The AER established the Consumer Challenge Panel (CCP) in July 2013 as part of our Better Regulation reforms. These reforms aimed to deliver an improved regulatory framework focused on promoting the long-term interests of consumers.
The members of the inaugural CCP were appointed from 2013-2016. Members of second iteration of the CCP are to be appointed in September 2016, for a term of three years.
The CCP assists the AER to make better regulatory determinations by providing input on issues of importance to consumers. Regulatory determinations are technical and complex processes which can make it difficult for ordinary consumers to participate. The expert members of the CCP bring consumer perspectives to the AER to better balance the range of views considered as part of our decisions.
The objective of the CCP is to:
- advise the AER on whether the network businesses’ proposals are in the long term interests of consumers; and
- advise the AER on the effectiveness of network businesses’ engagement activities with their customers and how this is reflected in the development of their proposals.
Roles of CCP members
The role of the CCP is to provide input and challenge the AER on key consumer issues during a network determination, to improve the AER’s decisions. The CCP will facilitate the consideration of the consumer perspective to achieve a balanced consideration of all views by the AER.
- the CCP is not a decision-making forum, nor is its role to negotiate or advocate on behalf of consumers or industry. Its role is to act in an advisory capacity to help inform the AER’s decisions with regards to consumer interests. The CCP provides inputs and challenge which might not come through other means
- the CCP is required to develop an understanding of business, market and industry trends, and the consumer engagement that has been undertaken in relation to proposals
- the CCP is required to understand the AER’s approach to assessing businesses’ proposal and to provide “wise counsel”, insights and ideas which can only come from a consumer perspective
- the CCP is to critically assess whether the issues identified by the AER are important when considering the long-term interests of consumers and whether the approach by the AER to these key issues is in the long-term interests of consumers
- to assist the CCP in understanding the AER’s approach CCP members will have access to AER staff
- the CCP will provide its advice through:
- presentations to the AER Board
- written statements of advice.
- The AER is not obliged to act on the views expressed by CCP members, but will give due weight and consideration to the advice provided. The AER will provide a clear rationale for their decision and will provide feedback to CCP members as to how their views have been considered and addressed.
The selection process for the next CCP program is now underway, the AER aims to have the recruitment process completed by the end of August and the appointment of the new panel in early September. The AER will then appoint individuals to the CCP for a term of three years. Individuals with consumer insight and engagement, regulatory decision-making or knowledge of energy or other utilities are being consider. Members appointed to the CCP will be paid for their services. Applications closed on the 3rd August at 2pm, we cannot consider any late applications.
The AER commissioned an independent review of its Consumer Challenge Panel (CCP), which it released publicly on 5 May 2016. 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.
To meet its objective of assisting the AER make better regulatory determinations, the Consumer Challenge Panel may provide statements and advices to the AER.
The following members were appointed to the inaugural CCP. The members had significant local and international expertise, spanning fields including economic regulation, energy networks and consumer representation.
The members are:
- Ms Jo De Silva
- Mr Hugh Grant
- Mr David Headberry
- Mr Mark Henley
- Ms Bev Hughson
- Ms Ruth Lavery
- Mr Bruce Mountain
- Mr David Prins
- Ms Robyn Robinson
For further information on each member please see the CCP1 Member Biographies:
AER's approach to the CCP
We have developed a framework to optimise the quality, timeliness and usefulness of CCP advice to the AER.
Sub-panels of 2-4 members work on each regulatory determination. Sub-panels are generally allocated a cluster of businesses that are jurisdiction based, with members allocated to these groups based on their expertise and conflicts of interest.
Members use their expertise and consumer perspectives to provide advice to the AER on the interests and concerns of consumers and whether the network proposal is in the long-term interests of consumers. This provides members with a unique opportunity to contribute to the debate on network charges that will impact consumers in the future.
Members have flexibility to work in a way that best suits them. While the AER can request advice on a particular matter, members will exercise well informed judgment in prioritising and selecting the matters and issues in each determination that have the greatest potential to influence consumer outcomes, having regard to the jurisdiction and role of the AER.
Throughout a determination, members work closely with AER staff and meet with the AER Board. This provides opportunities for members and the AER to debate issues and seek information and feedback.
CCP members meet with businesses at different stages of a review. These meetings provide members with an understanding of the business and its regulatory proposal, including outcomes for consumers.
CCP members also meet with consumer groups throughout the review process to gain an understanding of the issues that are of concern to consumers.
Conflict of Interest
Members of the CCP have been appointed because of their backgrounds and experience. In addition to their role with the CCP, members may also be active in the Australian energy industry and wider community. In performing multiple roles, conflicts of interest may arise.
A conflict of interest guideline assists members in managing this issue. CCP members must notify the AER of all potential conflicts, which are listed on a public register. In some circumstances, a conflict may result in a member removing themselves from a project.
Confidentiality and Freedom of Information
As the CCP sits within the AER, members are subject to the same confidentiality and FOI requirements as the AER. The AER has a duty to protect all confidential information provided by a third party. All CCP members sign confidentiality undertakings agreeing to treat all information provided by the AER as confidential and to only use the information for official CCP purposes.
The work of the CCP is also subject to the Freedom of Information Act. Work produced by CCP members may be released following an FOI request, unless the work falls within an exemption under the Act.
A Confidentiality and FOI guidance paper assists members in understanding their obligations in dealing with confidential information and the FOI regime.
Our approach to the CCP has been informed by the experience of regulators in Great Britain and adapted to reflect the Australian context and regulatory framework. Further information on the experience of consumer challenge in Great Britain and its potential role in Australia is available in a paper by Dr Gill Owen commissioned by the AER: The potential role of Consumer Challenge in energy network regulation in Australia.
Additional information is also available in the AER’s March 2013 National Consumer Roundtable presentation on the CCP.
For further information see the CCP charter, Better Regulation: AER's Consumer Challenge Panel fact sheet and CCP Q&As.