Stakeholders are invited to provide feedback on a rule change request from the Federal Minister for Energy & Emissions Reduction that seeks to regulate conditional discounting practices by energy retailers. 

Conditional discounts are contracts where customers receive lower prices when they fulfil certain payment conditions during the term of a contract. The most common types of conditional discounts are pay-on-time and direct debit.

Under the proposal, retailers would be required to limit the level of conditional discounts for gas and electricity retail contracts to the "reasonable cost savings" that the retailer expects to make if a customer satisfies the conditions of the discount. 

The AEMC has published a consultation paper seeking feedback on a range of issues, including whether large conditional discounts result in excessive penalties for customers, and the impact of conditional discounting on particular groups of customers such as hardship customers. 

The paper also notes the introduction of the Default Market Offer through the Electricity Retail Code of Conduct on 1 July 2019, which restricts both the magnitude and advertisement of energy offers with conditional discounts. This is also likely to have an impact on the prominence and level of conditional discounting in the retail market and may influence the materiality of the issues identified in the rule change request. However, the paper also notes the Code does not apply to electricity in Tasmania or the ACT, or to gas offers generally. 

Stakeholder submissions on the consultation paper are due by 19 September 2019. 

Media: Bronwyn Rosser, Communications Specialist, 0423 280 341; bronwyn.rosser@aemc.gov.au