Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

AU Energy Compliance
On 11 April 2024, Compliance Quarter put forward its submission on proposed changes to the AER Compliance Procedures and Guidelines. The AER is reviewing its Compliance procedures and guidelines, which set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law must submit compliance information and data to the AER. We argue that there should be consideration of measures to incentivise early reporting of potential breaches. These may, for example, take the form of firm discounts to the maximum civil penalty that can result from non-compliance. Clearly, it is the obligation of entitles to comply and to report however as in other spheres, incentives make a difference and can influence behaviour. While changes would be required at the legislative level, we argue…
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Obligations of Energy Retailers Regarding Best Offer Information

Obligations of Energy Retailers Regarding Best Offer Information

AU Energy Compliance, Victorian Energy
Energy retailers in Victoria have specific obligations under the Energy Retail Code of Practice to provide clear information to customers about their 'best offer' - that is, the plan that would minimize the customer's energy costs based on their usage history. The objective is to ensure small customers can easily understand whether they are on the retailer's best plan for them and how to access the retailer's best offer if not. One of the significant challenges in the energy sector (as in banking and elsewhere) is that customers who sign up to offers do not necessarily shop around and end up paying more than they could pay elsewhere or even on a different product with the same provider. The 'best offer obligations' was an attempt to address this. This article is intended as a summary of the Victorian…
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Guide to the National Energy Retail Rules

Guide to the National Energy Retail Rules

AU Energy Compliance
The National Energy Retail Rules (NERR) are a set of rules that govern the sale and supply of electricity and gas by retailers to consumers in Australia, alongside the related National Energy Retail Law (NERL). The NERR came into effect on 1 July 2012 in Tasmania, the Australian Capital Territory, and the Commonwealth. South Australia followed on 1 February 2013, New South Wales on 1 July 2013, and Queensland on 1 July 2015. The NERR do not yet apply in Victoria, Western Australia, or the Northern Territory. Purpose and Scope The purpose of the NERR is to promote efficiency and competition in retail energy markets, ensure appropriate consumer protections, support informed customer choice, and regulate the processes for customer interactions with energy retailers and distributors. The NERR cover a wide…
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How to Manage Multiple Compliance Deadlines: A Case Study

How to Manage Multiple Compliance Deadlines: A Case Study

AU Energy Compliance, NT Energy Compliance
Compliance managers in the energy sector are constantly juggling a large work load with competing deadlines. Managing time effectively is a core skill for compliance managers. In this article, we will present a hypothetical case study of a compliance manager in an energy retailer who has to juggle multiple compliance tasks and deadlines, and how they can use some strategies and tools to manage their workload and prioritise effectively. We will also share some insights and tips from Compliance Quarter, a consultancy that helps energy businesses with regulatory compliance. The Case Study Meet Alice, a compliance manager in a medium-sized energy retailer that operates in several states and territories. Alice is responsible for ensuring that the retailer complies with the relevant laws, rules, codes, and standards that apply to its…
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How to Choose a New Billing System for Energy Retailers

How to Choose a New Billing System for Energy Retailers

AU Energy Compliance, Compliance, NT Energy Compliance, NZ Energy Compliance
Billing is a vital part of the energy retail business. It involves calculating and collecting the charges for the energy services provided to the customers, as well as complying with the regulatory obligations and reporting requirements of the energy market. A good billing system can help the energy retailer to improve its operational efficiency, customer satisfaction, and competitive edge. However, many energy retailers are struggling with their existing billing systems, which may be outdated, unreliable, or inadequate for the changing needs and expectations of the market. Some of the common problems that energy retailers face with their billing systems are: Lack of flexibility and functionality. The billing system may not be able to handle the complexity and diversity of the energy products and services, such as time-of-use tariffs, demand response…
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AER hardship review concludes there is room for improvement

AER hardship review concludes there is room for improvement

AU Energy Compliance, Compliance
Introduction The Australian Energy Regulator (AER) conducted a comprehensive hardship compliance review of several energy retailers, assessing their adherence to obligations towards customers facing financial hardship under the National Energy Retail Law and the National Energy Retail Rules. AER powers The AER, under section 206 of the National Energy Retail Law, holds the authority to issue compulsory notices to energy retailers. This review was a key project under the AER's 2022-23 Compliance and Enforcement Priority. Key findings of the review Identifying hardship customers: Some retailers were found to inadequately identify customers experiencing payment difficulties, with an over-reliance on customers to self-identify. In contrast, other retailers had proactive systems to identify and support such customers effectively. Informing customers of hardship policies: There was variable compliance in informing customers about the retailer’s…
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How to Build an Effective Energy Retailer Compliance Program

How to Build an Effective Energy Retailer Compliance Program

AU Energy Compliance, Compliance, NT Energy Compliance
It is very difficult for energy retailers who are operating independently of one another to understand what an effective compliance management program is. Typically, the only feedback that they receive is from regulators when something goes wrong i.e. when there is a breach that they are required to report on, and they subsequently go through an investigation and enforcement process. Regulators themselves do not fully understand the compliance function’s roles and responsibilities- they typically see the tail end, what goes wrong, and not the work that goes in to avoiding non-compliance. Compliance Quarter has the advantage of having worked with a number of energy retailers and as a result is in a unique position in being able to explain what an effective compliance program looks like. So, what are some…
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Identification of Customers Affected by Hardship: Rules and Steps for Retailers

Identification of Customers Affected by Hardship: Rules and Steps for Retailers

AU Energy Compliance
In the retail sector, particularly within the energy market, identifying customers experiencing hardship and providing appropriate assistance is not only social obligation but also a regulatory requirement. This article outlines the specific rules that apply generally to retailers and the steps they should take to assist customers facing hardship, as stipulated by the National Energy Retail Rules Version. Understanding Hardship in the Retail Context A retailer's customer hardship policy must include a clear description of the process for assessing the eligibility of a customer for its hardship program. This process is crucial as it determines which customers are in need of assistance. A challenge that is faced by consumers is the understandability of a retailer's hardship policy. Such policies seek to translate complex regulatory obligations into language that can be understood and…
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Virtual Power Plants: Reshaping Energy Markets and Empowering Consumers

Virtual Power Plants: Reshaping Energy Markets and Empowering Consumers

AU Energy Compliance, Consumer, NT Energy Compliance
The traditional electricity grid is undergoing a fundamental shift as distributed energy resources (DERs) like solar panels, batteries, and smart appliances proliferate. Virtual Power Plants (VPPs) are at the forefront of this transformation. A VPP is a cloud-based network that intelligently links DERs, allowing them to collectively function as a distributed power plant This can provide crucial grid services like frequency regulation and voltage support [1]. How Do VPPs Impact Customers? VPPs open up new possibilities for customers both on an individual basis and collectively. Potential Cost Savings: VPPs allow customers to earn payments for making their energy resources accessible during peak times. This reduces reliance on costly fossil-fuel 'peaker plants', potentially lowering overall electricity bills [2]. Resilience and Reliability: VPPs can dispatch backup power from DERs during outages, improving grid resilience for customers [2].…
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The Shifting Sands of Compliance: Top 5 Risks Australian Businesses Must Navigate in 2024

The Shifting Sands of Compliance: Top 5 Risks Australian Businesses Must Navigate in 2024

AU Energy Compliance, Compliance
The compliance landscape in Australia is anything but static. Like quicksand, regulations, expectations, and business practices evolve rapidly, making it essential for businesses to remain vigilant if they want to avoid sinking into costly fines, reputational damage, or worse. While the specific challenges will vary by industry, here's a breakdown of the top 5 areas where compliance risks lurk in 2024, ready to trip up those who aren't prepared: 1. Cybersecurity: The Never-Ending Battle Cybersecurity threats aren't just a nuisance; they're a real and growing danger facing every business that stores even a shred of customer or company data. The high-profile breaches of Optus (https://www.optus.com.au/about/media-centre/media-releases/2022/09/optus-notifies-customers-of-cyberattack) and Medibank in 2022 served as stark reminders of the severe consequences of this evolving threat. In 2024, the pressure to tighten data security and…
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