The AER established the Consumer Reference Group (CRG) for its Inflation Review 2020 and Rate of Return Instrument 2022. The group will play a critical role in representing the perspectives and interests of consumers in these important review processes.
The AER is reviewing the treatment of inflation in our regulatory framework, including the method likely to result in the best estimates of expected inflation. This review will allow us to consider possible changes to our approach. We aim to reach a final position by December 2020. If that final position recommends changes to our approach, we will implement those changes in 2021.
The Rate of Return Instrument sets out the approach by which we will estimate the rate of return, and comprises the return on debt and the return on equity, as well as the value of imputation credits. We publish a new rate of return instrument every 4 years. The next rate of return instrument is to be published in December 2022 and will bind all regulatory determinations in the subsequent 4 years. To determine the 2022 instrument we will undertake an extensive review including multiple rounds of stakeholder consultation. We expect the active phase of this review will commence in the middle of 2021.
The CRG will help the AER implement an effective consumer consultation process during the 2020 inflation review and development of the 2022 rate of return instrument.
The role of the CRG during these reviews is to:
- provide independent advice to us on our consumer engagement
- actively engage with consumers themselves and provide us with their insights.
The CRG may carry out its activities in the way it considers appropriate. This may include consultation with consumers of electricity and gas, facilitating consumer engagement and making written submissions to the AER about its positions on the regulatory treatment of inflation and/or rate of return instrument; and the processes undertaken to reach those positions.
The CRG is not a decision-making forum, nor is its role to negotiate on behalf of consumers or industry. Its role is to act in an independent advisory capacity to help inform the AER’s decisions with regards to consumer interests. The CRG provides inputs and challenge which might not come through other means.
The CRG will provide its advice through:
- presentations to the AER Board
- written statements of advice
- presentations to public forums in the review processes.
The CRG will also have the ability to influence AER positions through interaction with AER staff. The AER is not obliged to act on the views expressed by CRG members, but will give due weight and consideration to the advice provided. The AER will provide a clear rationale for its decision and will provide feedback to CRG members as to how their views have been considered and addressed.
The AER has appointed the following members to the CRG:
- Ms Beverley Hughson (CRG Chair)
- Mr Kieran Donoghue (Deputy Chair)
- Mr Allan Asher
- Ms Helen Bartley
- Dr Ron Ben-David
- Ms Joanne (Jo) De Silva
- Mr Craig Memery
- Mr Alex Oeser (resigned October 2021).
A representative from Energy Consumers Australia also sits on the CRG. The CRG members bring a wealth of experience across consumer advocacy, economics, finance and regulatory decision making. The members of the CRG are appointed from June 2020 to April 2023.
The purpose of the CRG Governance Handbook is to outline governance arrangements. It aims to provide clarity and structure for interactions between the CRG, consumers, regulated business and us.
Members of the CRG have been appointed as individuals and not as representatives of any other organisation. Further, we have measures in place to manage any potential or perceived conflicts of interest so they are able to bring an uninhibited consumer perspective to our process.
A conflict of interest guide assists members in managing this issue. CRG members must notify the AER of all potential conflicts, which are then listed on a public register. In some circumstances, a conflict may result in a member removing themselves from a project. The Conflict of Interest Register will be updated on an ongoing basis, as required.
As the CRG 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 CRG members sign confidentiality undertakings agreeing to treat all information provided by the AER as confidential and to only use the information for official CRG purposes.
The work of the CRG is also subject to the Freedom of Information Act. Work produced by CRG members may be released following an FOI request, unless the work falls within an exemption under the Act.
Confidentiality and FOI guidance assists members in understanding their obligations in dealing with confidential information and the FOI regime.
To meet its objective of assisting the AER, the Consumer Reference Group may provide statements and advice to the AER.
The CRG periodically releases a bulletin to inform stakeholders on its recently completed or upcoming work.