A focus on best offer messaging by Victorian retailers

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The Essential Services Commission (ESC) has identified a variety of potentially concerning issues with the way that certain retailers have calculated and displayed best offers; including the the prominence and placement of best offers on bills; and the frequency that these messages appear on customers’ bills. Analysis is still underway and we can expect further updates from the ESC over the coming months.

Best offer obligations

The best offer obligations were introduced in 2019 as part of major reforms to help customers understand and identify the best offer available to them. The obligations include the display of the amount (in dollars) that a customer could be saving on a retailer’s best offer.

The ESC’s compliance focus

The ESC started a proactive compliance monitoring project focused on best offer obligations in April 2022. That program has included the collection of information from 17 retailers concerning their compliance with clauses 108–111 of the Energy Retail Code of Practice (the best offer obligations).

These obligations require energy retailers to regularly display information on customers’ bills telling them whether or not they are receiving their retailer’s best offer. The Energy Retail Code of Practice obligations explain how, where and when best offer messages must be displayed.

The ESC has stated that it will not hesitate to take action if its compliance monitoring program identifies that licensees are not meeting the best offer obligations (in line with our compliance and enforcement policy).

This could include:

* publication of a guideline or better practice examples

* developing and working through remediation plans with retailers

* industry-wide engagement and education

* potential enforcement action where serious contraventions are identified.

Billing accuracy was a compliance and enforcement priority in 2021–22 and best offer messaging continues to be a priority for 2022–23 as the ESC progress through the latter stages of its monitoring program.

Lessons for Victorian Retailers: Retailers should ensure that they are complying with their best offer obligations in the ERCOP. Retailers should also ensure that they are able to demonstrate that they are complying with their best offer obligations.

For further information refer to the September report published by the ESC here: https://www.esc.vic.gov.au/electricity-and-gas/market-performance-and-reporting/victorian-energy-market-report

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