The Consumer Data Right (CDR) regime has now been formally applied to the energy sector, designed to give consumers more power over energy bill comparisons.
The CDR aims to provide consumers with greater access to their personal information, giving them the power to instruct businesses to provide safe and secure access of their data to trusted third parties.
The legislative instrument will take immediate effect, which will bring the energy sector into the CDR regime and will enable rules and technical standards to be made to govern how the right will operate in relation to energy data.
The Australian Energy Council’s Chief Executive, Sarah McNamara, said giving consumers more control over who can access their data would encourage innovation and the tailoring of products and services.
“We know that the best way to lower energy costs for households and small businesses is through competitive markets,” Ms McNamara said.
The CDR in energy builds upon the progress already made applying it to the banking sector, through what is known as Open Banking, which allows consumers to have greater access to information that banks hold on them, enabling them to shop around and get a better deal.
Applying the CDR to the energy sector will allow consumers and businesses to more easily compare and switch between electricity plans and providers, encouraging more competition, lower prices and more innovative products and services.
“Enlisting the help of third parties through the CDR will make it easier for customers to find the cheapest deals,” Ms McNamara said.
“While there is still a lot of work to be done, energy retailers will be working to ensure that this reform is implemented to benefit customers without imposing additional costs.”
The improved competition and data-driven innovation from the new system aims to help create new jobs and ultimately boost the economy.
The regime is also designed to afford better access to data for energy users to help make businesses more efficient with savings flowing through to consumers and small businesses.
Thirty per cent of electricity consumers do not switch due to the effort required, however statistics have shown that a consumer would be around $1,000 better off by switching from the worst to the best electricity plan in South Australia, and by around $750 in New South Wales.
A small business would be over $7,000 better off in South Australia and over $3,000 better off in Victoria or New South Wales from a similar switch.
“In Victoria, you can upload your consumption data and instantly find the best offer for you by logging onto the Victorian Energy Compare website,” Ms McNamara said.
“In the other states, you can log onto the Federal Government’s recently updated Energy Made Easy website. Simply by uploading a copy of your bill you can find the best deal for your circumstances.
“The AEC looks forward to continuing to work with the Government, the ACCC, and the Data Standards Body to progress this important reform.”
The CDR will help improve outcomes for Australian households and businesses, building on the Federal Government’s other important energy sector reforms, like the reference price and default market offer price cap which are improving transparency and affordability in the energy market.
The Australian Competition and Consumer Commission (ACCC) will shortly commence consultations on the proposed rules for the sector.