The Australian Energy Market Commission (AEMC) is currently considering a rule change request to amend the National Energy Retail Rules (retail rules). The request seeks to prohibit retailers from including terms in their contracts that allow them to change prices during fixed term or fixed benefit period market retail contracts (fixed period contracts). The rule change request was submitted by the Consumer Action Law Centre (CALC) and the Consumer Utilities Advocacy Centre (CUAC).
Consultation paper
On 26 March 2014 we made a submission to the AEMC’s consultation paper on retailer price variations in market retail contracts, a rule change proposed jointly by the Consumer Action Law Centre and the Consumer Utilities Advocacy Centre. The rule change proposal sought to prohibit energy retailers from varying prices during fixed term or fixed benefit period market retail contracts. The AER, whilst supporting the objective of improving consumer confidence in the energy retail market, highlighted concerns that proposed regulatory intervention to ban price variations may result in reduced choice and higher prices for customers, and proposed that other strategies such as improving consumer education and the transparency of information may more effectively address the issues raised by the rule change proposal.
Stakeholder forum
On 19 May 2014, the AEMC held a stakeholder forum in Melbourne to facilitate discussion on the key issues in the rule change request. The AER presented at this forum.
AER presentation to AEMC forum - 19 May 2014
Draft rule determination
On 2 September 2014, we made a submission to the AEMC’s draft rule determination on retailer price variations in market retail contracts. The AEMC’s draft determination did not make the rule proposed by CALC and CUAC, instead proposing a more preferable draft rule aimed at improving disclosure to customers at the point of entry to a market retail contract. The AER’s submission is supportive of the AEMC’s draft determination as a first step to help promote transparency and assist customer engagement in retail markets. The AER’s submission also discusses further work that the AER could undertake to support the AEMC’s draft rule, such as consulting on possible amendments to the AER’s Retail Pricing Information Guideline to improve energy price fact sheets and further improvements to Energy Made Easy.
AER - Submission to AEMC draft rule determination - 2 September 2014