with previous changes to the National Electricity Law, with South Australia being the lead jurisdiction, it enables the South Australian energy minister to use the minister-initiated rules power to make the initial amendments to the National Electricity Rules, which was common practice previously. Again, this ensures consistency between the Consumer Data Right rules and the National Electricity Rules from the start of the introduction of this bill and for any future rules that are made.

The Australian Energy Market Commission, as the rule maker under the national energy rules, will have the power to amend the National Electricity Rules further for any future changes that are contemplated. As I said at the outset, the intention of these changes is to provide consumers with more control over their energy data, which enables them to access and share data with accredited third parties, fundamentally to access better deals for energy products and services as a result. The opposition will be supporting this amendment bill.

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