AGL pays $40 000 in penalties regarding disconnection of customers in hardship or on payment plans

AGL South Australia Pty Limited and AGL Sales Pty Limited (together AGL) have each paid a penalty of $20 000 following the issuing of two infringement notices by the Australian Energy Regulator in relation to incidents in which nine hardship customers or customers on payment plans were disconnected from their electricity supply. 

The National Energy Retail Law (the Retail Law) and the National Energy Retail Rules (the Retail Rules) expressly prohibit retailers disconnecting customers in certain circumstances, including when they are participating in a hardship program and adhering to payment plans.

“These incidents involved customers in financial difficulty and on payment plans, and they should not have been disconnected,” AER Chair Paula Conboy said.

“Under the Retail Law, retailers cannot disconnect hardship customers or retail customers who are adhering to a payment plan, and must follow a number of steps before they can disconnect a service in other circumstances. Energy retailers that disconnect customers without complying with these requirements face action from the AER. The AER will continue to monitor compliance in this area and take enforcement action where appropriate,” Ms Conboy said.

“Customers who are worried about being unable to pay their energy bill on time should call their retailer as soon as possible to discuss the situation. Retailers must offer assistance. Consumers are advised to ask about an extension, a payment arrangement or the retailer’s hardship program. They should also check if they are receiving any concessions they may be eligible for, and ask if the retailer can offer a cheaper deal,” Ms Conboy said.

AGL reported these incidents to the AER pursuant to its reporting obligations under the Retail Law and Retail Rules.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Retail Rules.  The AER can issue an infringement notice where it has reason to believe a business has contravened a civil penalty provision of the Retail Law or the Retail Rules.

Background

AGL South Australia Pty Limited and AGL Sales Pty Limited are electricity and gas retail businesses that supply customers in South Australia and New South Wales, respectively.

The Retail Law and the Retail Rules (which apply in New South Wales, the Australian Capital Territory, Tasmania and South Australia) sets out key protections and obligations for energy customers and the retail and distribution businesses they buy their energy from. The AER monitors and enforces compliance with the Retail Law and the Retail Rules.

Disconnections can only occur after the non-payment of a bill, the issuing of a disconnection warning notice, and an attempt by the retailer to contact the customer. Disconnections cannot occur on a business day before 8.00 am or after 3.00 pm, between Friday and Sunday, the day before a public holiday, on a public holiday, or on the days between 20 December and 31 December.

Customers experiencing financial difficulties have a range of additional protections.  Under the Retail Rules, if a customer is on a retailer’s hardship program or is a residential customer and is adhering to a payment plan, they cannot be disconnected by a retailer.

Customers who have a complaint about their service should first contact their retailer. If this doesn’t resolve the problem customers should contact the energy ombudsman in their state or territory who can assist with resolving the complaint.

This action is part of a broader compliance strategy for energy disconnections and follows the recent issue by the AER of compliance checks. Compliance checks are periodically released by the AER for the broader industry to highlight the relevant obligations and to emphasise the importance of effective compliance processes and systems.

Sector: 
Issued date: 
11 May 2015
AER reference: 
NR 010/15
Contact: 
AER Media inquiries 1300 138 917