Australian Energy Regulator (AER) Chair Clare Savage recently outlined the regulator’s consumer protection priorities for 2023-2024 during her address at the 2023 Australian Energy Week conference. Savage acknowledged the challenging times facing the energy sector with the twin themes of the accelerating energy transition and increasing cost of living pressures affecting consumers.
Savage emphasised the AER’s role in protecting consumers through compliance and enforcement actions against energy companies that fail to meet their obligations. Savage noted that maximum penalties for breaching energy laws have increased substantially, with the largest penalty imposed in 2022 totalling $17 million compared to $1.5 million previously. Over the past two years, total AER issued penalties have amounted to over $39 million, a significant increase from just $3.5 million over the previous 14 years. According to Savage, “Compliance failures in the energy sector can no longer be dismissed as a cost of doing business.”
The AER’s first priority is improving outcomes for vulnerable customers, including better access to hardship programs and payment plans. Savage pointed to issues identified with some retailer’s hardship policies and practices as well as metrics indicating hardship program customers are becoming worse off. The AER will focus on ensuring all eligible customers can access protections they are entitled to.
The second priority is making it easier for customers to understand their plans and engage in the market. This includes a focus on billing and pricing information obligations, especially compliance with the AER’s Better Bills Guideline coming into effect in September 2023. The AER received over 200,000 reports of customers affected by billing related breaches in the past year, making up half of all referrals received.
The third priority is supporting power system security and an efficient wholesale electricity market. The AER will investigate conduct that contributes to major market events, monitor generator compliance programs, and take action against those failing to provide contingency frequency control ancillary services when required.
The fourth priority is improving compliance with performance standards and standards for critical infrastructure. Failing to meet performance standards can exacerbate market events and blackouts. The AER recently issued Stanwell Corporation with infringement notices totalling over $263,000 for allegedly applying incorrect generator performance standards.
The final priority is clarifying and monitoring compliance with new gas reporting requirements under the Gas Market Transparency Measures. The AER has focused on ensuring accurate and timely reporting of gas auctions, demand forecasts and will now monitor compliance with the new measures covering gas reserves, LNG exports, large user demand and short-term domestic gas sales reporting. Accurate reporting is critical for the efficient operation of gas markets.
In summary, Savage outlined how the AER’s compliance and enforcement priorities for 2023-2024 aim to deliver secure and efficient energy systems that protect consumers during a challenging time of transition. The priorities span wholesale and retail electricity and gas markets with a focus on vulnerable customers, understandable energy plans, reliable energy supply, compliant critical infrastructure and transparent gas markets. Overall, the AER remains committed to working with industry to help them meet obligations and achieve good outcomes for consumers.