The new Retail Exempt Selling Guideline

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The Australian Energy Regulator (AER) has published the Retail Exempt Selling Guideline (Version 6).

The Guideline includes a copy of newly established documents:

  1. A factsheet: how to access an authorised retailer of your choice if you live in an embedded network; and
  2. Exempt Seller Hardship Policy template.

The new Retail Exempt Seller Guideline should be reviewed in detailed by all exempt sellers operating in NECF jurisdiction which includes NSW, QLD, ACT, TAS and SA. The Guideline was developed as part of the AER’s review into the Retail and Network Exemption Guidelines. The AER has decided to defer release of the draft Network Service Exemption Guideline (Version 7) while further changes are made to streamline and simplify the document. It is anticipated that the revised Network Service Provider Exemption Guideline will be published in August 2022. The new Retail Exempt Seller Guideline takes effect from 15 July 2022.

Exempt Customer Hardship

Looking firstly at the Exempt Seller Hardship Policy template, exempt sellers are now provided with a template policy that they should use in setting out the assistance that they will provide to customers who are experiencing financial hardship. Financial hardship may result from factors such as a death in the family, health or sudden illness, family violence, unemployment, and reduced income.

The hardship policy template explains, in plain English, what an exempt seller will do in the circumstance of customer hardship, what payment obligations apply, and what other support the exempt seller offers to assist customers who are experiencing financial hardship. An exempt seller is required to offer assistance if they are told by customer that the customer is having trouble paying a bill or if the exempt customer is referred to the exempt seller by a financial counsellor or other community worker. Exempt sellers must take into account all of the customer’s circumstance and, having regard to those circumstances, act fairly and reasonably.

When a customer is identified as being in hardship and covered by the exempt seller hardship policy, an exempt seller must offer their customer a payment plan. In making a payment plan, an exempt seller must consider how much the customer can pay, how much the customer owes and how much energy the exempt seller expects the exempt customer to use in the next 12 months or for the duration of the exempt customer’s tenancy if the tenancy agreement is less than 12 months.

Customer’s capacity to pay

It is critical that exempt sellers carefully consider the customer’s capacity to pay when formulating a payment plan. It would be a breach for an exempt seller to establish a payment plan with an exempt customer not having regard to the customer’s capacity to pay. Once the exempt seller agrees on a payment plan with a customer, the exempt seller must send the customer information including the length of the payment plan, the amount on each payment, how many payments will need to be made, when each payment must be made, and how the exempt seller worked out the payments.

If the customer misses a payment, the exempt seller should contact the customer to see if they need help. If the exempt customer has had two payment plans cancelled in the last 12 months due to non-payment, the exempt seller does not have to offer the exempt customer another payment plan and the exempt seller may proceed with disconnection of energy provided that it complies with all other applicable obligations.

An exempt seller must also consider other ways to assist customers experiencing financial difficulty. The exempt seller must refer an exempt customer who is in financial difficulty to other schemes, rebates, concession programs and financial counselling services to assist the customer in managing their energy debt. It is critical that exempt sellers ensure that they examine applicable concessions and rebates and apply them as required to exempt customer’s accounts.

Where a customer is within a hardship program, an exempt seller must not charge late payment fees, require a security deposit, or make changes to the customers plan without the customer’s agreement.

The obligation to have a hardship policy is found within the new Condition 26 of the Guideline. Pursuant to Condition 26, an exempt seller must develop, implement, maintain and comply with, a plain English hardship policy for their residential customers that contains at a minimum, the standardised statements provided in the template and as enforced from time to time. The Exempt Sellers Hardship Policy must be initiated no later than three months from the exemption registration – approval date to which the condition applies.

An Exempt Sellers Hardship Policy must not include unreasonable conditions that the exempt customer has to meet before being eligible for hardship support.

Assistance must be provided in a timely manner. If an exempt seller deems a residential exempt customer to be ineligible for hardship assistance, the exempt seller must provide the residential exempt customer with the reasons why and advise the residential exempt customer of their right to contact the energy ombudsman scheme within their State.

AER Factsheet

Turning now to the AER’s factsheet how to access an authorised retail of your choice if you live in an embedded network, exempt sellers should ensure that they have copies of this document to be used if required. The document provides exempt customers with plain English information explaining what an embedded network is, the customer’s option to buy electricity including from an authorised retailer or from the exempt seller, and the costs of changing to an authorised retailer. The document also explains the customer’s rights with regard to paying twice for network charges and the energy ombudsman schemes in operation in each state and territory.

Condition 2 of the revised guideline has been updated to reference the Factsheet explained above. The revised Condition 2(1)(b) requires an exempt seller to provide an exempt customer, who is also a residential customer, with the hard copy or electronic link to the factsheet if they live within an embedded network as published on the AER’s website and as in force from time to time. A copy of the factsheet must be provided at the start of each customer’s tenancy, residency, or supply agreement and when the customer request this information or following an inquiry from a customer.

We have examined the genesis of the revised Exempt Seller Guideline in previous post and we recommend that all exempt sellers review the final decision and the revised Guideline in detail and contact us if they have any questions.

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