Independent review supports AER establishing next Consumer Challenge Panel

The AER has released an independent review of its Consumer Challenge Panel (CCP), which found that CCP was effective and should continue with some improvements. The AER will retain the CCP, and implement some key changes to strengthen the group’s operation.

Given changes to the external environment, it was necessary to assess the continuing role of the CCP, identify key strengths in the current approach and opportunities to improve the CCP program.

The AER commissioned KPMG and InSync (referred to as KPMG) to conduct a review of the CCP arrangements, and how the existing arrangements could be strengthened.

Following engagement with stakeholders and AER consultation, KPMG made 14 recommendations.

We broadly agree with the report’s findings and recommendations. KPMG recommended changes to strengthen the operation of the CCP for the next iteration. The key changes that the AER will adopt include:

  • Revised CCP objective to provider greater clarity concerning purpose and to optimise the CCP budget;
  • More specification on the scope, activities and outcomes of the CCP, particularly in the pre-lodgement phase;
  • Update of existing consumer engagement guidelines
  • Improvements to the governance arrangements, in particular oversight of the CCP by the Networks Committee;
  • Increased remuneration for CCP members from $200/hr to $230/hr;
  • Increased focus on consumer engagement skills in the recruitment of the next CCP.

Background

The Consumer Challenge Panel (CCP) supports the Australian Energy Regulator's (AER) regulatory decision-making process. It does this by advising if consumer insights and perspectives have been incorporated through different stages of network service providers' regulatory determinations.

We established the CCP in 2013, with two iterations of it (first CCP 2013 - 2016 and second iteration 2016 - 2020). Since the first CCP, there have been numerous developments within the AER and across the energy sector (e.g. the establishment of Energy Consumers Australia and increasing prevalence of distributed energy resources (DER)). Additionally, most network service providers continuously improve their engagement with consumers.

KPMG engaged in extensive stakeholder communication with industry, consumers, AER staff and Board and current CCP members between August and October 2019. This included workshops, one on one meetings and a survey. In addition, KPMG carried out comparisons of other international examples of challenge groups, such as in the UK and in other industries, to inform other potential models of the CCP.

Third iteration of the CCP

Due to COVID-19 impacting the ability to recruit the next iteration of the CCP, the AER has decided to postpone commencing recruitment until later in 2020. In the interim period, current CCP member contracts have been extended to ensure a consumer perspective is incorporated into existing work.

Issued date: 
28 July 2020
AER reference: 
AC 111/20
Contact: 
AER General inquiries AERInquiry@aer.gov.au