The Australian Energy Regulator (AER) received referrals from Services Australia in May 2024 related to three energy retailers who allegedly continued to obtain deductions from Centrepay payments for inactive customers.
After an earlier referral the AER has taken action against AGL where it allegedly overcharged customers by obtaining Centrepay deductions after the customer had ceased receiving energy services from AGL. The AER alleges that AGL failed to notify affected customers of the overcharges and failed to use best endeavours to refund the overcharges within the required time periods. The hearing on liability concluded before Justice Downes on 6 June 2024.
The AER is awaiting judgment in these proceedings before considering any action against the three retailers referred by Services Australia. However, the AER is working with these retailers to ensure that affected customers are refunded in a timely fashion.
The AER recognises that Centrepay is an important payment option for energy consumers and retailers are obligated to accept payment by Centrepay under the National Energy Retail Rules. The AER expects all retailers to make every effort to ensure that Centrepay payments are handled in accordance with their intended purpose, including for customers experiencing vulnerability. Specifically, the AER expects:
- retailers to have appropriate policies, systems and procedures for ensuring that Centrepay deductions are cancelled promptly after a customer has ceased receiving gas or electricity services
- that if a retailer becomes aware that a Centrepay deduction was obtained after a customer has ceased receiving gas or electricity services, notify the affected customer and use best endeavours to refund the amount within 10 business days.
The AER remains focussed on protecting vulnerable customers, while enabling consumers to participate in energy markets. As part of the broader Centrepay reform announced by the Hon Bill Shorten MP, Minister for Government Services, the AER has made a submission to Services Australia’s Centrepay Reform Discussion Paper for consideration. In the submission the AER suggests the Centrepay Framework be expanded to include an assessment of businesses' policies and procedures for monitoring compliance with the Framework.
Notes to Editors
AGL Centrepay proceedings
On 22 December 2022, the AER instituted proceeding against AGL Retail Energy Limited and three other subsidiaries of AGL Energy Limited (together, AGL) in the Federal Court. The hearing on liability concluded before Justice Downes on 6 June 2024 and Her Honour has reserved her decision.
National Energy Customer Framework
The National Energy Customer Framework is a suite of legal instruments that regulate the sale and supply of electricity and gas to retail customers. It includes the National Energy Retail Law, the National Energy Retail Rules and the National Energy Retail Regulations. Read more here.
The AER is currently undertaking a review of payment difficulty protections in the National Energy Customer Framework. This review aims to identify whether change is needed to ensure that consumers experiencing payment difficulty are proactively identified, engaged early and supported appropriately with assistance that is tailored to their individual circumstances.
National Energy Retail Rules
The National Energy Retail Rules impose legal obligations on energy retailers in respect of circumstances where a customer has been overcharged.
National Energy Retail Law
The National Energy Retail Law imposes legal obligations on regulated entities to establish arrangements to monitor compliance with the National Energy Retail Law and Rules.
The AER’s Compliance and Enforcement Priorities
Acting where there are serious issues impacting consumers experiencing vulnerability is one of the AER’s enduring Compliance and Enforcement Priorities. Read more about the AER’s 2024-25 and enduring Compliance and Enforcement Priorities.