The Australian Energy Regulator’s Compliance Procedures and Guidelines-Version 6 sets out the matter and form that retailers must submit compliance information and data to the AER. Retailers are required to submit information relating to their compliance with the National Energy Retail Law, National Energy Retail Rules, and National Energy Retail Regulations.
Polices, systems and procedures
The Retail Law requires that regulated entities establish and observe policies, systems, and procedures in accordance with the AER Compliance Procedures and Guidelines. Pursuant to the guideline, retailers must ensure that they are able to report accurately on their compliance in the manner and form required by the guidelines. Policies, systems and procedures must be established and operate in a manner and form consistent with the relevant Australian Standard AS/ISO 19600-Compliance Management Systems.
One of the key functions of the AER Compliance Procedures and Guidelines is to set out the process of reporting a breach or potential breach of an obligation. The AER notes that when identifying a breach or potential breach of an obligation, a regulated entity should interpret that obligation with regard to any provision in jurisdictional legislation that may alter, vary, or remove the application of that provision to the regulated entity operating in that jurisdiction.
Information gathering power
Pursuant to Section 206 of the Retail Law, the AER has powers to obtain information from regulated entities. The AER is able to obtain information and documents where it has reason to believe that a person or regulated entity is capable of providing information or producing a document that the AER requires for the performance or exercise of a functional power it has under the Retail Law, Retail Rules, or Retail Regulations. Where the AER uses its compulsory information gathering powers, it will issue a notice to the person or regulated entity and criminal penalties apply for a failure to comply with such a notice where the person providing information knows that it is false or misleading.
The obligations to which reporting requirements apply are listed in Appendix A of the AER’s Compliance Procedures and Guidelines. These are separated into Immediately Reportable Breaches, Quarterly Reports, and Half Yearly Reports.
All breaches of obligations contained in Table 1 and 2 of Appendix A.1 to the AER’s guidelines must initially be reported to the AER no later than two business days after the breach has been identified by the regulated entity. Upon receipt of an initial report, the AER will advise whether further information is required, including whether a regulated entity should submit their final report within 20 business days after the initial report.
The types of breaches that are reportable immediately include those related to retailer-initiated de-energisation of premises for small customers, life support-related obligations, and obligations relating to prepaid meters including breaches of Rules 107(2), 116(1), 124(1), 124A, 124B(1), 125(1) and Rule 139(2). This list is not exhaustive and retailers should consult with the relevant guidelines at the time that they are considering a potential breach.
Immediate reports should be submitted by email to the email address listed in the AER Compliance Procedures and Guidelines with the specified subject line.
Quarterly reports are to be submitted for each quarter on 31 October, 28 February, 30 April, and 31 August of each year for the prior quarter. Quarterly reports must set out any breaches of the obligations set in Tables 3 and 4 of Appendix A.2. These obligations include those related to retailer-initiated disconnection of premises to small customers, the obligation on retailers to arrange re-energization of premises, and explicit informed consent including but not limited to Sections 38 and 40 of the National Energy Retail Law and Rules 46A, 57(1)(a) and 57A of the National Energy Retail Rules. Quarterly reports must be submitted using the template provided by the AER on its website via email again using the subject line specified in the AER Compliance Procedures and Guidelines.
Breaches of those obligations listed in Table 5 and 6 of Appendix 8.3 must be submitted to the AER on a half-yearly basis. The reporting deadlines that apply are 28 February and 31 August in each year for the prior period. The types of breaches that must be reported in half-yearly reports include those related to customer hardship, payment plans, energy marketing activities, customer retail contracts and billing, market contracts, notices to small customers on deployment of new electricity meters, and retailer interruption to supply. Half-yearly reports must be submitted in the same manner as quarterly performance reports via email.
Where a retailer does not identify any reportable breaches for the relevant quarterly or half-yearly period, it must still submit annual report using the template provided by the Australian Energy Regulator.
When considering reporting obligations and the AER’s Compliance Procedures and Guidelines, there are a number of important considerations that all retailers should examine. These include the method of collation of potential breaches and their processes followed to identify whether a breach has occurred and to collect the information required to submit a report to the regulator.
When looking at processes to identify potential breaches, retailers may wish to consider ongoing internal audit of different areas of their business, review of customer complaints received, and review of customer contact notes. Such a review should be conducted by individuals who have an advanced understanding of the regulatory obligations. Such internal reviews may identify non-compliances which must be reported to the Australian Energy Regulator.
Retailers may also wish to consider automated means of identifying potential breaches, such as the use of natural language processing to identify phone conversations or customer notes where a potential breach is present or discussed. Such automated means can provide an additional layer of security above and beyond traditional means.
Retailers must ensure that they train all staff on regulatory obligations so that any staff member is equipped to identify a potential compliance breach that can then be escalated to the appropriate individuals for a proper assessment. Training should be documented and retailers should ensure that training is delivered on an ongoing basis. The ongoing delivery of training will ensure that staff continue to recall regulatory obligations so that they are equipped to identify potential non-compliances.
Retailers should establish standard methods by which potential non-compliances can be reported by internal staff such as by way of specific email addresses or intranet forms.