The Retail Law contains provisions for a national Retailer of Last Resort (RoLR) scheme. The RoLR scheme is designed to ensure that, in the event of a retailer failing (a RoLR event), customers continue to receive electricity and/or gas supply.The AER has certain responsibilities under the RoLR scheme. The AER is required to:
- register default and additional RoLRs
- publish and maintain a register of RoLRs
- appoint designated RoLRs in relation to RoLR events
- publish RoLR guidelines and RoLR plans
- conduct RoLR exercises simulating RoLR events
- make RoLR cost recovery scheme determinations.
Flow Systems Pty Ltd electricity RoLR event
On 20 December 2018, Christopher Clarke Hill and Philip Patrick Carter were appointed as voluntary administrators to Flow Systems. The appointment of an insolvency official is a Retailer of Last Resort (RoLR) event under section 122 of the National Energy Retail Law (NERL).
On 15 February 2019, the Australian Energy Regulator (AER) issued a RoLR Notice under section 136 of the NERL. The AER decided not to revoke Flow Systems' retailer authorisation at that stage.
On 7 May 2019, the AER amended the RoLR notice in relation to Flow Systems.
Under the Retail Law, the AER is required to appoint and register default RoLRs.
The Retail Law also provides that retailers that have submitted an expression of interest may be registered as additional RoLRs. Additional RoLRs may submit firm or non firm offers to take on customers in the case of a RoLR event. A firm offer is an agreement to take on customers, stipulating the number and classes of customers the retailer will take on (and in which jurisdictions), plus any cost recovery arrangements it proposes. A non firm offer does not provide binding terms and conditions, rather it is an indication that the retailer may wish to take on customers in the case of a RoLR event, with terms and conditions confirmed prior to appointment as a designated RoLR.
A retailer who wishes to be registered as an additional RoLR can submit an Expression of Interest (EoI) to the AER. The AER's RoLR Guideline contains further guidance on EoIs, and also specifies the manner and form of information that should be included in a retailer's EoI.
Current tenders for additional and default RoLRs
Further information on current tenders for additional and default RoLRs can be found on the Expressions of Interest and Appointments page.
The AER must maintain and publish on its website a register of RoLRs. The register includes particulars of each retailer, including whether a retailer is registered as a default RoLR or an additional RoLR, and what conditions, if any, apply. The register also shows whether an additional RoLR is registered with a ‘firm’ offer or a ‘non-firm’ offer. The register of RoLRs was last updated on 27 September 2016.
The AER must develop and maintain a RoLR plan that sets out the procedures to be followed by market participants in a RoLR event, including communication with the customers of the failed retailer. The plan also establishes the scope and frequency of RoLR scheme test exercises for RoLR plan participants.
The AER must conduct regular RoLR exercises with RoLR plan participants. Reports on the conduct of the exercises must be published on the AER website. A RoLR exercise for electricity industry participants was held on 17 June 2015. A report on the conduct of that exercise was published in July 2015. A RoLR exercise for the gas industry was held on 10 November 2015. A report on the gas industry RoLR exercise was published in December 2015.
RoLR exercise reports:
- AER Gas industry RoLR exercise report - December 2015
- Electricity industry RoLR exercise report - July 2015
- RoLR public exercise conduct report - 21 October 2013
Cost recovery schemes
On application by a registered RoLR the AER must determine a RoLR cost recovery scheme for the RoLR. A RoLR cost recovery scheme is designed to allow a RoLR to recover the costs it incurs in relation to the RoLR scheme. A designated RoLR may recover costs incurred on and after a RoLR event. Under a cost recovery scheme only default RoLRs may recover costs incurred in preparing for RoLR events.