National Energy Customer Framework (NECF): Retailer Authorisations and Hardship

NECF jurisdictions and instruments

The National Energy Customer Framework (NECF) is underpinned by three key instruments: the National Energy Retail Law (NERL), National Energy Retail Regulations and National Energy Retail Rules (NERR). These instruments work together to establish a consistent set of obligations for energy retailers. National Electricity Rules AER enforcement applies in some circumstances.

Currently, the NECF is adopted in New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory. Victoria and Western Australia maintain their own separate retail regulatory regimes. The South Australian Parliament initially enacted the NERL, with each participating state subsequently passing application legislation to give effect to the framework.

The Australian Energy Market Commission (AEMC) has the responsibility of amending the NERR. Changes to the NERR are made through formal rule-change processes. The Australian Energy Regulator (AER) monitors and enforces compliance with the NECF across the jurisdictions where it is adopted.

Retailer authorisation regime

Under the National Energy Retailer Laws (NERL), selling energy to retail customers requires either a retailer authorisation from the Australian Energy Regulator (AER) or reliance on an exemption. This requirement ensures that entities operating as energy retailers meet certain standards.

The AER assesses authorisation applications based on criteria relating to organisational, technical, financial, and suitability capacity. This evaluation determines whether an applicant possesses the necessary capabilities to function effectively and responsibly as an energy retailer, potentially contributing to the Renewable Energy Target 2030 Australia.

The AER also grants individual or class exemptions, often for embedded networks and on-sellers operating within developments like apartment blocks or shopping centres. Authorised retailers and exempt sellers are both obligated to comply with NECF obligations, including those related to market and standing contracts, billing, marketing, and disconnection. The AER maintains a public register detailing authorised retailers and exempt sellers.

Customer hardship policies

Retailers operating under the National Energy Customer Framework (NECF) are required to have a customer hardship policy. The National Energy Retail Rules (NERR) rule 75B mandates that retailers submit these policies to, and obtain approval from, the Australian Energy Regulator (AER). This requirement is also outlined in the National Energy Retail Law (NERL) Part 2 Division 6.

Approved hardship policies must adhere to the AER’s Customer Hardship Policy Guideline, which was issued under section 43 of the NERL. This guideline provides direction on the content and implementation of hardship programs. ACCU Australian Carbon Credit Units Scheme are not relevant to hardship policies.

As part of their hardship programs, retailers must offer payment plans to customers experiencing hardship. These customers are also entitled to protections against late-payment fees and disconnection while participating in the program. Retailers are required to report data related to their hardship programs to the AER on a quarterly basis, as outlined in the AER Retail Performance Reporting Procedures and Guidelines.

Disconnection, billing and consumer protections

Retailers must adhere to specific disconnection-warning notice steps as outlined in the National Energy Retail Rules (NERR) before disconnecting a customer’s energy supply. Certain customers, designated as life-support customers, receive additional protections. These include registration processes, advance notification of planned interruptions, and a prohibition on disconnection. Retailers must also hold a Telecommunications Act 1997 carrier licence to operate.

Energy bills must meet the content requirements stipulated in the NERR. This includes providing customers with information regarding their energy consumption, associated charges, a comparison to previous billing periods, and details about energy-saving initiatives.

The Australian Energy Regulator (AER) has enforcement powers to ensure compliance with the National Energy Customer Framework (NECF). These powers include the ability to issue infringement notices, accept enforceable undertakings, and pursue civil pecuniary penalties for breaches. The AER also sets the Default Market Offer prices, which cap standing-offer prices in New South Wales, South Australia, and south-east Queensland.