If there’s one thing more illuminating than the electrons delivered by energy companies – it’s the household usage data stored on their servers. Energy companies know how and when customers use energy, deliberately designing prices to make people pay more, while running processes designed to frustrate competition.
It is possible for customers to get and share their data, but the process is long-winded and off-putting. So most people give in at the thought of trying to understand and manage their energy better. In effect, the energy industry enjoys a monopoly over data, and this has allowed them to give lousy service while fending off new entrants offering brighter services. For Australia, that’s all about to change.
Twenty years ago, energy companies effectively achieved self-regulation by writing the rules they’d be regulated by. They then went on to staff the working groups that designed and implemented any changes to those rules. The result has been to protect their revenues by plugging consumers into twenty years of glacial change.
What’s sparking this desire for change is the Customer Data Right (CDR) movement extending into energy. Open energy data, regulated by the ACCC, with rules written by Treasury, will shift the data ownership from energy companies to customers. From November 2022, energy companies will be compelled to share data with customer-nominated certified third parties.
Energy companies are blowing a fuse – maintaining that the data is irrelevant to customers and that the new mandate will impose unnecessary costs. Their lobbying of Treasury to exclude certain customers and data, and to delay the process, is unsurprising – and in [my/our] view, wrong.
Energy Action believes that opening up energy data is good for customers and for competition – allowing the market to offer innovation. For individuals, energy data could connect children to their grandparents, letting them know the morning kettle boiled or the dinnertime lights turned on. For businesses, technology can aggregate energy data in one place, allowing companies to drive down their costs or find the best way to get to Net Zero emissions. The new rules compel energy companies to share data within tight timeframes – something they’ve never had to do before.
CDR is intended to make it easy for customers to access their own data so they can use it how they want. Energy companies’ concerns about sharing customer details with third parties –creating barely believable scare stories –are disconnected from the real world.
The reality is, third parties that want to access energy data will need to be ACCC accredited. They will need to demonstrate that their data defences are robust, and submit to annual audits. And they will need to clearly explain how data might be used – as consent to share is easily revocable. It’s arguable that many online energy data managers will actually become more secure, because of the security standards that have to be met.
Open energy data will drag reluctant energy companies into the internet age, requiring them to accept customer click-through consent, rather than the quaint forms they demand today.
As the regulator, the ACCC will need to become more ruthless to ensure that energy companies comply with CDR timelines. Already delayed once, energy companies are continuing to say that CDR is complicated and time consuming. Yet energy companies have been communicating for 20 years using B2B technology, so the technology infrastructure to support CDR is already in place – it just needs minor enhancements.
Energy companies are fighting to minimise losing control over what they view as their own customer data. They’re trying to exclude business customers from CDR, even though it’s businesses that will benefit the most financially.
It’s imperative that the ACCC holds its nerve in response to energy company lobbying. Open energy data will give energy techs the opportunity to build new and better businesses and push energy companies to improve their services. In both cases, the ultimate winners are the customers.
To learn more, check out this webinar for a more in-depth analysis of this concept of Open Energy Data.