Are you compliant with the disconnection rules?

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The Australian Energy Regulator (AER) recently released summaries of compliance audits for 2017 in relating to customer disconnection and AER reporting processes.[1] In today’s article, we look at the audit outcomes and what retailers might do to ensure they are compliant with the disconnection rules.

disconnection rules - moose head

Photo by Malte Wingen on Unsplash

By Dr Drew Donnelly, Regulatory Specialist, Compliance Quarter


Under AER’s Compliance and Procedure Guideline (the Guideline), and the National Energy Retail Rules (NERR), retailers are required to report to AER on breaches of certain NERR obligations at prescribed intervals and in a prescribed manner. At the same time the Guideline sets out the rules for when the AER may require compliance audits to be carried out. The AER required that audits be carried out by five retailers in relation to the customer disconnection rules. We set out the finding of these audits below and indicate what retailers could do in response.

Compliance reporting to the AER

Several retailers were found not to be in full compliance with reporting requirements under the Guideline. Retailers must report to AER at the following intervals:

  • Immediately, when certain retailer-initiated de-energisation and life support obligations are breached;
  • Quarterly, in relation to some de-energisation and re-energisation rules;
  • Half-yearly, in relation to explicit informed consent, customer hardship, payment plans, energy marketing activities, billing, some aspects of market retail contracts, notice on deployment of new meters and retailer interruption to supply.

Retailers need to ensure that they have the right processes in place for accurately recording breaches for reporting purposes and appropriate training for staff.

Rule 111 –De-energisation for not paying bill

Under NERR 111, a strict procedure must be followed if a customer is to be disconnected for not paying a bill. The compliance audits found that it could not always be verified that a retailer had used “best endeavours” to contact a customer after a disconnection warning notice had been sent. Similarly, in one case, there was no record as to whether customers had been offered two payment plans within the 12-month period prior to disconnection for non-payment (as required by subrule 111(2)).

Retailers must ensure that the process they follow around de-energisation is carefully recorded and recognise that ‘best endeavours’ sets a high bar for retailers. It is unlikely to be enough, for example, to send a notice electronically to the customer with no acknowledgement of receipt from the customer.

Rule 115 – De-energisation for non-notification by move-in or carry over customers

In one case, wrongful de-energisation occurred as a result of disconnection warning notices not being sent in a mailing error, as required by this rule.

Retailers should regularly test any IT systems to ensure that their system for sending disconnection notices is robust.

Rule 116 – When retailer must not arrange de-energisation

This rule sets out a range of circumstances where disconnection is not permitted. This includes when the customer has life support needs or where they have made a complaint to the relevant Ombudsman about the proposed disconnection. This rule has been partially breached in at least one case.

Retailers need to ensure that staff are appropriately trained as to when disconnection is not permitted.

If you would like us to review your policies for compliance with the disconnection rules or AER Guideline, or would like specific training with respect to the disconnection rules, please get in contact with us.

[1] See

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