The proposed new dispute resolution obligations for exempt sellers

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We recently summarised the changes proposed in the new draft retail exempt selling guideline (the draft guideline) issued by the Australian Energy Regulator ( By far the most significant change proposed is to the dispute resolution obligations of exempt sellers with respect to residential customers. In this piece, we take a deeper look at the dispute resolution changes for exempt sellers as proposed in the latest draft guideline.

dispute resolution exempt sellers


The National Energy Retail Law (Retail Law) requires all energy sellers to either hold a retailer authorisation or a valid exemption. A common situation where an exemption may apply is where an owner purchases energy from a retailer and then ‘on-sells’ that energy to tenants. That owner, if granted an exemption would be an ‘exempt seller’.

Guidelines, such as the draft guideline, are developed by the Australian Energy Regulator (AER) and describe how to apply for and obtain individual and registrable exemptions, the factors that the AER will consider in assessing applications, and the exemption conditions that apply.

Existing dispute resolution obligations

Section 114(1)(c) of the Retail Law provides that ‘exempt customers should, as far as practicable, not be denied customer protections afforded to retail customers under this Law and the Rules’. A key consumer protection for customers under the retail law is access to dispute resolution mechanisms (both internal or external).

The current exemption framework does not require robust internal dispute resolution processes across the board. It only requires that these processes are in place for a ‘retrofit’ exemption.[1]

Similarly, the current exemption framework does not require that customers have access to external dispute resolution such as Ombudsmen schemes. Rather the current framework requires that exempt sellers inform customers if they can access a scheme, both at the commencement of the legal relationship with the customer (see condition 2) and in the event of a dispute (see condition 15).

Proposed new dispute resolution obligations

The draft guideline adds three additional requirements with respect to dispute resolution for residential customers.

The application of the new requirements to exempt sellers serving residential customers, rather than all exempt sellers, aims to recognise the particular power imbalance that can exist between residential customers and their on-seller.

The draft guideline provides that for these customers:

  • an exempt seller must apply an internal complaints procedure consistent with the Australian Standard AS/NZS 10002:2014 Customer Satisfaction – Guidelines for complaints handling in organisations (see new condition 16(2));
  • the exempt seller must, if subject to an ombudsman scheme, inform the customer of the ombudsman’s contact details in the event of a dispute (see new condition 16(3));
  • The exempt seller must be a member of, or subject to, a relevant energy ombudsman scheme, and comply with the requirements of that scheme, where they are able to do so (see new condition 17).

The exempt seller is only required to be a member of, or subject to, an Ombudsman scheme, where they are able to as the regulatory frameworks for some Ombudsman schemes do not currently permit an exempt seller to be subject to that scheme. Ombudsman schemes may need to amend their charters, constitutions or constituting legislation to allow exempt sellers to be participants in their schemes.

AER seeks your feedback on these draft guidelines by 19 December. Go to


[1] Retrofitting is the conversion of an existing site’s electrical wiring into an embedded network that allows the owner or operator of the site to sell electricity directly to the residents or tenants of the site.

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