Market Review: Completed
Overview
On 30 June 2020 the AEMC published the 2020 Retail energy competition review. As part of this, the Commission published its final analysis on consumer protections in an evolving market.
The purpose of this part of the review was to analyse potential changes to the NECF to allow consumers to make the most out of digital technologies and outline how market developments and new, non-traditional energy products and services are raising key questions from a regulatory perspective.
The final report includes the following:
- Chapter 9 - framing chapter that analyses the current energy-specific consumer framework and characterises the evolving energy market. Includes a section on the benefits and challenges of voluntary vs. mandatory frameworks, and prescriptive and principles-based frameworks.
- Chapter 10 - focused on potential changes to the National Customer Energy Framework (NECF) for the traditional sale of energy, specifically on information provisions (bill contents and notifications), explicit informed consent and cooling-off periods.
- Chapter 11 - focused on how market developments and new, non-traditional energy products and services are testing the boundaries of the NECF and whether consumer protection, over and above the Australian Consumer Law (ACL), are needed.
Background
In the AEMC’s 2019 Retail energy competition review final report the Commission mapped the consumer protections that energy consumers in the national electricity market currently receive under the NECF and the ACL.
This was the first step in assessing whether energy consumers are receiving appropriate protections, and barriers to innovation are minimised. The Commission concluded that the NECF generally complemented the ACL in protecting energy consumers from harm.
However, the Commission noted the need for further analysis in two areas:
- Consumer protections related to new energy products and services. Consumers are benefiting from product innovation, new technologies (such as batteries) and a range of new business models and suppliers. However, as the NECF relates specifically to the sale of energy by authorised retailers, there is a need to assess if, or what, consumer protections should apply to these new services and products and suppliers
- The impact of digitalisation on regulatory provisions under the NECF for the traditional sale of energy. The provisions in the NECF related to giving consumers information about their energy data, contract, and price changes may need to be more flexible to account for digital technologies, so communication between retailers and customers can evolve in the most useful way for consumers. Also, digital technologies such as smart meters can make it easier for customers to switch retailers, which means that current requirements under the NECF for cooling-off periods and explicit informed consent may need changes to support consumers in their decisions and facilitate innovation.
Issues papers
On 12 December 2019 the Commission published two issues papers to seek stakeholder views on the consumer protections issues papers.
Issues Paper 1 is focused on consumer protections in relation to new energy products and services.
Please note that an updated version of Issues Paper 1 was published on 13 December 2019. Due to a technical error, a previous version of the paper was published that did not accurately reflect the extension to the time for making a final determination and final rule for the Wholesale demand response mechanism rule change request.
Issues Paper 2 is focused on the impact of digitalisation on consumer protections in relation to the traditional sale of energy.
Submissions were due by 13 February 2020.
Stakeholder consultation workshop
The AEMC held a public workshop on 6 February 2020. The discussion notes are below.