On 27 September 2018 the Australian Energy Market Commission made a final rule requiring retailers to notify their electricity and gas customers at least five business days before their energy prices change. Advance notice will provide greater transparency and confidence in the retail energy market, helping consumers to avoid being surprised by their energy bill and giving them the opportunity to consider a variety of actions to manage changes to their energy bill before they occur. 

The rule requires retailers to provide clear and concise price change notices. The notices must be sent by the customer’s preferred form of communication and include information on the energy tariffs and charges to apply both before and after the change. 

The AEMC and AER are jointly recommending the COAG Energy Council approves a civil penalty provision if retailers do not deliver the notices in time. 

The rule started on 1 February 2019.

Final determination

The final rule expands the rule change proposal to apply advance notice to all small retail energy consumers on market and standing offer contracts for both price increases and decreases. 

The final rule requires retailers to:

• provide advance notice of price increases and decreases, five business days in advance of the change 
• use the customer’s preferred form of communication 
• clearly indicate that the notice is a price change notice
• include the date of the change, the customer’s existing tariffs and new tariffs, inclusive of GST, so they are easy to compare
• provide a prompt that the customer can access their historical billing and usage data if required.

Exemptions apply:

• for consumers on regulated retail prices
•  for customers whose prices are linked to the spot price and therefore vary within the year
• for customers who have already received a price change notice within 10 days of the price change because they have recently entered into the contract
• where customers have already received notice as a result of their fixed benefit period ending
• where changes to the consumer’s energy costs are due to the expiry of a government concession or relief scheme
• where changes to the tariffs and charges are a direct result of changes to bank charges or fees, credit card charges or fees, or payment processing charges or fees
• where changes to the tariffs and charges are a direct result of a network tariff reassignment by the distributor.

Background

On 1 March 2018 the AEMC received a rule change request from The Honourable Josh Frydenberg MP, Minister for the Environment and Energy on behalf of the Australian Government and the Honourable Don Harwin MLC, Minister for Energy and Utilities on behalf of the NSW Government in relation to advance notice of price changes on retail energy contracts with small consumers.

The rule change request was aimed at amending the National Energy Retail Rules (NERR) to require ten business days advance notice of price increases to market offer contracts and advance notice of price increases to standing offer contracts. 

The rule proposal also stipulated that the AEMC may consider it appropriate to enhance the price change notice requirements to, for example, clearly state:

• that a price change will occur, the price change and the price change date
• that the small customer may use the price comparator to compare offers that are generally available to classes of small customers in their area
• the name and web address of the price comparator
• that the customer can request historical billing data and/or energy consumption data, from the retailer.

On 26 April 2018 the AEMC published a consultation paper setting out the issues raised by the rule change request. 18 submissions were received on the consultation paper and can be found below.

On 5 July 2018 the AEMC published a draft determination and a draft rule on the rule change request. 16 submissions were received on the draft determination and can be found below.