AER releases new billing compliance checks for energy retailers

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We recently looked at changes to compliance reporting guidelines issued by the Australian Energy Regulator (AER), today we examine three new compliance checks published by the AER that energy retailers should review.

 

 

By Anne Wardell, Compliance Quarter.

The AER has released three new compliance checks setting out the obligations which must be met under the National Energy Retail Rules.

The new compliance checks were issued on 28 June 2017 and cover:

  • Bill content, frequency and payment method, (Compliance check #2017-01);
  • Calculating and basis for bills, (Compliance check #2017-02); and
  • Billing complaints and incorrect charges, (Compliance check #2017-03).

The new compliance checks are available on the AER website at Retail Markets > Compliance.

The information contained in each of the new compliance checks is based on the requirements contained in Pt 2, Div 4 of the Retail Rules.
Each compliance check contains the following statement in relation to the AER’s approach to compliance:

We assess instances of potential non-compliance with the Retail Law and Retail Rules in accordance with our Statement of Approach (available on the AER website). We will consider a range of factors in deciding on an appropriate response and will take steps with the business involved.

Compliance check #2017-01

The information contained in compliance check #2017-01 is based on the requirements contained in Pt 2, Div 4 of the Retail Rules.

It contains the following summary of what must be included by energy retailers in a bill:

  • customer’s name, account number, address, meter number, date of issue, billing period and the pay by date;
  • total amount payable, including amounts owing and credits (such as discounts or rebates);
  • date of meter read, consumption, or that an estimation was used and date for the next read;
  • tariffs and charges applicable and the basis on which they have been calculated;
  • average daily consumption for the billing period and comparison to the same period in the previous year;
  • a telephone number for complaints and account enquiries, and a separate 24-hour telephone number of the distributor for fault enquiries and emergencies;
  • payment methods available such as credit card, direct debit or BPAY;
  • applicable government concession or rebate schemes and any amounts deducted or credited; and
  • electricity consumption benchmarks (for residential electricity customers).

It is important for energy retailers to prepare bills that are easy for customers to understand both their energy usage and the costs associated with that. To assist with this, compliance check #2017-01 provides a Good practice list for formatting bills:

  • Use a simple clear layout with a readable size font;
  • Where a pay-on-time discount is available, clearly label the total amount due with and without the discount;
  • Provide a line item stating the tariff or plan and the meter reading type;
  • Show the unit price in the calculation of total amount;
  • Use bold headings and subheadings to differentiate prices or tariffs;
  • If a price change has occurred across a billing period, outline the different prices applied;
  • Include minimal advertising on the bill;
  • Define usage and charges clearly;
  • Name concessions and discounts and note the period over which they applied; and
  • Make it clear if the bill is an estimate.

A good practice suggestion is also included.

Other matters covered by compliance check #2017-01 include:

  • Historical billing information;
  • Customer payment methods including Centrepay;
  • Paper and electronic bills; and
  • Responsibility for compliance.

Compliance check #2017-02

This new compliance check covers the following matters:

  • Basis for billing;
  • Estimated bills, including a Good practice note;
  • Tariff charges;
  • Proportionate billing;
  • Bill smoothing, including recalculation of the arrangement;
  • Requesting a final bill, including a Good practice note; and
  • Responsibility for compliance.

To ensure customer confidence, it is important for energy retailers to have effective practices in place for calculating and estimating bills.

Compliance check #2017-03

This new compliance check sets out the requirements for resolving customer complaints and processes in relation to incorrect charges.

The requirements contained in r 29 of the Retail Rules for complaint handling are set in the compliance check. It also suggests the following good practice steps:

  • Provide information on how and where to complain;
  • Provide contact details, including a number for complaints and a website URL address to access documents setting out the process;
  • Ensure the complaint and dispute resolution procedure is easily accessible to all complainants and includes information about the process, timing and ways to make a complaint;
  • Provide special arrangement/support for complainants with specific needs;
  • Protect personal information unless consent has been provided;
  • Undertake reasonable efforts to investigate all the relevant circumstances;
  • Communicate the outcomes of your investigation and proposed outcomes as soon as practical;
  • Ensure contact details for energy ombudsman’s contact details are clearly displayed on a bill;
  • If a customer makes a complaint, the retailer must respond within the required timeframes set out in its standard complaint and dispute resolution procedures;
  • Regularly review complaint handling procedures.

The new compliance check also covers the following:

  • Important note – billing customers, dealing with de energisation;
  • Undercharging;
  • Overcharging;
  • Overcharge threshold; and
  • Responsibility for compliance.

This is another area where retailers need to have good practices in place to ensure customer confidence.

Conclusion

It is mandatory for all authorised energy retailers to comply with the National Energy Retail Law and Rules. The AER is the regulator and as such all retailers should be aware of the contents of any and all compliance documents issued by the regulator.

Retailers should review their current billing procedures to ensure that they are compliant with the law and the requirements of the regulator.

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