In the mid-year compliance and enforcement update, the AER demonstrated that there has and will be a tighter focus on the compliance of retailers and distributors.
Between July and December of 2020, a total of $4.38 million was paid in penalties, of which $3.8 million was paid as a result of court decisions and $580,000 as a consequence of direct infringement notices.
Prioritites
The AER has clearly stated their enforcement priorities for 2020-2021.
These are:
- Financial difficulties and hardship
- Life support equipment
- Supporting transition to metering contestability
- Ensuring provision of accurate and timely information to the AER and AEMO
Wrongful disconnection for customers facing financial difficulties or hardship
The AER reinforced their position that customers in financial difficulty must not be disconnected and must be offered access to affordable payment plans and hardship programs.
EnergyAustralia wrongfully disconnected eight customers in financial hardship and failed to offer further legal protections or payment plans to the customers. As a result, EnergyAustralia was required to pay penalties of $1.5million.
Origin Energy was required to pay $120,000 in penalties after an IT system failure resulted in the disconnection of customers who had an outstanding bill. AGL paid $100,000 penalties and was required to undergo an intendent audit after disconnecting customers with payment difficulties.
Protection of customers using life support equipment
The AER is consistent in enforcing the National Energy Retail Rules, and the responsibility of retailers and distributors in supporting vulnerable customers relying on power supply for life support equipment.
Alinta Energy paid a total of $200,000 in penalties. Non-compliance in the case of Alinta Energy included failure to:
- Register customers premises after being notified of the need for life support;
- Provide information to registered customers within 5 days;
- Notifying customers distributors about customers requiring life support equipment; and
- Provide notice before deregistering customers.
The Alinta Energy incident highlights the importance for retailers and distributors to identify customers relying on life support equipment early on and have appropriate compliance processes in place.
Supporting transition to metering contestability
There are two areas the AER is focusing on to ensure the transition to metering contestability.
First, in July 2020 the AER published guidance on metering installation timeframes to enable compliance with the new rules around metering installations with shared fusing. Second, the National Electricity Rules prescribe timeframes for metering coordinators to complete testing of instrument transformers.
The AER pointed out that it continues to work closely with metering coordinators to ensure that testing for sites is done in accordance with the regulations.
Ensuring provision of accurate and timely information to the AER and AEMO
In a landmark case for electricity generators, the Federal Court ordered Snowtown Wind Farm Stage 2 to pay $1 million in penalties for failing to provide critical information to AEMO. It was the first case the AER brought against windfarm operators and should remind generators of the importance of complying with the Generator Performance Standards agreed with AEMO.
Find more information on the AER’s mid-year compliance and enforcement update here.
