AEMC recommends new rules to make switching retailers easier for customers

10 April 2014

The Australian Energy Market Commission (AEMC) today released its final report on its review of electricity customer switching arrangements in the National Electricity Market (NEM).

The report proposes improvements to the switching process to make it easier for consumers to act on their choice to change their electricity plans between different retailers; and support confidence in the integrity of market processes.

AEMC Chairman, Mr John Pierce, said the report’s final recommendations have been given to ministers on COAG’s Standing Council on Energy and Resources (SCER) and focussed on ways to improve both the timing and accuracy of customer transfers between retailers.

“We found that while most customers tend to experience retailer switching times of less than one month, a small proportion of customers still experience lengthy and at times inaccurate transfers,” Mr Pierce said.

“While a relatively small number of customers experience switching difficulties, it is important to strive for improvements so consumers can have confidence with the switching process; and find it easier to shop around for the best deal for them.

“At the moment, customers with a manually-read meter can generally only switch retailers after their meter has been physically read by a technician – and receipt of the meter reading information can potentially take up to three months, unless the customer pays a call-out charge to have their meter read sooner.

“The Commission has recommended a number of process improvements which increase obligations on parties involved in the transfer process, including retailers, to improve the consumer experience,” Mr Pierce said.

The recommendations are to:

  • give customers a choice to transfer retailers on the basis of estimated meter reads;
  • develop standards for data used in the customer transfer process;
  • require the Australian Energy Regulator to increase its reporting on the timing and accuracy of transfers;
  • require retailers to move quickly to restore arrangements for customers who have been wrongly transferred; and
  • introduce a periodic review of the effective operation of the customer transfer process by the Australian Energy Market Operator.

The report’s recommendations aim to facilitate the delivery of positive switching experiences for customers, meaning that customers would be more likely to continue to engage with the retail energy market in the long term. Our recommendations, therefore, promote greater customer choice in retail market engagements.

The AEMC has recommended that SCER propose rule changes to the AEMC to give effect to recommendations contained in our final report.

Our advice to SCER delivers on one of the AEMC’s recommendations under the Power of Choice review, which is currently being implemented by energy ministers. Power of Choice set out a substantial reform package for the NEM, focussing on giving consumers more opportunities to make informed choices about the way they use electricity, and manage expenditure.