AER Prioritises Consumer Protection and Market Transparency

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The Australian Energy Regulator (AER) released its Compliance and Enforcement Priorities for 2023-24, outlining key focus areas for monitoring and enforcing compliance in Australia’s energy markets over the next year. The priorities aim to protect consumers, especially those experiencing vulnerability, enable competitive markets, and support efficient infrastructure.

A top priority for the AER is improving outcomes for customers experiencing financial hardship. The AER notes that “with the considerable challenges facing the east-coast energy market and rising cost of living more generally, we expect to observe a significant increase in the number of consumers experiencing financial hardship this year.” The AER will closely monitor retailers’ compliance with hardship obligations and policies. “Our focus will be on ensuring that all eligible customers are able to access the protections they are entitled to under the existing framework. This includes ready access to hardship programs and payment plans that reflect a customer’s capacity to pay,” the AER stated.

Retailers should ensure their hardship policies and programs meet all requirements to support customers facing financial difficulties. “At the same time, we have concerns that a number of current retailer hardship policies could be improved. We will also look to identify opportunities to collaborate with retailers to review these policies with a view to improving outcomes for customers,” the AER said. Retailers should take this opportunity to review and strengthen their hardship policies and programs where needed to comply with obligations and better support vulnerable consumers.

Another high priority area is compliance with billing requirements, including the new Better Bills Guideline. “Bills are a key source of information and communication between consumers and energy retailers. The information in bills helps customers to make confident decisions, such as making sure they are on the best deal for them or shopping around for a better deal,” the AER said. The AER warned that “billing related issues affect more customers than other breaches reported to the AER by retailers, and make up approximately half of the referrals to the AER from Ombudsman schemes and consumer groups.”

Retailers must ensure full compliance with the Better Bills Guideline by September 2023 and address any billing issues to provide customers with clear and accurate information. “Recognising the current cost of living pressures on consumers, the AER will also focus on related issues where there is significant customer harm including overcharging, estimated reads, billing delays, failures to notify of price and tariff changes and failures to comply with standing offer obligations,” the AER stated.

The AER has identified improving market transparency as another key priority, including compliance with the new Gas Market Transparency Measures. “The AER will now focus on bringing clarity to the obligations and requirements which extends across the supply chain including gas reserves and resources estimates, LNG exports and large user demand reporting, and short-term domestic and LNG sales information,” the AER said. “Ensuring the accurate and timely provision of this information, will drive better pricing transparency, improved efficiency of gas markets, facilitate investment decisions and inform government policy.”

Market participants must understand and comply with these new reporting obligations to provide the transparency needed to ensure efficient gas markets and inform critical decisions. The AER warned it will monitor compliance and take action against non-compliance.

In summary, the AER’s priorities focus on protecting consumers, improving market transparency, and enabling competitive and efficient energy markets. Retailers should strengthen their consumer support, billing processes, and reporting procedures to meet obligations and avoid potential enforcement action. By addressing these priorities, retailers can build consumer trust and support well-functioning energy markets.

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