AER takes energy companies to task on life support

Energy companies that do not provide vulnerable people relying on life support equipment suitable notice of potentially dangerous interruptions to electricity supply are firmly in the sights of the Australian Energy Regulator (AER).

AER figures show an increase in companies allegedly failing to abide by the life support provisions in the National Energy Retail Rules, with seven infringement notices having already been paid by companies so far in the 2018/19 financial year, a situation AER chair Paula Conboy says must improve.

“Customers relying on life support equipment are particularly vulnerable and any unexpected loss of supply can have dangerous, and even fatal consequences. They are entitled to receive notice of any planned interruption to their supply.

“We have already taken enforcement action and had seven infringement notices paid so far this financial year. Companies must understand that any breach will be swiftly investigated and appropriate action taken,” said Ms Conboy.

The AER issued 14 notices to companies in 2016/17 totaling $280 000 and nine in the last financial year ($180 000).

In the most recent infringement notices handed out by the AER, TasNetworks and Energex paid $140 000 in penalties for alleged breaches of the life support obligations. Energex paid $60 000 for three alleged breaches while TasNetworks paid $80 000 over four alleged incidents.

In all matters, life support customers did not receive at least four business days’ written notice of a planned interruption to their electricity supply.

“It is imperative that these customers receive advanced notice of any planned interruption to their energy supply, so they can make alternative plans. This reduces any risk of harm occurring or more serious consequences for those customers.

In addition to the financial penalties, Energex will also be required to undertake an independent audit to ensure it has adequate systems and processes in place to manage these important protections.

TasNetworks has provided additional assurances to the AER that it will introduce new systems to eliminate potential sources of errors causing the alleged breaches as well as implementing annual refresher training for staff.

From February 2019 new rules will strengthen the protections for customers who need life support equipment. These new rules are designed to allocate responsibilities clearly and appropriately between retailers and distributors and improve the accuracy of life support registers.

“The new rules commencing are designed to strengthen these protections and we will be writing to industry about our expectations including having effective processes and suitably trained staff in place.

“As part of our audit program in 2019 we will undertake compliance audits to assess the adequacy of these systems and processes,” said Ms Conboy.

Notes to editors

Number of infringement notices per company in the 2016/17, 2017/18 and current financial years
Distributor 2016/17 2017/18 2018/19
Ausgrid 8 1 0
Endeavour Energy 1 0 0
Ergon Energy 1 0 0
Energex 4 3 3
ActewAGL/Evoenergy 0 2 0
TasNetworks 0 3 4

Background

The National Energy Retail Law (Retail Law) and Retail Rules (which apply in New South Wales, the Australia Capital Territory, Queensland, South Australia and Tasmania) set out key protections and obligations for energy customers requiring life support equipment and the retail and distribution businesses they buy their energy from.

The Retail Rules require that when a premises is registered as having life support equipment, customers are required to be given:

  • general advice that there may be a planned or unplanned interruption to the supply,
  • information to assist them prepare a plan of action in the case of an unplanned interruption,
  • an emergency telephone number for the distributor at no more than the cost of a local call, and
  • at least four business day’s written notice of any planned interruption.

To be eligible for these protections, customers must provide their energy retailer or distributor with confirmation from a registered medical practitioner that a person residing at the customer’s premises requires life support equipment.

The Retail Law permits the AER to require regulated entities to carry out compliance audits. Audits are a valuable tool in assessing the compliance systems a business uses to monitor, identify and report on potential breaches of key consumer protection provisions in the Retail Law and Retail Rules.

Energex is an electricity distributor operating in south east Queensland with almost 1.4 million domestic and business customers, including over 12 000 premises registered as having life support equipment. TasNetworks is an electricity distribution business that supplies customers in Tasmania.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future.

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We do not set the prices consumers pay.

We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.

Sector: 
Issued date: 
19 September 2018
AER reference: 
NR 27/18