How energy consumers are protected under the NECF and ACL
There are two main sources of consumer protection for energy products and services, the National Energy Customer Framework (NECF) and the Australian Consumer Law (ACL). The ACL is the principal consumer protection and fair trading law in Australia. The NECF regulates the sale and supply of electricity and gas to retail customers, and harmonises most energy consumer protections across participating jurisdictions. The NECF complements and operates alongside the generic consumer protections in the ACL, and state and territory regimes.
The NECF was developed in the context of regulating traditional services and the Australian energy retail market being opened up to competition. At the heart of this framework is the principle that consumers have a right to access energy (as an essential service) on fair and reasonable terms. Since the NECF was established, the energy market has undergone significant transformation due to new technology, innovation in products and services, and changes in consumer preferences. The way in which electricity is supplied to consumers and how consumers engage with the market is changing. These changes have potential regulatory implications, in particular on regulations designed to protect energy consumers.
In previous reviews the Commission has noted that the evolving nature of the energy market provides an opportunity to consider whether the existing energy specific consumer protection framework continues to meet its objective. There are differences between energy-specific consumer protections and more general consumer protections contained within the ACL. In order to understand these differences, and as a first step to reviewing how the NECF can continue to be fit for purpose, the content in this section of the website reviews and maps the consumer protection elements of the NECF and the ACL, with the following key sections:
- Mapping of the consumer protections under the NECF and the ACL identifying consumer outcomes under each framework
- Jurisdictional differences within the NECF
- A description of the enforcement powers to compare how consumers are protected under both frameworks and which are the applicable penalties and remedies
- Analysis of consumer protection for non-traditional energy services and products.
You can also download all the content found in this section as a PDF.
The market has evolved significantly in recent years in relation to non-traditional energy services and products. The specific nature of the NECF has not adapted to these changes. There is a need to analyse and update the NECF framework to remove barriers to innovation and extend consumer protections to new models of essential service supply. We will commence this second stage of work through our 2020 retail energy competition review.
In this second stage, the Commission will review whether changes to the NECF are necessary to make consumer protections fit for purpose and reduce barriers to innovation. This review will analyse the regulatory approach for new non-traditional energy services and products with a focus on:
- Demand response for small consumers
- Distributed energy resources (DER)
The AEMC is aiming to release its first issues paper on this work in December 2019 and will hold stakeholder workshops in 2020.
For further information please contact Stephanie Flechas