On 5 May 2016, the Australian Energy Regulator (AER) released an independent review of its Consumer Challenge Panel (CCP). The review found strong support for the objectives and operation of the CCP from a wide range of stakeholders. The AER welcomes the findings of the report and will be working to implement its recommendations.
The Nous Consulting group was commissioned to conduct the independent review of the CCP to consider to what extent the CCP program had achieved its objectives and to examine the efficiency and effectiveness of the program over its first three year term.
The Consumer Challenge Panel played a key role in promoting an independent consumer perspective in energy regulation. The review revealed that this role can be enhanced through process improvements which promote greater consistency, collaboration and clarity of the CCP function.
The AER broadly agrees with the report’s findings and recommendations and will refine the operation of the CCP in accordance with the recommendations. Key recommendations include:
- Introducing processes to increase collaboration and engagement between the AER and CCP. Jointly confirming issues of interest and agreeing on approaches will enhance the value of advice provided to the AER.
- Introducing a more structured and consistent approach to engagement between the CCP and network businesses and consumer groups. This should focus on providing insights of value to the AER decision making process.
- The development of a precedent library to allow the CCP to share knowledge across various topics and resets.
The Australian Energy Regulator expects to commence recruitment for the next CCP program in June 2016, with a view to having it operational for the next round of resets commencing in late 2016.
Background
The review began early February and drew on a number of sources including online surveys, workshops and interviews with our stakeholders including CCP panel members, AER staff, Regulated businesses and numerous consumer groups.
- The establishment of the CCP was a key component of the Council of Australian Governments’ energy reform agenda agreed to on 7 December 2012. It was implemented as a part of our Better Regulation reform program, which aimed to deliver an improved regulatory framework focused on the long term interests of consumers.
- The objective for establishing the CCP was to assist the AER to make better regulatory determinations by advising on issues that are important to consumers.
- The role of CCP members was broadly defined to include considering material provided to or prepared by the AER and meeting with Network service providers, consumer representatives and the AER staff and Board in order to advise the AER on:
- whether network businesses proposals are justified in terms of the service to be delivered to customers and whether they are in the long term interests of consumers
- how energy network businesses have been engaging with their own customers in developing their proposals.