2022-2023 Compliance and Enforcement Priorities of the AER

2022-2023 Compliance and Enforcement Priorities of the AER

AU Energy Compliance
The Australian Energy Regulator (AER) has published its 2022-2023 Compliance and Enforcement Priorities. The AER will continue to focus its compliance and enforcement activities on how retailers assist customers who are facing financial difficulties and those who are within embedded networks. Customers who are facing financial difficulties The AER's focus on vulnerable consumers is understandable with market conditions expected to result in higher energy costs for consumers who are already facing higher costs of living. The AER notes that: We continue to closely monitor data on consumers facing financial difficulties, including debt levels, the number of consumers on payment plans and hardship programs, and the successful completion of those plans and programs. We remain concerned by the average debt per customer upon entry into hardship programs, and the number of…
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EnergyAustralia ordered to pay a pecuniary penalty of 12 million dollars in respect of contraventions relating to customers who reside at premises where life support equipment is required.

EnergyAustralia ordered to pay a pecuniary penalty of 12 million dollars in respect of contraventions relating to customers who reside at premises where life support equipment is required.

AU Energy Compliance
On 3 June 2022, the Honourable Justice Colvin of the Federal Court of Australia published reasons for judgment in proceedings commenced by the Australian Energy Regulator against EnergyAustralia alleging numerous contraventions of provisions in the National Energy Retail Rules concerned with procedures to protect customers who depend upon electricity supply for the operation of life support equipment.  All energy retailers and exempt sellers should carefully review the reasons given by Justice Colvin and ensure that they will not repeat the mistakes made by EnergyAustralia. In commenting on the hardship provisions, Justice Colvin noted that “delay in registration deprives a customer of these important protections which obviously may have consequences that jeopardise, potentially, the life of the customer.”  The penalty that was imposed was based on the civil penalty regime at…
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Australian Energy Regulator Releases the Results of its Latest Compliance Audits Under the National Energy Retail Law

Australian Energy Regulator Releases the Results of its Latest Compliance Audits Under the National Energy Retail Law

AU Energy Compliance
The Australian Energy Regulator (AER) has published results of its audits into Alinta Energy, Simply Energy, ReAmped Energy and Powershop with a focus on compliance with hardship and disconnection obligations.  The audit results provide important information to all energy retailers as to what is expected when it comes to compliance in these key areas.  The audit assessed the adequacy and effectiveness of compliance policies, procedures and systems in a number of key areas and assigned an overall grading of either adequate and effective, partially adequate and effective, or inadequate and ineffective. Simply Energy Simply Energy’s audit results contain a total of 12 findings and 12 recommendations.  The findings included: That a training matrix recording the training provided to agents had not been maintained;That the Simply Energy hardship policy had not…
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The enforcement and penalty regime for energy sellers in Victoria

The enforcement and penalty regime for energy sellers in Victoria

AU Energy Compliance
Changes have recently been made to the enforcement and penalty regime for non-compliance with energy laws in Victoria. In this article we explain some of those key changes and their implications for energy sellers. Energy Fairness Act The Energy Legislation Amendment (Energy Fairness) Act 2021 is now in effect.  The Energy Fairness Act includes various provisions of importance for all energy retailers operating within Victoria including prohibitions on door-to-door sales, cold calling, and the use of save and win back customer retention strategies. The Energy Fairness Act introduced criminal penalties for wrongful disconnection with fines of up to one million dollars (an increase from the previous maximum of $5,000.00).  There are two tiers to the wrongful disconnection criminal penalty regime.  The first is a retailer who knowingly or recklessly arranges…
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The 2022-23 Victorian Default Offer review

The 2022-23 Victorian Default Offer review

AU Energy Compliance
Recently we wrote an article about the draft AER 2022-23 Default Market Offer.  A parallel process is taking place in Victoria, and on 15 March 2022 the Essential Services Commission (ESC) released their draft decision about the Victorian Default Offer (VDO). Submissions are open until 12 April 2022 with the release of the final decision in May, and decision to take effect from 1 July 2022.  The ESC will hold a public (online) forum for those interested on 31 March 2022. About the VDO The ESC is responsible for setting the VDO prices, which is a set independent electricity price. While the VDO’s objective is to provide a reasonably priced option, it may not always be the cheapest option.  It is useful as a reference point for consumers but they…
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The 2022-23 Default Market Offer

The 2022-23 Default Market Offer

AU Energy Compliance
The Australian Energy Regulator has published its draft Default Market Offer (DMO) 2022 to 2023 determination. Submissions on the draft DMO are open until 17 March 2022. The final decision will be published in May with changes to apply from 1 July 2022. The draft DMO reflects key structural changes occurring in the energy market with wholesale prices expected to increase in the short to medium term, coming off successive decreases in the DMO, and representative of the risk of the changing market to energy retailers. Undoubtedly, energy retailers will be looking at the draft DMO closely considering the experience of UK retailers and their own price regulation and market dynamics.   The Impact of the 2022-23 DMO The draft DMO in New South Wales for residential customers in 2022…
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Standardised Models for Regulated Metering Services

Standardised Models for Regulated Metering Services

AU Energy Compliance
The Australian Energy Regulator (AER) is developing a standardised metering services model to use in the future across all jurisdictions. The AER intends to standardise the presentation of distributors’ metering expenditure for the AER’s assessment. The outcomes sought are: Better and more transparent presentation for consumers;Unified understanding amongst distributors; andMore time-efficient processing of proposals by the AER. Currently, the AER assesses each distributors proposal for metering models individually, including their CAPEX, OPEX, revenue and pricing models. The absence of a unified collation and presentation structure results in complexities for the AER, retailers and customers. Different models with varying levels of complexity and information content are a significant barrier for retailers and consumers who engage with distributors’ proposals. A unified model is sought to provide for greater engagement of consumers and…
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Getting Serious: The Peak Demand Reduction Scheme

Getting Serious: The Peak Demand Reduction Scheme

AU Energy Compliance
The New South Wales Energy Savings Scheme (ESS) was established in 2009 under the Electricity Supply Act 1995. One of the primary purposes of the ESS is to provide incentives to install, improve or replace energy savings equipment and appliances in NSW households and businesses. The financial incentives under the scheme have been in the form of Energy Saving Certificates (ESCs), which are tradeable. When households and businesses fund energy-saving activities, they create ESCs which can be transferred to Accredited Certificate Providers (ACPs) in return for a discount on the costs of the energy saving activity. The ESCs are calculated on the basis of the megawatt hours saved by the activity. Many of us know some of the programs that have been rolled out such as light bulb replacement and…
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Automated compliance under the microscope? AER initiates proceedings against Origin in the Federal Court.

Automated compliance under the microscope? AER initiates proceedings against Origin in the Federal Court.

AU Energy Compliance
This week the AER announced that it had initiated proceedings in the Federal Court of Australia. The AER alleges systemic failures in the automated processes that Origin is using concerning customers experiencing hardship and payment difficulties, in breach of the National Energy Retail Law and Rules. The AER state that Origin has implemented systems that result in Origin making unilateral changes to customers’ payment plans, failing to consider customers’ capacity to pay when establishing or changing payment plans, and cancelling payment plans in breach of Origin’s own hardship policies. Compliance is a heavy burden for those operating in the energy sector. Combined with hardship resulting from COVID and a motivated regulator with a range of new enforcement powers, we are destined to see more and more showdowns of this nature. Lessons…
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AER’s 2021 to 2022 Compliance and Enforcement Priorities: Consumer Protection

AER’s 2021 to 2022 Compliance and Enforcement Priorities: Consumer Protection

AU Energy Compliance
#NECF, #Retailers, #ExemptOperators On 23 June 2021, the Australian Energy Regulator (AER) released five compliance and enforcement priorities for 2021 to 2022 with a major focus on protecting energy consumers. The AER Chair, Clare Savage, said that the AER will be monitoring retailers to ensure that they identify residential customers in financial difficulty and offer appropriate payment plans to those consumers who need assistance as one of the five key priorities. Commenting further, Clare Savage noted, "Throughout the COVID-19 pandemic the AER has monitored consumer debt levels as well as the number of consumers that are in retailer hardship policies or have payment plans. It is concerning to see that while debt levels have increased, the number of consumers with payment plans or existing retailer hardship programs has not." The…
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