The Australian Energy Regulator has released its revised Retail Exempt Selling Guideline to strengthen a number of customer protections and better regulate low risk energy selling activities, while reducing the regulatory burden for sellers.
As detailed in previous editions of Energy Action’s updates, all sellers of energy must hold either an authorisation or an exemption under the National Energy Retail Law. The Australian Energy Regulator (AER) can exempt people or businesses (sometimes referred to as exempt sellers, onsellers, or non-authorised sellers) from the requirement to hold a retailer authorisation. Exemptions may be allowed in situations where energy is sold but a retailer authorisation may not be appropriate – for example, the sale of energy in retirement homes or caravan parks, or where an owner buys energy from an authorised retailer and then sells it to tenants.
The purpose of the revised Retail Exempt Selling Guideline (Guideline) is to assist anyone selling energy incidentally to understand if they may be eligible for an exemption, how to register or apply and the conditions they must comply with if they hold an exemption.
The AER has revised the Guideline to make it clearer, more flexible and to better reflect developments in the energy retail market, in particular in the area of alternative energy selling. There are also a number of new requirements on exempt sellers.
The Guideline currently applies in Queensland, New South Wales, South Australia and the Australian Capital Territory. Although Tasmania has adopted the Retail Law it has derogated aspects of the retail exemptions framework and the registrable and deemed exemption requirements do not apply.
In summary, the key changes are:
- incorporate the AER's position on alternative energy sellers into the Guideline and create a new registrable class exemption for solar power purchase providers who meet the eligibility criteria;
- clarify obligations on exempt sellers who plan to retrofit an embedded network, including decreasing regulation where all customers in the embedded network have agreed to the network conversion;
- require exempt sellers applying for an individual exemption for a retrofit to provide additional information as part of the application process;
- provide clearer guidance to exempt sellers about their obligations, for example, through removal of references to 'fair and reasonable' pricing and imposing a positive obligation on sellers in relation to customers' concession energy rebates;
- create a new class exemption for sellers supplying energy, on a temporary basis, for the construction and commissioning phase of building, civil, construction, industrial transport, mining or other projects;
- extend the eligibility criteria for particular classes of sellers, including opening up a number of classes to sellers that are of the same "type" without specifically identifying them. This is intended to allow the AER to better regulate the "unknown" element of exempt selling and reduce the need for ongoing revisions to the Guideline; and
- clarify how the AER administers the Guideline, including in relation to the liability of agents, the cancellation of an exemption and consequences of breaches of conditions.
The revised guideline (version 4) commenced in March 2016.