National Retail Energy Reforms Commence

The implementation of the National Energy Customer Framework (Customer Framework) continues with its recent adoption in South Australia under the National Energy Retail Law (South Australia) (Implementation) Amendment Act 2012 on 1 February 2013.

Agreed to by the Council of Australian Governments under the Australian Energy Market Agreement as the process of energy reform, the Customer Framework is a streamlined, single, national regulatory regime intended to improve regulatory certainty and competition benefits to consumers, and to reduce compliance costs. The Customer Framework does not include the technical regulation of energy suppliers.

The National Energy Retail Law (South Australia) Act 2011 (the Act) functions as the model legislation for the Customer Framework. It was passed in March 2011 by the South Australian Parliament, the lead legislator on behalf of the Standing Council on Energy and Resources.

The focus of the Customer Framework is on providing a regulatory framework for the relationship between energy customers and energy retailers and distributors and includes a range of energy-specific consumer protections. It is an amalgamation of State-based regulatory frameworks (excluding retail price regulation and community service obligations).

The Customer Framework comprises a number of key instruments:

• National Energy Retail Law (Schedule 1 of the National Energy Retail Law (South Australia) Act 2011)

• National Energy Retail Rules

• National Energy Retail Regulations  

• Amendments and additions to the Rules made under the National Electricity Law and, amendments and additions to the Rules made under the National Gas Law

Together, these Laws and Rules form the key protections and obligations for energy customers and energy retail companies. In order for the Customer Framework to apply, each participating jurisdiction, including South Australia, is required to pass its own legislation adopting the Retail Law, Rules and Regulations. The Customer Framework is currently in various stages of implementation in the participating jurisdictions of Queensland, New South Wales, the Australian Capital Territory, Victoria, Tasmania and South Australia.

• South Australia – Commenced the National Energy Customer Framework on 1 February 2013. Further information is available here.

• Victoria – The Customer Framework will commence as soon as is practicable. Further information is available here.

• NSW - The NSW Parliament passed legislation to implement the Customer Framework on 13 June 2012. The Customer Framework is planned to commence in New South Wales on 1 July 2013. Further information is available here.

• Queensland is yet to consider its position on application of the Customer Framework. More information is available here.

• ACT - The ACT applied the Customer Framework instruments with effect from 1 July 2012. Further information is available here.

• Tasmania - Tasmania has applied the Customer Framework instruments with effect from 1 July 2012. More information is available here.

• Western Australia and the Northern Territory have not expressed an intention to implement the reforms.

Under the Customer Framework, the Australian Energy Regulator (AER) takes over the responsibility for regulating energy retailers, including enforcement. The AER will also oversee an energy price comparison service for consumers.

In jurisdictions where the Customer Framework has commenced the AER is responsible for:

• monitoring and enforcing compliance with obligations in the Retail Law, Rules and Regulations

• monitoring the performance of the energy market and businesses, including energy affordability and trends in customer disconnections for non-payment of energy bills.

• evaluating applications for national retailer authorisations from businesses proposing to become energy retailers (hitherto jurisdictionally licensed), and permitting exemptions from the requirement to be authorised (for example, for nursing homes and caravan parks that pay for energy and on-sell it to their tenants as part of their normal business)

• approving policies energy retailers have to implement to support customers dealing with financial adversity and who request assistance to manage their bills

• directing a national retailer of last resort scheme which safeguards customers and the market if a retail business fails

In states that have yet to adopt the Customer Framework, state and territory governments will remain responsible for regulating retail energy markets.

Further information is available on the Australian Energy Market Commission website.

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