National Advocacy

CFA's main work in this area in recent months has been in assessing the best model for ongoing consumer advocacy in the NEM.  Consumers are of course the largest group of users in the NEM, but by and large their voice is not heard. We are particularly concerned about the needs of people on low incomes or who are vulnerable.

The groups involved in the project are listed opposite.  The first stage of this ongoing work was the commissioning of a research report into various consumer advocacy models. The research paper, funded by the Advocacy Panel, was prepared for us by the Allens Consulting Group and can be accessed here.

The research paper was considered by the Ministerial Council on Energy at its meeting on 27 August, 2004. The MCE have agreed to undertake further investigation.

In summary, the paper concluded that the best model for long-term, effective consumer advocacy in the national energy market would be the establishment of a national body, independent of government and industry. The research describes a structure that will ensure the body stays informed of consumer views, issues and impacts as they affect ordinary Australians. In summary, the research report recommends the following:

• That the roles of the proposed consumer advocacy body be policy development, research, consumer education and advocacy on behalf of small energy consumers. The Chair of the proposed new body would be appointed by the MCE. The Chair would, in turn, appoint a board. To avoid conflicts of interest, board members should represent consumer interests only;

• The advocacy body would have around five to six staff. Staff may not all be in the one location. In any event, staff/board members would be expected to link in strongly with other consumer organisations and involve them appropriately;

• Funding for the advocacy body would by way of levy – the same mechanism that will fund the AER and AEMC. To fulfil its role adequately, it is expected that at least $750,000 per annum would be required initially. Funding allocations however would be set by the MCE, and could vary depending on workloads and the degree of reform occurring; and

• There remains a clear ongoing need for resources to be available to the community for research and advocacy to be undertaken on behalf of consumers and classes of consumers, so the new body would also provide funding for other advocacy organisations – a role undertaken now by the levy-funded National Consumers Electricity Advocacy Panel (NECAP). This role would be delegated to a sub-committee of the board. Accordingly, upon establishment of the proposed advocacy body, NECAP would be disbanded.

The research also notes that the consumer advocacy institution will need to be flexible to accommodate changing priorities and changes of focus as the development of the national energy market proceeds. From our perspective, we believe that such flexibility will be vital as the regulatory responsibilities of the new regulators grow to incorporate distribution and retail issues. At this time in particular, the institution will need to have a specific focus on the needs of low income and disadvantaged consumers.