The Australian Energy Market Commission today announced new obligations on retailers so customers can get the help they need to pay their bills.
The Commission has also recommended that the federal, state and territory energy ministers make a law to keep new retail businesses out of the market until they have approved hardship policies in place.
The new rule requires the Australian Energy Regulator (AER) to develop new customer hardship guidelines that are binding on retailers. The new guidelines will require retailers to:
- detail their process for early identification of vulnerable customers, so they can be included on hardship programs before their debts get out of control
- use consistent, transparent and specific action statements in their hardship policies so customers know their rights.
Retailers will also have to set out how they will help customers pay their bills by:
- ensuring customers are on the best energy plan that meets their needs
- offering programs to help customers manage their energy use, such as audits
- putting customers on a manageable payment plan.
The final determination includes a joint AEMC/AER recommendation for new civil penalties, such as fines, to protect customers if retailers fail to comply with the new obligations. Having clearer hardship policies would also make it easier for the AER to monitor the performance of retailers and penalise any breaches.
The changes will be part of the National Energy Customer Framework (NECF) which applies in the ACT, Tasmania, South Australia, New South Wales and Queensland. The changes will not apply in Victoria as it has its own Energy Retail Code.
The AER must have the new hardship guidelines in place by 1 April 2019.
This rule is part of the AEMC’s consumer protection action plan.
Media: Bronwyn Rosser, Communications Specialist, 0423 280 341; or (02) 8296 7847; bronwyn.rosser@aemc.gov.au
Background
This rule change request from the AER is an outcome of its 2017 Hardship Review which found deficiencies in how retailers implement their hardship policies. These policies are designed to help vulnerable customers pay off their debt and avoid having their electricity and gas disconnected.
The review found that many policies may not sufficiently align with the minimum requirements of retailers’ hardship obligations under the National Electricity Retail Law. Also, many customers are not receiving adequate guidance from their retailer about their rights and entitlements.
Some recent AEMC consumer protection rules
| RULE | CHANGE |
| Strengthening protections for customers in hardship | Making sure customers know their rights and get the help they need to pay their bills |
| Metering installation timeframes | Under the AEMC’s competition in metering rules all new meters must be advanced or “smart.” Hundreds of meters are being rolled out every day without any problems. But there are delays in some places. We are proposing to give consumers the power to determine when they want a new meter installed, backed up by fines and daily penalties if retailers let them down. |
| Estimated meter reads | Retailers must accept meter reads provided by customers who think their estimated electricity or gas bill is wrong. Retailers must also let customers know they can provide their own meter reading if they want, instead of accepting retailers’ estimates. This will reduce the risk of customers being exposed to the financial shock of inaccurate estimated bills. |
| Advance notice of price changes | Retailers must now notify customers before prices change so customers can take action to shop around for a better deal or take other actions to prepare for the change. |
| Preventing discounts on inflated energy rates | Bans retailers from offering discounts off inflated base rates. Some retailers were doing this to make discounts look bigger, deliberately confusing and misleading customers. |
| Notification of end of fixed benefit period | Requires retailers to notify customers when benefits (like discounts or subscriptions) are ending so customers can take action to shop around for a better deal if they want to. |
| Strengthening protections for customers requiring life support equipment | Strengthens and formalises the registration and deregistration processes for customers who have a person requiring life support equipment residing at their premises |