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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The Victorian Renewable Energy Condition (embedded networks)

The Victorian Renewable Energy Condition (embedded networks)

Embedded Networks, Victorian Energy
In response to an enquiry into embedded networks in Victoria, the Victorian government gazetted the 2022 General Exemption Order with new requirements for residential embedded network. Chief among those was the 'Renewable Energy Condition' that applies to any entity operating under the VR2 exemption. Let's delve into the specifics of when this condition applies, how it operates, and the implications for compliance. Anyone who proposes to rely on the VR2 exemption must ensure that they obtain independent legal advice- noting that this article is a summary and is not intended to be an exhaustive review of relevant compliance obligations. Applicability of the Renewable Energy Condition The renewable energy condition applies to new embedded networks with 10 or more residential customers. An embedded network is a private electricity network that serves multiple premises and is…
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Obtaining Explicit Informed Consent: A Compliance Guide for Energy Retailers

Obtaining Explicit Informed Consent: A Compliance Guide for Energy Retailers

AU Energy Compliance, Victorian Energy
The Essential Services Commission's Guideline 4 on explicit informed consent requirements under the Energy Retail Code of Practice is a very useful resource for energy sellers in Victoria. This article summarises the key steps energy sellers must follow to comply with their obligations to obtain explicit informed consent from customers. What is Explicit Informed Consent? Explicit informed consent requires the customer to clearly understand the information relevant to the transaction and purpose of their consent. The retailer must: Disclose all relevant information to the customer clearly, fully and adequately in plain English Provide the information in a manner the customer can understand Give the customer the chance to ask questions and clarify any aspects they are unsure about Obtain the consent in writing, verbally or by electronic communication generated by…
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Energy Retailer under Scrutiny for Banned Door-to-Door Sales

Energy Retailer under Scrutiny for Banned Door-to-Door Sales

AU Energy Compliance, Victorian Energy
Victoria's energy regulator has accepted a court enforceable undertaking from retailer 1st Energy Pty Limited following allegations that the company violated the Statewide ban on door-to-door energy sales. The ban, which took effect in December 2021, prohibits unsolicited visits and cold calls by energy retailers and their representatives. Evidence gathered by the Essential Services Commission indicates that between January and March 2022, 1st Energy signed up 81 new customers through unsolicited home visits conducted by third-party sales agents. Agents gained entry to homes under the pretense of installing in-home energy monitoring devices, but then used the opportunity to solicit energy quotes and contracts from 1st Energy via SMS without the customers' prior consent. Commissioner Sitesh Bhojani stated there are clear rules prohibiting these types of unsolicited sales tactics. He said…
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An approach to Understanding New Regulatory Obligations

An approach to Understanding New Regulatory Obligations

AU Energy Compliance, Compliance, Consumer Data Right, Victorian Energy
Understanding new regulatory obligations can be a daunting task for any organization. It is important to be aware of all applicable laws and regulations, both federal, state, local, and internal company-instituted rules. Ignorance of the law is no excuse, so it is essential to ensure that everyone in authority is aware of the law and understands it. This is the role of compliance, to make sure people know the rules beforehand and help to ensure that they continuously follow them. To understand new regulatory obligations, there are a few key steps that organizations should take. Research The first step is to research the applicable laws and regulations. This includes researching federal, state, local, and internal company-instituted rules. It is important to be aware of all potentially applicable laws and regulations.…
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Adequate Assistance for Customers in Financial Hardship

Adequate Assistance for Customers in Financial Hardship

Victorian Energy
On 23 January 2023, the Essential Services Commission (ESC) announced that Alinta Energy Retail Sales Pty Ltd (Alinta Energy) had paid more than $380,000 in penalties after allegedly breaching energy rules that protect Victorian consumers by failing to provide adequate assistance to customers in financial hardship. Commenting on the relevant regulatory framework, ESC Chairperson,  Kate Symons said: "Energy is an essential service and businesses delivering energy must follow the rules. There is no excuse for failing to provide the help consumers are legally entitled to, especially those who may be experiencing vulnerability.” And, further: "“Placing unnecessary barriers and prolonging the time it takes for customers to receive assistance can heighten the hardship being experienced, and that’s something the commission won’t tolerate. All of these customers were actively engaging with Alinta Energy, and many…
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Disclosure obligations of energy retailers

Disclosure obligations of energy retailers

AU Energy Compliance, Victorian Energy
Today we take a fresh look at the disclosure obligations of energy retailers before or as soon as practicable after they contract with a customer (a market retail contract). Complete and accurate disclosure is important to make sure that consumers can make well-informed decisions. This means that consumers should have all the information they need to decide if the product is right for them based on their own needs. A retailer's obligations vary depending on the jurisdictions in which it operates. The National Energy Retail Rules, Retail Pricing Information Guidelines, and the ACCC's Electricity Retail Code all impose disclosure obligations on retailers marketing in NSW, QLD, SA, and the ACT. In Victoria, obligations are found within the Energy Retail Code of Practice. Rule 64 of the National Energy Retail Rules…
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White Label Retailers in Victoria

White Label Retailers in Victoria

Victorian Energy
White labelling is becoming a common practice in retail energy, where a licensee enters into an arrangement with a third party to sell energy under that third party’s branding. While this arrangement may confer on the non-licensed entity significant influence and control over the sale of electricity, it is important to ensure that the energy retail licensee is undertaking the activity of selling energy and that the non-licensed entity does not engage in activities for which they are not licensed. In Victoria, the Electricity Industry Act 2000 and Gas Industry Act 2001 require that any white-label arrangement must not result in the sale of energy without a licence or an exemption. To ensure compliance with these obligations, it is important to have detailed contractual arrangement that clearly stipulates the responsibilities…
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Electricity Price Increases in Victoria

Electricity Price Increases in Victoria

Victorian Energy
The Essential Services Commission (ESC) has released a report on electricity prices (here). The report unsurprisingly found that higher wholesale electricity costs drove recent market offer price increases. Over the 2021-22 financial year, the median electricity offer in Victoria increased by two per cent for residential customers and one per cent for small business customers. The market offer price trend over this period was broadly U-shaped, but with a sharper increase from January until September 2022. During the January to September 2022 period, the median electricity offer in Victoria increased by eight per cent for residential customers and six per cent for small business customers. Given the changes that occurred to wholesale pricing in June, we can expect further interesting analysis to arise for the July to December period. Wholesale…
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A focus on best offer messaging by Victorian retailers

A focus on best offer messaging by Victorian retailers

Victorian Energy
The Essential Services Commission (ESC) has identified a variety of potentially concerning issues with the way that certain retailers have calculated and displayed best offers; including the the prominence and placement of best offers on bills; and the frequency that these messages appear on customers’ bills. Analysis is still underway and we can expect further updates from the ESC over the coming months. Best offer obligations The best offer obligations were introduced in 2019 as part of major reforms to help customers understand and identify the best offer available to them. The obligations include the display of the amount (in dollars) that a customer could be saving on a retailer's best offer. The ESC's compliance focus The ESC started a proactive compliance monitoring project focused on best offer obligations in…
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