The Australian Energy Market Commission today published a draft rule to improve retailers’ hardship policies so vulnerable customers can get the help they need to pay their bills. 

We are also recommending that COAG Energy Council make a law to prevent new retailers from starting their business until they have approved hardship policies in place.

The draft rule would require the Australian Energy Regulator to develop new customer hardship guidelines that are binding on retailers. The new guidelines would require retailers to:

• detail their process for early identification of vulnerable customers, so they can be included on hardship programs before their debts get out of control
• use consistent, transparent and specific action statements in their hardship policies so customers know their rights.

Retailers would also have to set out how they will help vulnerable customers pay their bills by:

• ensuring customers are on the best energy plan that meets their needs
• offering programs to help customers manage their energy use, such as audits
• putting customers on a manageable payment plan.

The draft determination includes a joint AEMC/AER recommendation for new civil penalties, such as fines, to protect customers if retailers fail to comply with the new obligations. Having clearer hardship policies would also make it easier for the AER to monitor the performance of retailers and penalise any breaches. 

The proposed changes would be part of the National Energy Customer Framework (NECF) which applies in the ACT, Tasmania, South Australia, New South Wales and Queensland. The changes would not apply in Victoria as it has its own Energy Retail Code. 

The AER must have the new hardship guidelines in place by 1 April 2019. Stakeholders are encouraged to provide feedback on the draft rule with submissions closing 18 October 2018.

This rule is part of the AEMC’s consumer action protection plan.

Background

This rule change request from the AER is an outcome of its 2017 Hardship Review which found deficiencies in how retailers implement their hardship policies. These policies are designed to help vulnerable customers pay off their debt and avoid having their electricity and gas disconnected.

The review found that many policies may not sufficiently align with the minimum requirements of retailers’ hardship obligations under the National Electricity Retail Law. Also, many customers are not receiving adequate guidance from their retailer about their rights and entitlements.

Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7817