Navigating the NERR: A Guide for Energy Retailers on Payment Plans for Hardship Customers

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Retailers must comply with the National Energy Retail Rules when establishing payment plans for customers experiencing financial hardship. This includes having regard to the customer’s capacity to pay, any arrears owing by the customer, and the customer’s expected energy consumption needs over the following 12 month period. A payment plan for a hardship customer must include an offer for the customer to pay for their energy consumption in advance or in arrears by instalments.

Retailers should consider adopting the AER’s Sustainable Payment Plans Framework as a good practice framework for assessing customers’ capacity to pay. When offering flexible payment options to hardship customers, retailers should consider whether debt waivers or payment matching are appropriate.

Retailers must also inform customers to whom they offer a payment plan of the duration of the plan, the amount of each instalment payable, the frequency of instalments, the date by which each instalment must be paid, and if the customer is in arrears, the number of instalments to pay the arrears. If the customer is to pay in advance, the retailer must also notify the customer of the basis on which the instalments are calculated.

Retailers must also allow hardship customers to pay using Centrepay in accordance with rule 74. If Centrepay is not available in that customer’s contract, their contract must be reviewed, a new contract made available to them and Centrepay subsequently made available. Retailers must not charge the customer for the review, for any transfer to another retail contract or any early termination charge or other penalty for the early termination of the customer’s previous retail contract.

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Test your knowledge regarding Payment Plans

What must a retailer inform a customer to whom it offers a payment plan? 

The retailer must inform the customer of the duration of the plan, the amount of each instalment payable under the plan, the frequency of instalments and the date by which each instalment must be paid, the number of instalments to pay the arrears (if the customer is in arrears) and the basis on which instalments are calculated (if the customer is to pay in advance).

What must a retailer do for hardship customers in relation to Centrepay? 

A retailer must allow hardship customers to pay using Centrepay in accordance with rule 74. If Centrepay is not available in that customer’s contract, their contract must be reviewed, a new contract made available to them and Centrepay subsequently made available. The retailer must not charge the customer for the review, for any transfer to another retail contract or any early termination charge or other penalty for the early termination of the customer’s previous customer retail contract.

Where a customer is seeking to enter into a payment plan, what is a good resource for retailers to refer to?

Retailers should refer to and also consider adopting the AER’s Sustainable Payment Plans Framework as a good practice framework for assessing customers’ capacity to pay.

Recommendations for Energy Retailers

In summary, retailers should:

  • Comply with the National Energy Retail Rules establishing payment plans for customers experiencing financial hardship
  • Consider adopting the AER’s Sustainable Payment Plans Framework as a good practice framework for assessing customers’ capacity to pay
  • Consider whether debt waivers or payment matching are appropriate
  • Inform customers of the duration of the plan, the amount of each instalment payable, the frequency of instalments, the date by which each instalment must be paid, and if the customer is in arrears, the number of instalments to pay the arrears
  • Allow hardship customers to pay using Centrepay in accordance with rule 74
  • Set out the steps they will use to identify early customers experiencing payment difficulties due to hardship, and the steps they will take to assist a customer for the duration of the time that the customer is a hardship customer

📚 Relevant citations:

  • National Energy Retail Rules – Version 35, Rule 72(1)
  • AER Customer Hardship Policy Guideline – Version 1, Cl. 44(a)
  • National Energy Retail Rules – Version 35, Rule 72(2)
  • AER Customer Hardship Policy Guideline – Version 1, Cl. 44(b)
  • National Energy Retail Law (Schedule of NERL SA Act), Section 50

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