The AER has commissioned periodic independent reviews to consider to what extent the Consumer Challenge Panel (CCP) program is achieving its objectives and to examine the efficiency and effectiveness of the program. The following information relates to reviews undertaken in 2016 and 2019.
2019 KPMG Review
During 2019, with the assistance of consultants (KPMG and InSync (referred to as KPMG)), we reviewed the CCP arrangements, and how the existing arrangements could be strengthened.
Overall, KPMG found that the CCP was effective and should continue. We agree with that finding and will retain the CCP. KPMG made 14 recommendations to strengthen the existing arrangements.
1. The second CCP has been effective overall
KPMG's review found that the CCP has supported the long-term interests of consumers. Stakeholders believe that the CPP has made a positive contribution to regulatory decisions, and in some situations made a substantial difference (e.g., NSW 2014–19 remittals). During the review, stakeholders reflected that CCP members worked hard and provided great value and advice. Accordingly, we have decided to retain the CCP.
2. The CCP continues to play an important role as engagement improves
KPMG stated that there is divergence in network service providers' ability to undertake robust and transparent consumer engagement and reflect consumer preferences into their proposals. Further, while most network service providers have continuously improved and included consumer engagement into their business-as-usual activities, this is not consistent across the National Energy Market (NEM). For these reasons, KPMG considered the CCP continues to hold a significant role in providing an independent assessment for the AER of the quality of the networks’ engagement processes and the extent to which proposals reflect the input from customers. The AER agrees with KPMG’s finding.
3. There is scope to prioritise the CCP to higher value work
KPMG found that the problems CCP was originally established to address have largely diminished. The value of CCP has shifted away from providing insights on consumer perspectives to fill industry gaps, instead moving towards an advisory role on the effectiveness of networks’ engagement activities.
Going forward, the AER will be more explicit in how the CCP should focus its work and the extent to which it should be involved in particular processes to ensure that regulatory proposals reflect consumer preferences. They will continue to undertake all of their existing roles. Continued involvement in lateral reviews is expected and will be formally recognised in the governance manuals.
4. There is scope to improve the governance of the next CCP
KPMG identified the need to better link the CCP’s budget to its role and improve current administrative processes.
To address this the AER will make a number of improvements to our internal governance arrangements. In particular, the Networks Committee will act as a liaison and oversee the operation of the CCP. It is a regular, centralised committee. This role will include the appointment of CCP members, prioritisation of work and allocation of budget. The Networks Committee will be supported by AER staff. The AER will release a forward work program indicating where CCP will be prioritised.
2016 Nous Group Review
In 2016 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 AER broadly agreed with the report’s findings and recommendations and will refine the operation of the CCP in accordance with the recommendations.