Papers

Consumer Consultation in the Australian Energy Sector

Author

Keith Besgrove

Below is the executive summary of the October 2015 Report.

The Australian Energy Regulator’s requirement for industry to demonstrate consultation with consumers in 5-year price reviews, combined with greater emphasis on consumer consultation by other regulators including the Australian Energy Market Commission has increased demands on all consumer advocates.

Many other national and state level review processes exacerbate these demands, and no reduction in the many calls on advocates time and energy is in sight.

Consultation modes are diverse. Consumer consultative forums are important (and may be growing in use), but other mechanisms — websites, surveys, focus groups, town hall meetings, and deliberative forums — are also used by industry, policy makers, and regulators. At the moment, there seems a greater danger of too much ineffective consultation rather than too little consumer consultation.

Consumer advocates are stretched very thin, suffer resource constraints which sometimes detract from the quality of their submissions, and are compelled to make hard decisions about where to focus their energy and attention.

Consumer advocates sometimes feel that their views are ignored by regulators or overwhelmed by the sheer volume of data supplied to regulators by industry.

Regulatory processes are complex, adversarial in nature, and provide limited scope for finding common ground between industry and consumer advocates. Most stakeholders believe the regulatory processes are unnecessarily complex.

Regulators and industry say the most effective advocates possess experience, combined with in-depth knowledge of the energy market and its technologies. But these attributes are hard for under resourced consumer agencies to obtain, and capacity development opportunities for advocates are few.

There is widespread goodwill among regulators, industry and consumer advocates towards Energy Consumers Australia (ECA) combined with expectations that it will both support consumer advocates and also articulate clear strategic consumer objectives for the energy sector.

ECA can make a difference and there are some key things it could do

  • Provide advocates with expertise or access to sources of expertise
  • Conduct annual technology/regulatory fore-sighting processes
  • Establish a central information/opinion sharing site
  • Implement a capacity building program for consumer advocates
  • Develop ways to identify where consumer advocates have had an impact
  • Develop processes to achieve recognised common ground on issues between industry and consumer advocates where feasible.