Energy Minister Simon Watts has talked up the prospect of having the services available as early as September. (File photo) Photo: RNZ/Mark Papalii
The government says bringing in Open Electricity could save you $360 a year through improved competition.
Energy Minister Simon Watts was talking up the prospect of having the services available in New Zealand as early as September.
Watts said the framework was put in place as part of the government's Customer and Product Data Act passed last March, with Open Electricity designated by the government as the next suite of regulations after introducing Open Banking in December.
It was already in place in Australia and the UK, and would enable consumers' electricity usage data to be shared with third parties - including competing electricity retailers - to allow them to recommend better power price deals.
"Energy companies hold a huge amount of data about people's usage... when used to be able to compare within some of these third party apps, can identify some pretty significant savings of people being able to move to a more appropriate plan than what they're on.
"Our estimates are that the average household who looks at moving to the most the plan that's most suited to them could be looking at savings in the region of $360 a year. So it's not insignificant."
The law would require a power company to share the data, if their customer requested it.
Competing power companies and other third-party organisations would then be able to use the data to provide recommendations on the best energy plan based on the customer's individual requirements.
Watts said with nearly 15,000 plans available around New Zealand, "it's basically pretty much impossible for someone to be able to do that themselves".
"You're not restricted on who you can share your data with, you know, if you choose to do so, and... multiple different apps to find out what the best plan is. And that's up to you. It's your data.
"The challenge is that the data has to be in a standardised format, it has to have all the correct aspects, and the energy companies need to release that data and do so in a timely manner. And all of those things are not standardised at the moment, and that's what we bring in to enable those changes."
Consumer Affairs Minister Scott Simpson said it would mostly be financial tech companies - fintechs - offering the services to find the electricity pricing options available, although power companies may look to use it too.
"Historically, entities that have been providing services to New Zealanders - like banks, like electricity companies - they've held that data really tightly and they do that for their own commercially advantageous reasons. Can't blame them for that," he said.
"This new legislation and the regulations that we create for each sector just opens that up to trusted, accredited third party providers to give New Zealand consumers more accurate information."
He said New Zealand was late to the game in terms of open customer data, but "hopefully we're not going to make the same mistakes that some other jurisdictions have".
He was confident open electricity would not face the same delays open banking had.
"Ultimately, it's a question for the nimbleness and quickness and speed of the FinTech companies, but they are really motivated, very keen, and we've already had a lot of positive feedback from a number of players."
While fintechs operating open banking services could also offer open electricity services, he said the sectors were "quite distinctly different".
Competing power companies could also get involved.
Watts said he changes would be made via regulations by the middle of the year, he said, and energy companies would then have 12 months to be fully compliant.
But while mid-2027 was when the regime would be fully in place, he said services allowing the sharing and comparison of the data could be available as early as September, and definitely from early next year.
Watts said the legislation included privacy protections with "really stringent requirements" requiring the companies to comply with the Privacy Act.
However, once a customer had signed off on having their data shared, it would be up to those companies receiving the data how they used it.
With concerns raised over the Privacy Act's protections in light of the recent Manage My Health data breach, some may prefer to keep their data to themselves.
Simpson said the select committee examining the Customer and Product Data legislation had extensively looked into the adequacy of privacy protections.
However, the government would be open to looking at further changes if needed.
"The select committee reported back that in fact the legislation as it exists is adequate for purpose. But look, we always keep an eye on these things.
"New Zealand has quite sophisticated and good privacy legislation and at this stage I'm relaxed about how that's going to work for open banking and open electricity, but if it needs changing at some point in the future well then we'll certainly be open to that if it was needed."
Watts was confident only the data customers were authorising or approving for release would be shared.
Other usages could extend to having the data fed into AI systems or used for research, he said.
"What third party providers look to do in terms of building into their technology is going to be with them," Watts said.
"No doubt, their use of AI is already being used by a number of third party app providers in regards to supporting decision making.
"At the end of the day, we're removing a bottleneck that's stopping New Zealand consumers from being able to get in and access these type of services really easily. We want to make it easy for Kiwis to get on the best plan possible.
"Some of the broader options may be to see and provide some summary advice around the broader industry, but this is really focused about individual consumers giving permission for their data to be used so they they can get advice."
The government expected it could benefit nearly 2 million households and 165,000 small businesses, he said.
Simpson said he was open to suggestions on what other sectors could benefit from open data access, including the likes of transport and insurance.
"The legislation provides the framework, and then each different sector of our economy, and banking and electricity are only the first two ... we haven't made any decisions yet on further areas but I'm open to bids on them ... very keen to hear."
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