2022-2023 Compliance and Enforcement Priorities of the AER

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook

The Australian Energy Regulator (AER) has published its 2022-2023 Compliance and Enforcement Priorities. The AER will continue to focus its compliance and enforcement activities on how retailers assist customers who are facing financial difficulties and those who are within embedded networks.

Customers who are facing financial difficulties

The AER’s focus on vulnerable consumers is understandable with market conditions expected to result in higher energy costs for consumers who are already facing higher costs of living.

The AER notes that:

We continue to closely monitor data on consumers facing financial difficulties, including debt levels, the number of consumers on payment plans and hardship programs, and the successful completion of those plans and programs.

We remain concerned by the average debt per customer upon entry into hardship programs, and the number of customers being disconnected, which may suggest that customers are not being identified as hardship customers early enough. There is a continuing requirement to ensure residential customers in financial difficulty
are given the full suite of protections in the Retail Law and Retail Rules, including protections in retailers’ own hardship policies, and that these protections are offered to both existing and former customers. Retailers must offer and apply payment plans to customers requiring payment assistance.

In a recent update webinar, the AER noted:

  1. the importance of assessing a customer’s capacity to pay when establishing a payment plan;
  2. the importance of early identification and assistance for customer’s experiencing financial difficulty; and
  3. the need to ensure that customer discussions are empathetic and not simply based on approved scripts.

Earlier this week the AER announced very significant penalties paid by Origin Energy and related entities with respect to customer hardship obligations and once the relevant judgment has been published we will be providing further updates and insights to our clients.

Lesson: All energy sellers should carefully re-examine their customer hardship policies, training, and processes to ensure that they align to the relevant regulatory requirements.

Embedded network customers

Embedded networks remain an area of focus for the AER. The AER notes that:

In 2022/23 the AER is expanding the priority to improve outcomes for more consumers in embedded networks by including those being sold energy by authorised retailers. Stakeholders continue to tell us about the inherent vulnerability of embedded network consumers. This is due to the difficulty these consumers face accessing competition, regardless of whether they are sold energy by an authorised retailer or exempt seller. Customers in embedded networks may face higher prices and lesser protections in relation to continuity of supply and life support equipment.

Lesson: it is notable that the AER specifically mentions authorised retailers in relation to embedded networks. Authorised retailers who sell energy within embedded networks should carefully examine their policies, processes, systems and training to ensure compliance with all applicable regulatory obligations.

Other priorities

The AER will also be focusing on generator’s compliance with offers, dispatch instructions, obligations in relation to bidding behaviour and the provision of accurate and timely information to AEMO.

The AER notes that:

The requirement for generators to ensure compliance with NER obligations relating to offers and their ability to comply with AEMO dispatch instructions and obligations regarding bidding behaviour is critical to power system security and efficient outcomes in wholesale energy markets, particularly where the conduct contributes to market event

The AER will also focus on the gas market including ensuing that service providers meet information disclosure obligations under Part 23 of the National Gas Rules and on timely and accurate gas auction reporting and demand forecasting in downstream wholesale gas markets by registered participants.

If you would like to discuss your compliance program please get in touch.

More to explorer

Technicians installing photovoltaic solar panels on roof of house.

Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

On 11 April 2024, Compliance Quarter put forward its submission on proposed changes to the AER Compliance Procedures and Guidelines. The AER is reviewing its Compliance procedures and guidelines, which set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law must submit compliance information and data to the AER. We argue that there should be consideration of measures to incentivise early reporting of potential breaches. These may, for example, take the

person wearing foo dog costume

Obligations of Energy Retailers Regarding Best Offer Information

Energy retailers in Victoria have specific obligations under the Energy Retail Code of Practice to provide clear information to customers about their ‘best offer’ – that is, the plan that would minimize the customer‘s energy costs based on their usage history. The objective is to ensure small customers can easily understand whether they are on the retailer‘s best plan for them and how to access the retailer‘s best offer if not. One of the significant challenges in the energy sector (as in banking and elsewhere) is that customers

low angle photo of sydney opera house australia

Guide to the National Energy Retail Rules

The National Energy Retail Rules (NERR) are a set of rules that govern the sale and supply of electricity and gas by retailers to consumers in Australia, alongside the related National Energy Retail Law (NERL). The NERR came into effect on 1 July 2012 in Tasmania, the Australian Capital Territory, and the Commonwealth. South Australia followed on 1 February 2013, New South Wales on 1 July 2013, and Queensland on 1 July 2015. The NERR do not yet apply in

Leave a Reply

Your email address will not be published. Required fields are marked *