On 17 April 2020, the AEMC received a rule change request from the Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP, to amend the National Energy Retail Rules.

The rule change proposal sought to simplify energy bills, so households and small business owners can better understand and manage their bills, and find a better energy deal. It covered both gas and electricity bills. 

Under the National Energy Retail Rules (NERR), retailers are required to prepare an energy bill complying with 26 content requirements. The proponent considered the rules should be changed to establish the objective and guiding principles for energy bills, which would underpin a mandatory AER guideline on billing requirements.

Final determination and rule

In response to the rule change proposal, the Commission has made a more preferable final rule. The more preferable final rule requires retailers to comply with an AER mandatory guideline (the billing guideline). The more preferable final rule adopts many elements of the rule change request.

The more preferable final rule made by the Commission:

• Includes a bill objective, setting out the purpose of an energy bill (comprising six components). For example, to enable small customers to easily understand payment amounts, dates and payment methods for their bill.
• Requires the AER to make a billing guideline in relation to how retailers prepare and issue bills to small customers that meet the bill objective. The provisions in the billing guideline will replace the current bill information requirements in rule 25(1) of the NERR.
• Requires the AER, in making and amending the billing guideline, to:
  • take certain principles into account
  • do so in a manner that will or is likely to contribute to the achievement of the National Energy Retail Objective (NERO) and is compatible with the consumer protection test follows the retail consultation procedure 
• Allows the AER to specify in the billing guideline different types of billing information that a retailer must provide and whether information of different types may be provided to a small customer by different delivery methods with their consent. 
• Removes the obligations on retailers regarding electricity consumption benchmarks in rule 170 of the NERR (noting the AER may include this or a related obligation on retailers in the billing guideline). 

The more preferable final rule seeks to achieve a number of policy goals, including:

• simplifying energy bills, for example by allowing some bill information to be delivered digitally (if a consumer so chooses) and ensuring effective, easy-to-understand information is included (for instance, to help consumers use energy efficiently)
• a regulatory framework that is adaptable over time 
• a regulatory framework that protects consumers while enabling innovation and competition
• billing provisions that reflect the variety of offers and consumer preferences in the market
• promoting cost and usage information on bills that helps small customers use energy efficiently, engage in the market and consider investing in self-supply options such as solar and batteries. 

Key changes between the draft rule and the final rule

The Commission has retained the regulatory approach in the more preferable draft rule, however, it has made the following key changes:

The more preferable final rule includes provisions that:

• require the AER to make and amend the billing guideline in a manner that will or is likely to contribute to the achievement of NERO and is compatible with the consumer protection test; 
• allow the AER to specify in the billing guideline different types of billing information a retailer must provide and whether information of different types may be provided to a small customer by different delivery methods, with their consent; and
• remove the obligation on retailers regarding providing electricity consumption benchmarks in rule 170 of the NERR, but enables the AER to include such a requirement in the billing guideline. 

The Commission has determined not to amend the current bill frequency requirements in rule 24(1) as they appear to be providing sufficient protection to consumers. Under the current rule retailers can offer shorter billing periods for both standing offers (shorter than 100 days) and market offers. 

The implementation process for the more preferable final rule has also been amended so that:

• The AER will publish the first billing guideline by 1 April 2022. 
• Retailers will be required to comply with the billing guideline from 4 August 2022, however the AER may specify different commencement dates for certain provisions in the billing guideline after this date, provided that all provisions in the first billing guideline commence by 31 March 2023. 

Submissions on the draft determination and more preferable draft rule closed on 4 February 2021.

Consultation process

On 24 September 2020, the Commission published a consultation paper seeking feedback on whether stakeholders:

• agree with issues identified by the proponent and their materiality. That is, that rule 25 of the NERR is not delivering energy bills that householders and small business owners can understand, and the need for greater stipulation on how bills are delivered. 
• support the proposed solution or alternative solutions, and why. 

Feedback was requested on the issues identified by the proponent with energy bills, and how its materiality will evolve over time given digitalisation, key post-2025 reforms (two-sided market design) and the introduction of a Consumer Data Right (CDR) in energy.  

Submissions on the consultation paper closed on 22 October 2020.

On 17 December 2020, the Commission published a draft determination and more preferable rule seeking feedback from stakeholders. 

Submissions on the draft determination and more preferable draft rule closed on 4 February 2021.