25 August 2021

Lights on for the CDR in the energy sector

This article was written by Kendra Fouracre and Cheng Lim

Over a year after the formal expansion of the Consumer Data Right (CDR) to the energy sector, Treasury has now released draft amendments to the CDR Rules outlining how the CDR will be operationalised in the energy sector. Most notably, these rules confirm that data access will be via a peer-to-peer data access model, rather than the originally contemplated approach of having a designated gateway.

The two key takeaways are:

  1. the CDR will be operating as a peer-to-peer data access model (rather than an AEMO gateway model). This means that energy retailers (rather than AEMO) will be responsible for interacting with energy consumers regardless of whether the requested CDR data comes from the retailer or AEMO; and
  2. all energy retailers who retail electricity to connection points in the National Electricity Market (NEM) will be required to participate within the CDR from 1 October 2022 (for members of the AGL Energy Group, Origin Energy Group and Energy Australia Group) or from 1 October 2023 (for all other energy retailers).

As the lights come on for the CDR in the energy sector – now is the time to not only have your say on the draft CDR Rules but to start ensuring that you are ready for the implementation of the CDR.

The CDR in energy – What is it and why is it important?

A cornerstone of Australia’s new data economy, the CDR is a general right created for consumers to control their data, including who can have it and who can use it.

In the energy sector, the CDR will empower electricity consumers to require energy retailers to provide datasets relating to the sale or supply of electricity in the National Electricity Market (NEM) (including where electricity is bundled with gas) to other parties who the consumer chooses to trust.

The datasets includes data held by the retailer (for example customer data, account data and billing data) and data held by the Australian Energy Market Operator (AEMO) (for example metering data, NMI standing data and Distributed Energy Resource register information). Generic product data (for which there is no consumer) will also be provided by the Australian Energy Regulator and subject to the agreement of the Victorian Government, the Victorian Department of Environment, Land, Water and Planning.

Although consumers are already able to obtain some of this data via existing processes under relevant electricity laws and government energy price comparison sites (such as Victorian Energy Compare), the CDR is designed to improve consumer choice by increasing the ability of consumers to compare and switch products, to negotiate deals with their current providers and increasing the level of control that consumers have over their data, including which third parties can have it and use it.

The Peer-to-Peer Data Access Model – A New Design for the CDR

Historically, the CDR in the energy sector was to be designed using an AEMO gateway data access model (by which AEMO would facilitate the transfer of data between data holders and data recipients). Over the course of 2021, this has now been replaced with a peer-to-peer (P2P) data access model. Capable of being turned on in other sectors if necessary, the P2P data access model:

  • authorises data holder to data holder disclosures; and
  • recognises that there may be situations where it is more practicable for consumer data requests relating to data held by one data holder to be directed to, and actioned by, a different data holder with whom the CDR consumer has a relationship.

In the energy sector, this practically means that the energy retailer at now at heart of the CDR and consumers can seek the disclosure of CDR data held by AEMO via the retailer with whom the consumer is known to and has a relationship with. At a high level, the P2P data access model in energy will involve:

    1. Energy retailers within the NEM (who are “primary data holders”) being responsible for:
      • providing online services to facilitate consumer data requests regardless of whether the requested data is held by the retailer or by AEMO (this includes the disclosure of requested data);
      • providing online consumer dashboards relating to the management of consumer consent relating to data held by the retailer and AEMO;
      • authenticating Accredited Data Recipients who will be receiving the requested data and authenticating the consumer consenting the disclosure of CDR data; and
      • receiving and managing all CDR consumer complaints for retailer and AEMO held data.
    2. AEMO (who is a “secondary data holder”) will be:
      • authorised (but not required) to provide AEMO held data to a retailer in response to a valid request for which the retailer has received the consumers consent. AEMO is not authorised to respond to requests from any CDR participant other than an energy retailer;
      • responsible for providing online services able to receive and respond to requests from energy retailers only; and
      • assisting retailers, where relevant, with consumer complaints or disputes (to the extent it relates to AEMO held data).

Notably, retailers who receive CDR data from AEMO for the purposes of the CDR cannot use AEMO’s data to enrich or expand their own data holdings. That is – a retailer may only use, or disclose, the AEMO held CDR data it receives under the CDR for the purpose of responding to a consumer data request (and must delete the data once it has responded to the request).

What do the new CDR Rules mean for electricity retailers?

In addition to confirming the scope of the P2P data access model, the draft CDR Rules confirm that:

  • energy consumers, regardless of their size, will be able to share their data under the CDR (provided that they are the customer of a retailer in relation to an arrangement with a retailer that relates to one or more connection points or child connection points for which there is a financially responsible market participant in the NEM);
  • all energy retailers who retail electricity to connection points in the NEM and hold a retailer authorisation under the National Energy Retail Law (or are a retailer within the meaning of the Electricity Industry Act 2000 (Vic)) will be required to participate in the CDR; and
  • CDR obligations for energy retailers will commence either on 1 October 2022 (for members of the AGL Energy Group, Origin Energy Group and Energy Australia Group) or on 1 October 2023 (for all other energy retailers).

Practically, this means that the vast majority of electricity consumers and energy retailers within the NEM will be required to comply with the CDR. This will include (but is not limited to):

  • preparing CDR data in the possession of the retailer (for at least the past 2 years) for disclosure under the CDR;
  • ensuring policy and technical processes are in place to comply with the new controls required by the CDR (this includes in relation to privacy, data security and regulatory compliance (ie dispute resolution and reporting)); and
  • building systems capable of meeting the requirements on retailers to provide online services and online consumer dashboards.
  • What are the next steps?

Interested parties (including energy retailers and third parties who will be seeking to receive energy data under the CDR) should consider responding to the Treasury consultation on the draft rules (and associated regulations). Submissions close on 13 September 2021.

More broadly – with 2 years (or less) to go before its all lights on for the CDR in the energy sector – both energy retailers and interested third parties should start thinking not only about how they can comply with the CDR but how they can capitalise on the resulting increase in data flows within the energy sector and interoperability between the energy sector and other sectors to whom the CDR will be rolled out (such as telecommunications).

Contact us if you want to know more about the impact of the proposed rules on your business and how to ensure compliance with the CDR.

 

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Have you checked out our new Data Hub? Data Central contains a range of resources to help our clients minimise the legal, regulatory and commercial risks this data-driven environment presents and ensure that its full value is being realised.

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