The Australian Energy Market Commission is seeking stakeholder feedback on proposals to strengthen the Retailer of Last Resort (RoLR) scheme, which protects customers from losing access to power if their electricity or gas retailer goes out of business.
The Commission’s 2020 Retail Competition Review recommended changes to the scheme including:
- Adding the potential for customers who lose their existing retailer to move to a competitive market offer with their new provider, rather than a more expensive standing or default offer, as happens now
- Making it easier for a wider range of retailers to register as retailers of last resort, subject to them meeting financial tests. This would provide a competition benefit and spread the risk across the market.
The recommendations are designed to help keep the national electricity market financially stable and improve outcomes for small customers.
Following the Competition Review, the ministerial forum of Energy Ministers (formerly the Council of Australian Governments Energy Council) asked us to provide advice to governments on updating the RoLR scheme. We have begun that process with a consultation paper released today seeking stakeholder input.
The higher risks in the electricity sector due to the COVID-19 pandemic, which may last for a prolonged period, make it particularly timely to consider changes to the scheme. As the market has become more competitive over the past decade, it will be important to ensure those gains are not eroded in the event of retailer failure.
The Commission has already moved in other ways to help protect consumers from impacts of retailer failure in the market during COVID-19, including by allowing some retailers to manage the higher number of customers who are unable to pay their bills by deferring their own bills to networks for six months.
The RoLR scheme has only been triggered on a handful of occasions, including in 2009 when Jackgreen’s failure affected 67,500 customers.
Stakeholders are invited to provide submissions by 19 November 2020.
Media: Kellie Bisset, Media and Content Manager, 0438 490 041