Guide to the National Energy Retail Rules

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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 range of matters relating to the retailer-customer relationship, including:

  1. Customer Retail Contracts (Part 2)
    The NERR specify model terms and conditions for standard retail contracts between small customers and retailers (Rule 12). They also set out requirements for the formation, content, and termination of market retail contracts (Rules 14-49B).
  2. Customer Hardship (Part 3)
    Retailers must have customer hardship policies approved by the Australian Energy Regulator (AER) that meet minimum requirements around processes, discounted payment plans, and communication with customers experiencing payment difficulties (Rules 71, 72, 75B).
  3. Payment and Billing (Part 2, Division 4)
    The rules stipulate requirements around the basis for calculating bills (Rule 20), bill information and format (Rule 25), payment methods (Rule 32), frequency of bills (Rule 24), and processes for over/undercharging (Rules 30-31) and payment difficulties (Rule 33).
  4. De-energization (Disconnection) (Part 6)
    The NERR restrict when retailers can arrange for disconnection of small customers for non-payment and set out notice requirements (Rules 111-115). Disconnections are prohibited in certain circumstances, such as for customers on hardship programs (Rule 116).
  5. Life Support Equipment (Part 7)
    Strict protections apply for customers who require life support equipment, including obligations on retailers and distributors around registration (Rule 124), notifications (Rule 124B), and prohibitions on de-energization (Rule 124B(1)(c)).
  6. Customers Affected by Family Violence (Part 3A)
    Model terms for retail contracts require retailers to have a family violence policy that sets out how they will assist affected customers (Rule 76A). The rules specify requirements for distributor/retailer communications with these customers (Rules 76C, 76H).
  7. Energy Marketing (Part 2, Division 10)
    The NERR regulate the marketing activities of retail marketers, including a requirement for explicit informed consent (Rule 57(1)(a)), compliance with no contact lists (Rule 65), and record keeping (Rule 68).
  8. Relationship Between Distributors and Customers (Part 4)
    The rules cover the respective rights and obligations of distributors and customers under deemed standard connection contracts (Division 3), new connections (Division 2), interruptions to supply (Division 6), and other interactions.
  9. Retailer of Last Resort (RoLR) Scheme (Part 6, Rule 122)
    If a retailer fails, the NERR facilitate the transfer of their customers to other retailers to ensure continuity of supply (Rule 122).

Implications for Energy Retailers

The NERR have significant implications for energy retailers operating in the National Energy Customer Framework jurisdictions. Retailers need to ensure their contracts, policies, systems and processes comply with the relevant requirements. Failure to do so can result in penalties.

Key retailer responsibilities include:

  • Obtaining explicit informed consent before entering a customer into a market contract (Rule 57(1)(a))
  • Providing the required information to customers before and after contract formation (Rules 19, 64)
  • Following prescribed processes for billing, payment plans, disconnection and reconnection (Rules 20, 33, 111-122)
  • Having AER-approved standard contracts and hardship policies and complying with their terms (Rules 12, 75B)
  • Meeting stringent requirements for registering and protecting customers with life support equipment (Rule 124)
  • Implementing family violence policies to assist affected customers (Rule 76A)
  • Facilitating customer transfers, including under RoLR arrangements (Rules 57, 122)
  • Cooperating with distributors around customer requests, de-energization and re-energization (Part 5)

Ongoing Developments


The NERR continue to evolve, with amendments being made periodically. Recent and upcoming changes include:

  • Stronger protections for affected customers related to family violence policies (May 2023)
  • New bill content and billing guideline requirements (by September 2023) (Rules 25, 25A)
  • Rules enabling distributor notifications and publications related to changes in gas type supplied (March 2024) (Rules 147C-147F)
  • Alignment with updated National Energy Objectives in the NERL around emissions reduction (July 2024)

Conclusion


In summary, the National Energy Retail Rules establish a comprehensive framework regulating the interactions and responsibilities of energy retailers with their customers. While promoting consumer protections and empowering customer choice, the NERR also impose substantial compliance obligations on retailers that affect all aspects of their operations. Ongoing engagement with the development of the NERR and proactive implementation of required policies and processes is essential for energy retailers.

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