The Essential Services Commission of Victoria 2020-2021 Compliance and Enforcement Objectives

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The Essential Services Commission of Victoria (ESC) has released its Compliance and Enforcement Objectives for 2020 to 2021. We examine those objectives below.

All Eastern States, other than Victoria, have adopted the National Energy Customer Framework and are regulated by the Australian Energy Regulator.  You can view our article on the AER’s compliance and enforcement objectives here.

The 2020-2021 Priorities

The ESC notes that the objectives represent priorities for compliance but do not reduce the need for retailers to ensure compliance with all regulatory obligations. The 2020 to 2021 objectives are to ensure:

  • customers experiencing vulnerability are protected from disconnection and accumulating debt;
  • customers affected by family violence are treated with respect and not subject to actions within the control of energy businesses that may endanger them;
  • energy businesses are deterred from disconnecting customers when they were not entitled to, or if they have not followed the relevant rules;
  • when businesses break the rules that regulate the market, they are held to account; and
  • The ESC are informed of the current state of the market.

The Essential Services Commission has stated that they will focus on:

  • payment difficulty framework;
  • family violence protections;
  • wrongful disconnections of customers;
  • planned interruptions, especially affecting customers with life support equipment;
  • the transfer of customers without explicit informed consent;
  • overcharging of vulnerable customers, especially affecting those on concession entitlements or in payment difficulty; and
  • embedded networks.

Both leading and lagging

In our view, Victoria is leading the way when it comes to the protections in place in relation to family violence and it is likely that the AER will adopt similar measures. Family violence is clearly an area that needs focus. Energy retailers have the potential to add to harm to family violence survivors and, in our view, the ESC have done an excellent job when it comes to explaining energy retailer’s responsibilities in this area. 

Victoria (specifically the Victorian government) is lagging when it comes to the regulation of embedded networks given substantial time and effort invested in this area by the Australian Energy Market Commission. Rather than build on the work completed by the AEMC, a framework that was in many ways consistent with the framework that will be replaced in NECF was recently implemented. Victoria has taken much longer to come to the realisation that embedded networks are becoming a substantial component of the Australian Electricity Market.

Overcharging of vulnerable customers is, in our experience having worked for some of the country’s largest energy retailers, rare. The rules are clear about what a retailer must do when they have overcharged a customer. This being so, retailers, continue to have issues when it comes to their billing systems and those issues often translate into unacceptable consumer outcomes.

The ESC’s approach

The ESC notes that it takes a multifaceted approach when promoting customer protections under the energy rules. The ESC seeks to help customers and energy businesses understand their rights and obligations through education including via advertising, social and traditional media, its website and engagement with consumer advocacy groups. 

The ESC monitors the energy industry to detect breaches of the rules and to identify any gaps in the rules. The ESC operates an annual audit program to check whether energy businesses have appropriate processes and policies in place to comply with the energy rules. When the ESC becomes aware of a potential breach, they may investigate and take enforcement action.  

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