The Productivity Commission’s final report on Data Availability and Use (Final Report) was released last week.
As we noted previously, with the emergence of a New Energy Future in Australia the Government must find a way to regulate the accessibility and use of energy market data in a way that balances consent, risk and liability. This is particularly important given the national rollout of smart meters, which is expected to commence from the end of this year and the uncertainty surrounding the accessibility and use of the data they will generate. As outlined in the Commission’s Final Report, parties offering new data-related services are putting pressure on businesses to make data from smart meters more readily accessible.
We have seen some improvements in data access in the energy sector – for example, the Australian Energy Market Commission’s 2014 changes to the National Electricity Rules, which make it easier for customers to obtain their consumption data from distributors and to authorise third party access to that data. Nonetheless, the Commission’s observation that “there is no general regulatory or policy presumption in favour of information-sharing with individuals or for an individual to generate direct benefits from their data” is notable. The Commission’s response to is to recommend that Australia adopt a risk-based, scalable approach to data sharing and release.
Implications for the energy sector
The Final Report recommends that a new Commonwealth Act be created to regulate digital data – the Data Sharing and Release Act (DSR Act). The DSR Act would sit alongside the Privacy Act 1988 (Cth), which already regulates the sharing of personal information. The DSR Act, if enacted, would establish the following:
A “Comprehensive Right” for consumers
The Commission recommends the creation of a new, “Comprehensive Right” for consumers to access and use their data. This includes a legislative right for consumers to:
- access their consumer data (in machine-readable form)
- request edits or corrections to their data (for reasons of accuracy)
- be informed of the transfer of their data to third parties and
- direct energy providers to provide a copy of data "about" the consumer to third parties.
These rights would apply in respect of individuals and small and medium-sized enterprises (SMEs).
The Comprehensive Right detailed in the Final Report does, however, differ somewhat from the right proposed in the Draft Report. For example, individuals no longer have the right to request that a data holder stop collecting information on them. The Commission was of the view that such opt-out rights could not be able to be applied comprehensively (or consistently) across all sectors and amongst all data holders – the practical difficulties associated with this proposal was deemed to outweigh any potential benefits to consumers.
Another revised recommendation in the Final Report is that all holders of consumer data (such as energy providers) will be required to publish a list of parties to whom consumer data has been disclosed over the past 12 months, instead of being required to disclosure each instance of data sharing with third parties. This should alleviate concerns raised by energy providers, who argued that in today’s business environment, energy providers often contract out a range of functions such as those related to billing, metering, marketing and call centres, making this obligation overly onerous.
The Commission recommends that the energy industry set sector-specific standards for data sharing and refine the broad default definition for ‘consumer data’ prescribed by the legislation, so as to make them relevant to industry. However, the ACCC will have oversight of any industry-agreed standards or arrangements. In their submission on the Draft Report, AGL indicated support for this approach and suggested that APIs may be the appropriate solution for the provision of consumer data in the energy industry.
The energy industry would also be charged with addressing issues of consent, liability and risk around data sharing, such as security and privacy concerns with the provision of real time electricity usage data (which could, for example, be used to identify the times when consumers are not at home). The Final Report indicates that in the absence of industry agreement, the default Government definition and arrangements would be applicable.
This approach addresses preliminary concerns from key industry stakeholders (such as AGL Energy, Origin Energy and Energy Consumers Australia) that the Commission’s Draft Report purported to apply a blanket regime across industry sectors, which would be impractical and result in unnecessary, costly upgrades to existing systems. Notably, the Final Report recommends that entities be given the power to charge consumers for expenses reasonably incurred when complying with requests for access to, or sharing of, data.
National Interest Datasets
The Final Report recommends that the Australian Government establish a process whereby public (and in some exceptional cases, private) datasets are nominated and designated as National Interest Datasets (NIDs).
Datasets designated as a NID would be maintained by the Commonwealth as national assets and linked, shared and released where it is determined to be in the public interest to do so. This regime will be overseen by a new statutory office holder – the National Data Custodian (NDC).
Under this scheme, NIDs that include data on individuals would only be available to ‘trusted users’ that are accredited by the relevant Accredited Release Authority. The accreditation process is designed to ensure that ‘trusted users’ have in place governance structures and processes to, among other things, minimise the risk of inappropriate use and release of information. The Commission envisages that government agencies, universities, corporations and not-for-profit organisations could be accredited (by the NDC) under this process.
The Commission stipulates that data from private sectors should only be included in a NID if the Minister determinates that inclusion of that data will be likely to generate significant additional community-wide benefits – beyond those obtained by the original data holder. The Commission has acknowledged that private sector may need to be acquired to facilitate this process.
It is unlikely that the application of a public interest test in respect of designation of NIDs will alleviate concerns raised by energy regulators in their submissions, particularly with regard to proprietary data with significant value or data concerning commercial business models.
As we previously reported, the Commission’s recommendations signal a step in the right direction for balancing the needs of business and individuals, particularly as Australia transitions towards a New Energy Future. The proposals, if accepted, may go some way to facilitating investment and support for the availability of more dynamic, accessible and user-friendly data.
The Commission recommends that the DSR Act be introduced and in effect by the end of 2018 – this is an ambitious timeline for reform. Given it’s far reaching recommendations, the Commission’s Final Report is essential reading for all businesses in the energy sector, from energy providers to consumers to tech innovators.