The Australian Energy Market Commission has made a rule change to simplify electricity and gas bills, protecting consumers while also unlocking innovation and competition.
Today’s final determination follows a request from the Minister for Energy and Emissions Reduction Angus Taylor to change the National Energy Retail Rules so that households and small businesses could better understand their energy bills, avoiding confusion and frustration.
“Technological innovation in the energy market is changing how consumers and retailers interact,” the Commission says in the rule determination.
“On digital platforms, such as smart phone applications and web portals, customers can see their energy usage in detail and close to real time. Retailers can communicate with households and small business customers when a direct debit is due, or a price spike is expected, and vice versa. The introduction of a consumer data right in energy is likely to introduce third parties as digital retail service providers, to help consumers find the best deal.”
The rule takes account of new technology options – protecting consumers, while also allowing them to benefit from innovation and market developments.
Under the rule change, existing billing provisions will be replaced with a mandatory guideline to be developed by the Australian Energy Regulator (AER). Energy retailers will be required to comply with this billing guideline, which will govern how they prepare and issue bills to small customers.
The rule sets out the purpose of an energy bill – for example to enable small customers to easily understand payment amounts, dates and methods.
In making the billing guideline, the AER will need to take into account certain principles. These include the need for consumer protections at the same time as enabling innovation and consumer choice, compliance costs for retailers and thus consumers, and the potential benefits of standardised language and terminology across bills, contracts and offers.
The proposed new approach provides a flexible way to respond to changes in the market and consumer choices.
The final rule addresses concerns raised during an extensive stakeholder consultation process.
The rule now explicitly requires the AER, when it is developing the billing guideline, to consider the National Energy Retail Objective (NERO) and the consumer protection test. These are aimed at promoting the long term of interests of consumers and ensuring protections for hardship customers.
The Commission has also amended the draft rule to better enable digital delivery of bill information by allowing the AER to specify in the guideline that retailers can provide different types of information using different delivery methods. “Providing a customer gives their consent, the Commission supports digital delivery of bill content as it fosters innovation and aligns with many customers’ preferences,” the determination says.
Given the rise in the use of apps, the web and email to give consumers billing information, we looked at the availability of paper bills in the market. We found that most retailers offer paper bills on their cheapest offers (75 per cent in Queensland and South Australia, and in NSW on at least one of the three cheapest offers). We consider that if changes are needed for vulnerable customers, a holistic review of customer vulnerability is a better way to deal with concerns about disadvantage in a digitalised environment. The AER will be undertaking detailed customer research on this and other customer billing issues.
In response to feedback, the implementation time frame for the final rule has been amended from the draft. Specifically, while retailers will still be required to comply with the guideline from 4 August 2022, the AER has discretion to set later dates for certain provisions, so long as all provisions in the first guideline start by 31 March 2023.
Media: Media and Content Manager, Kellie Bisset 0438 490 041