How energy consumers are protected under the NECF and ACL
There are two main sources of consumer protection for energy products and services, the National Energy Customer Framework (NECF) and the Australian Consumer Law (ACL). The ACL is the principal consumer protection and fair trading law in Australia. The NECF regulates the sale and supply of electricity and gas to retail customers, and harmonises most energy consumer protections across participating jurisdictions. The NECF complements and operates alongside the generic consumer protections in the ACL, and state and territory regimes.
The NECF was developed in the context of regulating traditional services and the Australian energy retail market being opened up to competition. At the heart of this framework is the principle that consumers have a right to access energy (as an essential service) on fair and reasonable terms. Since the NECF was established, the energy market has undergone significant transformation due to new technology, innovation in products and services, and changes in consumer preferences. The way in which electricity is supplied to consumers and how consumers engage with the market is changing. These changes have potential regulatory implications, in particular on regulations designed to protect energy consumers.
In previous reviews the Commission has noted that the evolving nature of the energy market provides an opportunity to consider whether the existing energy specific consumer protection framework continues to meet its objective. There are differences between energy-specific consumer protections and more general consumer protections contained within the ACL. In order to understand these differences, and as a first step to reviewing how the NECF can continue to be fit for purpose, the content in this section of the website reviews and maps the consumer protection elements of the NECF and the ACL, with the following key sections:
- Mapping of the consumer protections under the NECF and the ACL identifying consumer outcomes under each framework
- Jurisdictional differences within the NECF
- A description of the enforcement powers to compare how consumers are protected under both frameworks and which are the applicable penalties and remedies
- Analysis of consumer protection for non-traditional energy services and products.
You can also download all the content found in this section as a PDF.
Note of clarification: The document ‘How energy consumers are protected under the NECF and ACL’ contains statements on pages 16 and 18 that the consumer guarantees in the Australian Consumer Law do not apply to the supply of electricity and gas. These statements may currently be inaccurate as section 65 of the Australian Consumer Law states that the consumer guarantees will not apply if the supply of gas or electricity is of a kind specified in the Competition and Consumer Regulations 2010 (Regulations). As at the date of this note, no such provisions are contained in the Regulations and, as such, the consumer guarantees do apply to gas and electricity. Please consult the Regulations to determine whether consumer guarantees continue to apply to the supply of electricity or gas.
AEMC's 2020 retail energy competition review and consumer protections
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 included the following:
- Chapter 9 - framing chapter that analysed the current energy-specific consumer framework and characterised the evolving energy market. Included 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.