Automated compliance under the microscope? AER initiates proceedings against Origin in the Federal Court.

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This week the AER announced that it had initiated proceedings in the Federal Court of Australia. The AER alleges systemic failures in the automated processes that Origin is using concerning customers experiencing hardship and payment difficulties, in breach of the National Energy Retail Law and Rules.

The AER state that Origin has implemented systems that result in Origin making unilateral changes to customers’ payment plans, failing to consider customers’ capacity to pay when establishing or changing payment plans, and cancelling payment plans in breach of Origin’s own hardship policies.

Compliance is a heavy burden for those operating in the energy sector. Combined with hardship resulting from COVID and a motivated regulator with a range of new enforcement powers, we are destined to see more and more showdowns of this nature.

Lessons

The key lessons for energy sellers from this announcement include:

  • the need to carefully examine all aspects of processes from a compliance lens; and
  • the need to ensure that payment arrangements have regard to a customer’s capacity to pay and are set out in a manner compliant with applicable laws;
  • there has never been a more important time for energy sellers to examine their hardship policies, practises, and processes.

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Getting Serious: The Peak Demand Reduction Scheme

The First PDR Initiatives:
– There will be incentives (rebates) for households to purchase and install energy efficient air conditioners (rebates for businesses ACs have been available for some time via other schemes);
– Businesses with EV fleets will be able to export power from their parked vehicles back in to the grid at peak times.

The two initiatives above were cited as examples in the press release on 28 September 2021. There is very little information available as to what other initiatives will be forthcoming.

When there is a lot of energy

Alinta Energy improves systems and waives more than $1 million in customer debt following an AER investigation.

On 8 October 2021, the Australian Energy Regulator (AER) announced that, in response to an investigation, Alinta Energy have substantially improved its systems and was waiving more than $1 million in energy debt owed by more than 400 of its customers.  The outcome arose as a result of an investigation carried out by the AER into alleged non-compliance with Alinta Energy’s obligations with respect to vulnerable customers and its hardship program. The AER was concerned that during the period September 2019

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