Rule Change: Completed
On 19 December 2019 the AEMC made a final (more preferable) rule to speed up the process for customers to transfer to a new electricity retailer.
This rule change request from the Australian Energy Market Operator and is part of the AEMC and AEMO’s joint work program on reducing customers’ switching times.
The final rule:
- allows AEMO to move the provisions from the Market Settlement and Transfer Solution (MSATS) Procedures to the Meter Churn Procedures, where it more appropriately fits
- provides flexibility to AEMO and industry to determine the most efficient customer transfer process design and to remove any ambiguity between other provisions in the National Electricity Rules regarding metering coordinator appointments by the financially responsible market participant.
The final rule also amends the model terms and conditions for standard retail contracts in the National Energy Retail Rules (NERR) to clarify that a customer can transfer to the same retailer’s market retail contract, or to another retailer’s standard or market retail contract.
The final rule achieves the intent of AEMO's rule change request but with variations in its implementation. The final rule is the same as the Commission's draft rule.
In regards to the other issues raised by AEMO in its rule change request, the Commission decided to not make any amendments to:
- clauses in the NERR regarding meter read types and use of metering data
- clauses in the NERR regarding the overcharging and undercharging processes
- the model terms and conditions for standard retail contracts to facilitate transfers on estimate meter reads
- prohibit retailers from containing provisions in their market retail contracts that only allowed final bills, and therefore transfers, on actual meter reads.
The Commission concluded that no changes are required to these clauses to facilitate AEMO's implementation of its high level design for an improved customer switching process. Also, the current NER and NERR provide a sufficient level of consumer protection.
Instead, where there is currently doubt regarding the interpretation of these clauses, the Commission has provided clarifications within the final rule determination.
Additionally, the Commission has also chosen to not adopt AEMO's proposal to remove the ability of retailers to recover any undercharged amount as a result of a customer transfer. The undercharge and overcharge provisions act together to provide rights to customers and retailers to recover revenue when a bill is inaccurate. Removing the undercharge provision would increase risks for retailers and in turn increase prices for their customers, especially with the likelihood of a greater number of transfers occurring on the basis of estimated reads.
The Commission will be collaborating closely with AEMO, AER and jurisdictional ombudsmen schemes on implementation and monitoring of the new switching process.
Background – Joint work program on customer switching
On 3 December 2018, the AEMC and AEMO provided joint advice to the Council of Australian Governments (COAG) Energy Council in response to a request from the Senior Council of Officials. It addressed improvements to the customer transfer process in the national electricity market, taking into account the related recommendations 8 and 9 of the Australian Competition and Consumer Commission (ACCC) Retail Electricity Pricing Inquiry Final Report (REPI).
In developing the advice AEMO and the AEMC highlighted that the changes are largely within AEMO’s remit through procedure changes. The only changes required to the rules were clarifications and checks that consumer protections are adequate for a circumstance where more customers may change retailers based on self-reads and estimated reads. The changes have been addressed through this rule change request.