NERR in depth: Deemed Supply

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Under the National Energy Customer Framework there are two types of contracts: a market retail contract, being a contract that is negotiated, and a standard retail contract, in effect a default contract governing the supply of electricity where no market contract is in place. Energy may be supplied under a market retail contract or a standard retail contract. Energy may also be supplied under what is known as a deemed supply arrangement.

Deemed supply is governed by Division 9 of the National Energy Retail Law (NERL). Where a deemed supply arrangement exists, the terms and conditions of a deemed customer retail arrangement are the terms and conditions of the retailer’s standard retail contract and the prices are the retailer’s standing offer prices.

In most cases, a consumer moving into new premises will contact their retailer of choice and enter into a market retail contract. They will typically do this by reviewing available offers on energy made easy. However, from time to time a consumer will move into premises and failed to enter into a market retail contract. Where the premises are energised, i.e. already supplied with electricity, the existing supplier will remain financially responsible for that connection point despite not knowing the identity of the individual consuming electricity.

Division eight of the National Energy Retail Rules (NERR) govern steamed customer retail arrangements. Where a retailer is aware that a small consumer is consuming energy under a deemed customer retail arrangement, it must give the consumer the required information under r 53. The information to be supplied under r 53 includes:

  1. the retailer’s contact information;
  2. detail of the prices, terms and conditions applicable to the sale of energy to the premises concerned under the deemed customer retail arrangement;
  3. the customer’s options for establishing a customer retail contract (including the availability of a standing offer); and
  4. the consequences for the consumer if the consumer does not enter into a customer retail contract (whether with that retailer or another), including the entitlement of the retailer to arrange for the disconnection of the premises and details of the process for disconnection.

The information specified above does not need to be given where the consumer is a carry-over customer of the retailer and the retailer has already provided the customer with a notice under r 48 relating to a market retail contract and containing that information.

Under r 54 the financially responsible retailer for a move-in customer or carry- over customer may treat that customer as requesting the sale of energy under the retailer’s standing offer and may take all appropriate steps for the formation of a standard retail contract with the customer if the customer has provided the retailer with the customer’s name and acceptable identification and contact details for billing purposes and if the customer has not advised the retailer as to the type of customer retail contract under which the customer wishes to be supplied.

Rule 54 is inelegantly drafted. It appears to mean that where a move in customer fails to provide acceptable identification and contact details, the retailer is required to continue to rely on the standard retail contract applying by virtue of division 9 of the NERL.

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