As the present Parliament was drawing to a close one of the uncontrolled government entities, the Standing Council on Energy and Resources (SCER) started to implement an agreement to establish a new qango, a national energy consumer advocacy body, the Australian Energy Consumers Organisation (AECO). SCER is a regular meeting of energy ministers with a long agenda determined by bureaucrats keen to extend their empires.
Having proposed a new body, it then set about validating its sentiments that this was a good idea. Cover for the establishment of this bureaucratically pre-ordained AECO was provided by the appointment of two seasoned bureaucrats, former head energy regulator John Tamblyn and former head of the Commonwealth industry department John Ryan.
Lo and behold Tamblyn and Ryan found fresh gaps in the regulatory arena to be filled by drones and activists.
Three existing national regulatory acronymic agencies are supposed to be the consumer proxy. These include the AEMC, which is responsible for the code of rules under which electricity (and gas) is traded; the AER which determines prices for the regulated assets: and AEMO, largely an operational body responsible for managing the market. Doubtless we will see no countervailing staff reductions to compensate for the new consumer advocacy staffing and funding.
The SCER set about filling the newly discovered regulatory gaps. It scoured the world for suitably qualified people but appointed two seasoned consumerists to head up the new agency. The appointees are Fiona McLeod, the former Victorian Ombudsman, who developed the AECO proposal, and Catriona Lowe of the Consumer Action Law Centre. Both are veteran campaigners and proponents for their view of consumer interests, on whom the costs of the body eventually fall.
No doubt the newly appointed representatives will now commence a recruitment campaign to ensure they have adequate help available. Ms McLeod is a past master of this having built a behemoth Victorian Ombudsman of over 120 souls from an agency originally intended to comprise staffing that could be counted on one hand. Doubtless such empire building experience will stand her in good stead with the new position.
The new body adds to a 13 member “consumer challenge panel” announced last month so there will be no shortage of advice on how to distribute free beer ensure a strong customer voice.
The three national regulatory agencies, AEMC, AER and AEMO, had some justification in that once electricity was privatised some means of regulation was necessary for the monopoly elements of poles and wires.
But there is also a plethora of government financed bodies with acronyms like CUAC, TEC, ATA, PIAC, ACOSS, WACOSS, VCOSS TCOSS and, of course, CHOICE agitating to lower prices and purporting to represent the consumer.
Most of the government financed pseudo-consumer representative bodies put in submissions to the inquiry into the National Energy Consumer Advocacy Body, rightly seeing it as an opportunity to gain increased public funding. The irony appears to be lost on governments that they are funding NGOs to create pressures on themselves to increase such funding.
As well as the national regulatory bodies and government financed energy advocacy NGOs, most states also have their own independent government/consumer funded agencies that examine and coerce the commercial suppliers. Victoria has the Essential Services Commission which has commissioned research that purports to show that retail margins have increased in Victoria. If true this must be either a classic “market failure” since there are over 20 competing retailers, or more likely reflective of the increased costs retailers are stuck with from the plethora of regulations and regulatory bodies they are obliged to finance and liaise with. Naturally the analysis calls for further analysis to see how competition works!
Unfortunately there appears to be a lack of political will to get the regulatory monkeys off the back of the supply industry so the costs will continue to be borne and there will be decisions and regulations (a recent one that discouraged marketing activities like “door-knocking”) that gum up competition.