AER releases 2020-21 compliance and enforcement priorities

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Key priorities for the Australian Energy Regulator

On 6 August 2020 the Australian Energy Regulator (AER) released its compliance and enforcement priorities for 2020 to 2021. The AER notes that its priority statement should be read alongside the current Statement of Expectations of energy businesses which set out the 10 principles the AER expects energy retailers to adhere to during the COVID crisis.

Generally, the AER has noted that it will maintain the 2019 to 2020 priorities with changes in recognition of the current COVID crises.

The first priority for the AER is customers in financial difficulty and ensuring that those customers are offered sustainable and affordable payment plans and timely access to retailer hardship programs. We have written extensively about the identification of customers who are potentially experiencing financial difficulties in previous posts. The general economic conditions that exist today and that are likely to develop over the next 6 to 12 months clearly mean that sustainable and affordable payment plans and hardship will be a priority. Additionally, the AER is focused on ensuring that customers are not wrongfully disconnected.

The second priority for the AER is on ensuring that customers using life support equipment are protected. During the previous 12 months, various improvements were made in the regulatory regime applicable to life-support including to standardise processes that retailers must follow when registering and deregistration customers who require life-support equipment. Energy retailers will need to ensure that they follow the current regulatory regime including by following the registration and deregistration processes and by keeping up-to-date records.

The third priority of the AER is to ensure that both AEMO and the AER are provided with accurate and timely information. The AER notes that AEMO requires accurate and timely information to ensure power system security and efficient outcomes in the operation of the energy market. There have been numerous examples of retailers failing to implement systems and processes to adequately report on their performance and compliance. Reporting is fundamental to the AER’s capacity to adequately monitor the market.

The fourth priority of the AER is to support the transition to metering contestability to ensure consumer and market benefits are delivered. We previously written about the various obligations that apply when it comes to metering installation timeframes. All energy retailers must ensure that metering coordinators are appointed for each connection point and that the obligations relating to the installation and rectification of metering are complied with.

The final priority for the AER is to increase market transparency through strengthening the gas market reporting requirements and ensuring access to pipeline capacity under the east coast gas reforms.

All energy retailers should carefully review the AER’s compliance and enforcement policy and ensure that they have adequate controls in place for each of the priorities outlined above.

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