The National Energy Retail Law and the National Energy Retail Rules contain a range of measures designed to help consumers compare and make more informed choices about energy products and how they use energy. The Retail Law and Retail Rules has commenced in the ACT, Tasmania, South Australia, New South Wales and Queensland. Victoria is yet to commence the Retail Law and Retail Rules. Western Australia and the Northern Territory are not part of the National Electricity Market and will not be adopting this framework.
The AER is required to develop and operate an energy price comparison website. The website, Energy Made Easy, was launched on 1 July 2012.
Residential and small business customers in jurisdictions where the Retail Law and Retail Rules have commenced can use Energy Made Easy to compare their full range of generally available offers, including details such as GreenPower options, discounts and incentives, and key terms and conditions.
Energy retailers are required to provide information and data to the AER on their generally available offers for inclusion on the Energy Made Easy website. Retailers are required to provide information on their offers in accordance with the AER’s Retail Pricing Information guidelines.
The Retail Law and Rules also contain requirements for energy retailers to include information on the electricity bills of residential customers to enable them to compare their household electricity usage with that of households of a similar size in their local zone.
These are called electricity bill benchmarks and are designed to help customers make more informed decisions about how they use energy.
The electricity bill benchmarks are one of the measures delivered as part of the National Framework for Energy Efficiency (NFEE). During 2004, the Ministerial Council on Energy agreed on the implementation of the NFEE which provides a coordinated national approach for a range of energy efficiency measures.
Under the Retail Law and Rules, the AER has responsibility for the implementation and ongoing review of the electricity bill benchmarks; however ACIL Tasman, has developed the benchmarks. ACIL Tasman's December 2014 report, Guidance on electricity consumption benchmarks on residential customers' bills describes how the benchmarks were developed.
Energy Made Easy fulfils the AER’s obligations to publish the electricity consumption benchmarks. By entering their postcode and information on household size, residential customers in all jurisdictions can find information on the average amount of electricity used by similar sized households in their area.
There is a requirement that household electricity bills also include the Energy Made Easy website details. This is to make sure that all customers can access the benchmarks relevant to their household by visiting Energy Made Easy.
The default market offer (DMO) limits the price that retailers can charge electricity customers on default contracts, known as standing offer contracts. The DMO came into effect on 1 July 2019. It applies to small business and residential customers on standing offer tariffs in areas where there is no other retail price regulation – South Australia, New South Wales and south-east Queensland (Energex).
The AER’s role is to determine the maximum price that a retailer can charge a standing offer customer each year. The DMO price for each area also acts as a ‘reference price’ for residential and small business offers in that area. When advertising or promoting offer pricing, retailers must show the price of their offer in comparison to the DMO/reference price. This aims to help customers more simply compare the price of different offers.
The DMO is an annual determination and we are required to consult on these determinations.
The Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (Regulations) sets out the legislative framework for the DMO. The Guide to the Electricity Retail Code by the ACCC is designed to help electricity retailers understand their responsibilities under the Regulations.
In Victoria, electricity standing offers are capped by the Victorian default offer.
Market offers or tariffs (for electricity or gas) are not capped, which means that energy retailers set all of their own prices.
Under the Retail Rules, a retailer cannot disconnect a customer for non payment where the amount owing is less than an amount approved by the AER and the customer has agreed to repay the amount owing.
The AER has approved a minimum disconnection amount of $300. This amount applies separately to gas and electricity and in all jurisdictions adopting the Retail Law and Rules. For more information on the AER’s consultation process on approving this amount, see Minimum disconnection amounts. The AER will review this amount again, once it has been in effect for 18-24 months.
The Retail Rules set a threshold amount over which residential and small business customers may direct retailers to repay an amount overcharged (rather than crediting the amount to their account). The Retail Rules set the overcharge threshold at $50.
The Retail Rules require retailers to inform residential and small business customers if they become aware of any overcharging within 10 business days. If the amount overcharged is $50 or more, the retailer must repay the amount as directed by the customer (or credit it to their next bill if there is no direction from the customer). If the amount is less than $50 then the retailer must credit the amount to the next bill. In cases where the customer no longer has an account, the retailer must attempt to refund the amount to the customer within 10 business days.
The AER may determine a new overcharge threshold after consultation with stakeholders and must also publish the current overcharge threshold on its website.
The Retail Law includes a small compensation claims regime which participating jurisdictions can choose to apply in their state or territory. This enables residential and small business customers to make claims for compensation from distributors for property and other damage incurred in certain circumstances. Under the regime, customers do not have to establish fault, negligence or bad faith on the part of a distributor in order to receive compensation from the distributor.
To date, Victoria is the only jurisdiction planning to adopt the small compensation claims regime.
The Retail Law provides for the amounts that can be claimed by customers as well as the processes distributors must follow when assessing a claim and determining how much compensation must be paid. Jurisdictions who adopt the regime can set limits on the amount that can be claimed, and where they don’t the AER must. The AER can only set these amounts after a consultation process. Jurisdictions can specify the kinds of claimable incidents and compensable matters for which a customer can make a claim under this regime.
The AER must also determine a repeated claims maximum number. A customer who makes a number of claims equal to or exceeding the repeated claims maximum number, within the period set by the AER, becomes a ‘repeat claimant’.
When a ‘repeat claimant’ makes a claim and the distributor reasonably considers the claim forms part of an abuse of the small compensation claims regime, the distributor can pay the amount claimed, pay a lesser amount (which may be any amount at or above the minimum amount determined) or reject the claim.
Energy retailers may sell energy using a prepayment meter system only within jurisdictions where its use is permitted under a local instrument.
Prepayment meter systems allow customers to buy credit to put towards their energy account. This is stored on their meter and the customer pays for the energy they use as they use it. Credit is typically purchased from outlets, in a range of amounts, and is stored on a smart card. The credit is then transferred from the smart card to the prepayment meter, and the meter records how much credit the customer has left. The prepayment meter also stores some ‘emergency credit’, to enable customers to ‘top-up’ their prepayment meter before their credit runs out.
The amount of emergency credit is prescribed in the Retail Rules and must be at least equivalent to the average cost of three days of electricity or gas supply (as applicable). The AER is able to approve another amount from time to time.
For the purposes of calculating the amount of emergency credit, a retailer must provide the AER with a statement of its methodology for determining the average cost of energy supply when requested to do so by the AER. If the AER does not approve the methodology, the retailer must change it if required to do so by the AER.