Audits

Under the National Energy Retail Law and the National Energy Retail Rules, the AER may carry out a compliance audit or require a retailer or distributor to carry out a compliance audit. Compliance audits must be carried out in accordance with the AER Compliance Procedures and Guidelines. The AER has also released a Practice Guide for Compliance Audits to supplement the information on compliance audits in the Guidelines.

Details of specific audits and results are below.

2017

Disconnections audit

Five energy retailers participated in the audit with respect to provisions around disconnections and compliance with the AER Compliance Guideline.

In conducting the audit, the auditor was required to assess the businesses compliance with the Retail Rules relating to disconnections using a ‘traffic light’ approach.

Under this approach:

  • ‘green’ indicates a level of general compliance and that all or most requirements of the obligation have been met.
  • ‘yellow’ indicates partial compliance and that some requirements of the obligation have not been met.
  • ‘red’ indicates non-compliance and that the obligation has not been met or could not be demonstrated.

Summary of audit findings

2018

Hardship audit

Four energy retailers participated in the audit with respect to protections for hardship customers. The hardship audits targeted businesses’ systems and process for managing relevant obligations and compliance with the AER Compliance Guideline.

In conducting the audits, auditors were required to assess the businesses’ compliance using a ‘traffic light’ approach.

Under this approach:

  • ‘green’ indicates a level of general compliance and that all or most requirements of the obligation have been met.
  • ‘yellow’ indicates partial compliance and that some requirements of the obligation have not been met.
  • ‘red’ indicates non-compliance and that the obligation has not been met or could not be demonstrated.

Summary of audit findings

Life support audit

Energex participated in an audit of its systems and processes for managing compliance with obligations to life support customers, including its obligations to provide notice of planned interruptions and to maintain a register of life support customers. The audit also considered compliance with the AER Compliance Guideline.

In conducting the audit, the auditor was required to assess the businesses’ compliance using a ‘traffic light’ approach.

Under this approach:

  • ‘green’ indicates a level of general compliance and that all or most requirements of the obligation have been met.
  • ‘yellow’ indicates partial compliance and that some requirements of the obligation have not been met.
  • ‘red’ indicates non-compliance and that the obligation has not been met or could not be demonstrated.

Summary of audit findings

2019

Explicit informed consent audit

Three energy retailers participated in a compliance audit in connection with their obligations under the National Energy Retail Law and Rules to obtain and record customers’ explicit informed consent to certain transactions. These include the transfer of a customer from one retailer to another, the entry by a customer into a market retail contract, and any term or condition in a market retail contract that provides for the variation of tariffs, charges or benefits to the customer under that contract.

Auditors were asked to assess the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas, and to assign an overall grading of:

  • Adequate/Effective: Minimal or no action required, with only minor and low risk findings. Improvement opportunities exist to achieve best practice in meeting the relevant obligations.
  • Partially adequate/effective: Improvement is required to some key processes and controls, and is likely to require substantial effort in order to support compliance with the relevant obligations.
  • Inadequate/Ineffective: Significant improvement is required, and may require urgent revision to or implementation of processes and controls in order to support compliance.

Summary of audit findings

2020

Life support audit

Retailers Momentum Energy, Mojo Power, Ergon Energy and distributors Endeavour Energy, Evoenergy and Essential Energy were required to conduct a compliance audit in connection with their life support obligations under the National Energy Retail Law and Rules.

The audits assessed the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas, and assigned an overall grading of:

  • Adequate/Effective: Minimal or no action required, with only minor and low risk findings. Improvement opportunities exist to achieve best practice in meeting the relevant obligations.
  • Partially adequate/effective: Improvement is required to some key processes and controls, and is likely to require substantial effort in order to support compliance with the relevant obligations.
  • Inadequate/Ineffective: Significant improvement is required, and may require urgent revision to or implementation of processes and controls in order to support compliance.

Summary of audit findings

2021

Hardship audit

AGL was required to conduct a compliance audit in connection with hardship and disconnection obligations under the National Energy Retail Law and Rules. The audit also considered compliance with the AER Compliance Procedures and Guideline (2018).

The audit assessed the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas, and assigned an overall grading of:

  • Adequate/Effective: Minimal or no action required, with only minor and low risk findings. Improvement opportunities exist to achieve best practice in meeting the relevant obligations.
  • Partially adequate/effective: Improvement is required to some key processes and controls, and is likely to require substantial effort in order to support compliance with the relevant obligations.
  • Inadequate/Ineffective: Significant improvement is required, and may require urgent revision to or implementation of processes and controls in order to support compliance.

Summary of audit findings

Performance reporting audit

Retailers EnergyAustralia, Red Energy, 1st Energy and M2 Energy were required to conduct a compliance audit in connection with performance reporting obligations under the National Energy Retail Law and Rules.

The audits assessed the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas, and assigned an overall grading of:

  • Adequate/Effective: Minimal or no action required, with only minor and low risk findings. Improvement opportunities exist to achieve best practice in meeting the relevant obligations.
  • Partially adequate/effective: Improvement is required to some key processes and controls, and is likely to require substantial effort in order to support compliance with the relevant obligations.
  • Inadequate/Ineffective: Significant improvement is required, and may require urgent revision to or implementation of processes and controls in order to support compliance.

Summary of audit findings

Hardship audit

Retailers Simply Energy, Alinta Energy, ReAmped Energy and Powershop Australia were required to conduct a compliance audit in connection with hardship and disconnection obligations under the National Energy Retail Law and Rules. The audit also considered compliance with the AER Compliance Procedures and Guideline (2018).

The audit assessed the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas, and assigned an overall grading of:

  • Adequate/Effective: Minimal or no action required, with only minor and low risk findings. Improvement opportunities exist to achieve best practice in meeting the relevant obligations.
  • Partially adequate/effective: Improvement is required to some key processes and controls, and is likely to require substantial effort in order to support compliance with the relevant obligations.
  • Inadequate/Ineffective: Significant improvement is required, and may require urgent revision to or implementation of processes and controls in order to support compliance

 Summary of audit findings

 

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