Energy retailers' customer hardship policies

Under the Retail Law, authorised retailers must develop, maintain and implement customer hardship policies for their residential customers. The purpose of a retailer’s customer hardship policy is prescribed in the Retail Law—to identify customers experiencing payment difficulties due to hardship and to assist those customers to better manage their energy bills on an ongoing basis.

AER approval of retailers' customer hardship policies

One of the AER's roles is to approve retailers' customer hardship policies. In order for a retailer's customer hardship policy to be approved, the AER must be satisfied that the policy contains the following minimum requirements, as specified in the Retail Law:

  • processes to identify customers experiencing payment difficulties due to hardship, including identification by the retailer and self-identification by the customer
  • processes for the early response by the retailer to customers in hardship
  • flexible payment options (including payment plans and Centrepay) for the payment of energy bills by hardship customers
  • processes to identify, and to notify customers of, appropriate government concession programs and appropriate financial counselling services
  • an outline of programs that the retailer may use to assist hardship customers
  • processes to review the appropriateness of a hardship customer's market retail contract against the retailer's hardship policy
  • processes or programs to assist customers with strategies to improve their energy efficiency, where relevant

The AER must also be satisfied that the retailer's customer hardship policy will, or is likely to, contribute to achieving the purpose of a customer hardship policy.

Further, the Retail Law requires the AER, when considering whether to approve a retailer’s customer hardship policy (or variation), to have regard to the following principles, that:

  • the supply of energy is an essential service for residential customers
  • retailers should assist hardship customers by means of programs and strategies to avoid disconnection solely due to an inability to pay energy bills
  • disconnection of premises of a hardship customer due to inability to pay energy bills should be a last resort option, and
  • residential customers should have equitable access to hardship policies, and that those policies should be transparent and applied consistently.

Guidance on AER approval of customer hardship policies

Guidance is available for retailers on the information they could include in their customer hardship policy to ensure their policies fully satisfy the requirements in the Retail Law and Rules.

The Guidance provides information on the process retailers should follow when submitting customer hardship policies (or variations to policies) to the AER for approval. It outlines the general approach the AER will take to review, assess and approve customer hardship policies. It also provides guidance to retailers on the kind of factors and information the AER will consider, having regard to the principles set out in the Retail Law, when reviewing customer hardship policies for approval.

Retailers' customer hardship policies

Under the Retail Law, energy retailers must publish their customer hardship policies on their websites. Many retailers also choose to publish a shorter, more accessible ‘consumer friendly’ document that summarises the key features of their hardship policies.

In addition to providing information about their hardship policies on customer energy bills and through customer service centres, the AER has encouraged retailers to promote their hardship policies to such organisations as community and welfare organisations. By taking steps to promote and publicise their hardship policies and make them accessible to customers, retailers are ensuring their policies are transparent, equitable and consistently applied.

AER approved energy retailer customer hardship policies

Ongoing monitoring of retailers' customer hardship policies

In addition to approving hardship policies, the AER has an ongoing role in monitoring retailers' performance in implementing their customer hardship policies and ensuring compliance with the legal requirements. For instance, the AER considers how retailers handle customers experiencing payment difficulties and their performance in respect of the AER's hardship program indicators in its annual performance report.