On 31 March 2022, the Australian Energy Regulator (AER) published the Better Bills Guideline. The Guideline creates binding and enforceable obligations on energy retailers in respect of their preparation and issuance of energy bills for small customers. This article summarises some of the key obligations of the Guideline. For detailed instructions on how to implement and comply with the Guideline, please get in touch.
From 4 August 2022, Subrule 25(1) of the National Energy Retail Rules will require energy retailers, in preparing and issuing bills to small customers, to comply with the Better Bills Guideline. The Guideline allows energy retailers to implement the new billing requirements as set out in Parts 3 and 4 over a transitional period. Retailers can choose to continue to comply with the bill content requirements in force before 4 August 2022 until the end of 30 March 2023. Alternatively, retailers may elect to comply with the new billing requirements set out in Parts 3 and 4 of the Better Bills Guideline at any time prior to 31 March 2023. By 31 March 2023, all retailers must comply with Parts 3 and 4 of the Better Bills Guideline in preparing and issuing bills to small customers.
By way of summary, the Better Bills Guideline sets out a set of design principles which must be applied holistically when preparing bills and a tiered approach to billing information where Tier 1 information must appear on the first page of a paginated bill and at the beginning of a non-paginated bill and Tier 2 information must be included in a bill but not on the first page of a paginated bill or at the beginning of an unpaginated bill. Finally, additional information can be included in bills but not ahead of Tier 2 information on a paginated or unpaginated bill.
If a retailer elects to comply with Parts 3 and 4 of the Better Bills Guideline prior to 31 March 2023, the retailer must notify the AER of its intention to do so by email sent to AER (email@example.com). A notice given by a retailer in accordance with that obligation must specify the day upon which the retailer will begin preparing and issuing bills to small customers in accordance with Parts 3 and 4 of the Better Bills Guideline.
The Better Bills Guideline will not apply to a business customer that is a carry-over customer as defined in Section 2 of the Retail Law, where the previously current customer retail contract for the premises of that business customer was in agreement under Rule 5 of the National Energy Retail Rules for aggregation of the consumption at two or more business premises.
Best offer checks
The Better Bills Guideline introduces obligations in relation to better offers and deemed better offer check. This is comparable to similar provisions found within Victoria. Retailers will need to carefully review these requirements to ensure that they can comply. Relevant requirements are found within Part 4 of the AER’s Better Bills Guideline.
Before issuing a bill to a small customer, a retailer must carry out a deemed better offer check for that customer and identify the relevant deemed better offer for that customer in accordance with Part 4.
The deemed better offer must be either:
- the plan that the retailer offers which is the lowest cost generally available to the customer having regard to the customer’s annual usage history and without a pre-condition or condition that the customer have or maintain an affiliation or membership with an entity that is unrelated to the retailer, or
- a plan that has a lower cost than the lowest cost generally available plan applicable to the customer.
When the customer is a party to a customer retail contract that provides a discount on condition that the customer buys another good or service, the deemed better offer identified in accordance with paragraph 46 must be determined without any such discount.
Pursuant to paragraph 48, a retailer must carry out a deemed better offer check using the following formula: deemed best offer check results = annual total cost of current plan – annual total cost of deemed better offer. If the deemed better offer check result is greater than $22.00 inclusive of GST, the deemed better offer check is negative. If the deemed better offer check result is less than or equal to $22.00 inclusive of GST, the deemed better offer check result is positive.
The transitional period allows retailers to make the substantial adjustments to their billing systems and bill templates required to comply with the Guideline. Any retailer who chooses to comply during the transitional period could be considered to be at a potential disadvantage in being required to direct consumers to consider switching. The implementation costs will be substantial and they will ultimately be paid by consumers.
On the other hand, informed consumers make the energy market better for all involved. One hopes that this Guideline’s costs of implementation will be outweighed by the increased competition and switching that results.
It is unclear why the Guideline requires the inclusion of the words “The Australian Energy Regulator requires us to include this information.” This does not serve consumers and takes up valuable ‘real estate’ on energy bills.
It is also unclear why there is a requirement to direct consumers to Energy Made Easy (for the second time) where a customer is on a retailer’s best offer. This disincentivises retailers from ensuring that their customers are on the best offer available.
The best offer check and message come from the Victorian regulatory regime and are perfect examples of how heavily regulated energy retail is in comparison with any other industry in the country. For example, a bank is not required to ensure you are on the best mortgage, a shopping centre is not required to direct you to a comparator website when you buy milk, and a telco is not required to include any similar messaging in their bills. Energy, however, is an essential service, and as we develop the energy regulatory framework we need to carefully balance the costs of regulation with the potential benefit it will achieve.