On 27 June 2019, the AER released the draft version 6 of the Retail pricing information guidelines (the Guidelines) for consultation, proposing minor updates to reflect the new Electricity retail code (the Code).
In 2019, the AER decided that, due to a range of external developments and policy issues, it would not be practicable to proceed to amend the Guidelines.
In March 2020, the AER notified stakeholders through our Statement of Expectations of Energy Businesses that we would pause our plans to consult on updates to the Guidelines during 2020 in light of the global COVID-19 pandemic.
The AER Strategic Plan 2020-25 notes the AER will improve consumer outcomes while reducing costs to serve by boosting consumer and behavioural insights and applying them across AER initiatives (e.g. guidelines, better bills, Retail Pricing Information Guidelines, hardship/Sustainable Payment Plans Framework).
We are continuing to work, along with other market bodies, to review the timing of current and upcoming regulatory initiatives and approaches we all have underway (including the review of the Guidelines) and how these might need to continue to change so energy businesses can focus on their business and support their customers.
During June/July 2019, the AER consulted on the draft Guidelines. We proposed making minor changes to reflect the new Code. Submissions on the draft Guidelines closed 26 July 2019.
The Code made two key changes from 1 July 2019:
- implemented the new ‘reference price’ that is a maximum standing offer price for electricity supply to small customers, informed by the new ‘default market offer’ set by the AER, to protect consumers who do not engage in the market for one reason or another; and
- new requirements to ensure that the most prominent price-related feature in an advertisement must not be a ‘conditional discount’, and any conditions on discounts must be clearly displayed.
The AER and the ACCC jointly commissioned research from the Behavioural Insights Team, Testing Comprehension of the Reference Price. This research provides new insights about the ways consumers understand electricity offers and the AER and the ACCC will use these insights to consider how the presentation of electricity offers could be improved.
The draft Guidelines are accompanied by the Notice of draft instrument, which explains the development of the draft Guidelines, as well as other actions that the AER will be undertaking this year in relation to the Guidelines. For further information on the Guidelines consultation process, please consult our frequently asked questions (FAQs).