Retail Exempt Selling Guideline review 2021-22

Segment: 
Category: 
Exemption guideline
Status: 
Date initiated: 
18 May 2021
Effective date: 
1 June 2022
Contact: 
General enquiries - Exemptions AERExemptions@aer.gov.au
AER reference: 
AER212323

Overview

Exempt selling occurs when a person or business purchases energy from a retailer and on-sells the energy to their customers, commonly through an embedded network. The AER governs who can on-sell energy without becoming an authorised retailer, and the conditions exempt sellers have to comply with, via its Retail Exempt Selling Guideline. An exempt seller’s core business is not the sale of energy.

Draft Retail Exempt Selling Guideline

On 9 March 2022 the AER published its draft Retail Exempt Selling Guideline (version 6) for public consultation, which includes a copy of newly established documents:

  • draft AER factsheet titled How to access retailers for your energy needs if you live in an embedded network
  • draft Exempt Seller Hardship Policy template.

Most of the amendments to the guideline involve revision or ‘fine-tuning’ to support exempt sellers to understand their compliance obligations and ensure protections are accorded to customers. However, there are some key amendments that may be of particular interest to stakeholders:

  • the introduction of a new hardship policy condition
  • the introduction of a new information provision condition for exempt sellers to provide their customers with an AER factsheet. This factsheet sets out for these customers the process, and the difficulties they may face, if they want to purchase energy directly from a retailer
  • clarifying our expectations that conversions to embedded networks must only occur when prospective customers are fully informed of the impacts and provide their consent
  • the introduction of a requirement to provide evidence of steps taken to obtain ombudsman scheme membership, as part of the individual exemption application process.

Our reasons for these changes are set out in the Notice of Draft Instrument.

Submissions

Interested stakeholders were invited to make submissions on our draft Retail Exempt Selling Guideline. Submissions closed on 7 April 2022 and those received are available to view. We are in the process of assessing the submissions received, and thank all stakeholders who provided feedback.

Background

In May 2021 we commenced a review of the current AER (Retail) Exempt Selling Guideline and the Electricity Network Service Provider – Registration Exemption Guideline (the Network Exemptions Guideline).

The objectives of this review are to:

  • improve the clarity and readability of exemption requirements
  • streamline the Network Exemptions Guideline and remove redundancies
  • introduce standardised statements in both guidelines where information requirements need to be met
  • improve consistency between the two guidelines.

On 18 May 2021 we published a consultation paper discussing general concerns identified within both guidelines. These issues have been referred to us by a range of stakeholders, including ombudsman schemes, and through complaints and queries to the AER. Submissions closed on 30 June 2021 and those received are available to view.

Under the National Energy Retail Law (NERL), any person or business who sells energy to another person for use at premises must have either a retailer authorisation or a retail exemption. Under the National Electricity Law (NEL), any person or business who owns, controls or operates an electricity network, must be registered as a network service provider (NSP) with the Australian Energy Market Operator (AEMO) or be subject to a network exemption from the AER.

The AER can issue exemptions to persons or classes of persons and impose conditions on these exemptions in accordance with the Retail Exempt Selling Guideline and the Network Exemptions Guideline. These guidelines set out the processes for registering and applying for exemptions, and outline the various exemption classes, their eligibility criteria and exemption conditions. They also detail our policy considerations when making decisions on exemption applications and on exemption classes and conditions.

The AER (Retail) Exempt Selling Guideline (version 5) and the Electricity Network Service Provider - Registration Exemption Guideline (version 6) were both published in March 2018.