AGL Sales Pty Ltd (AGL) acquired Australian Power and Gas Pty Ltd (APG) in September 2013. While they are separately licensed, APG is wholly owned by AGL.

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We accepted an undertaking from AGL for certain compliance issues

AGL's disconnection warning notices did not comply with the Energy Retail Code in the following instances: 

• Between 31 August 2011 and 24 January 2013, AGL issued 26,394 disconnection warning notices to deemed contract customers which stated a pay by date which was one business day earlier than specified in the code.
• Between 20 December 2012 and 23 July 2013, AGL issued 35,910 disconnection warning notices to some customers which stated a ‘disconnection warning period’ that was less than 7 business days after the date of receipt of the disconnection warning notice.
• Between June 2008 and 16 January 2013, APG issued 293,991 disconnection warning notices to some customers which stated a ‘disconnection warning period’ that was less than 7 business days after the date of receipt of the disconnection warning notice.

The undertaking required AGL to reach an agreement with affected customers

The administrative undertaking commits AGL to carry out a series of steps to identify customers who were disconnected after receiving a non-compliant notice, and reach an agreement to settle the matter.

As part of the undertaking, AGL has agreed to provide written assurances to us that the problems that led to the issue have been resolved, and that mechanisms are in place to ensure that they do not occur again. AGL will also provide assurances relating to its record keeping processes.

AGL reported to us on their progress

AGL will provide monthly reports to us on its progress with the undertaking, commencing in October 2015 until February 2016. The undertaking was subject to audit after completion.

We acknowledge AGL’s cooperation in developing the undertaking

We accepted this undertaking in accordance with its stated approach to non-compliance, set out in our Compliance Policy Statement For Victorian Energy Business (January 2012).

This page presents the assurances provided by AGL and a summary of the audit conducted in 2016 and our response to the findings.

We released our Review of Regulatory Instruments Stage 1: Final Decision in the second half of 2008. 

We considered a request by energy retailers to vary obligations on them in certain circumstances under the Energy Retail Code. Since this project's completion, we've completed several other projects that have resulted in updates to the code. 

Our final decision focused on customer instalment plans and related principles

As part of this project, we considered advice from the Energy and Water Ombudsman Victoria that approximately 50 per cent of disconnection cases are found to be wrongful. When we prepared our Disconnection Reconnection: Draft Decision, we proposed to not vary the obligations on retailers without compelling evidence and invited submissions.

Our Obligations to Customers (Disconnection and Reconnection): Final Decision related to:

• outlining principles that retailers should follow regarding offering a second instalment plan to customers
• retaining an Energy Retail Code provision related to offering instalment plans to domestic and small business customers
• considering the adequacy in all the circumstances of the retailer's assessment of the customer's capacity to pay instalments
• considering whether the retailer has assessed the customer's capacity to pay a lump sum in the case of an alleged wrongful disconnection 
• retailers accepting overpayment of instalments and additional payments during an instalment plan
• prohibiting retailers from demanding a lump sum from a customer as a condition of applying for a utility relief grant
• deleting clause 15.2(b) of the Energy Retail Code and requiring retailers to pass on to distributors within one hour a customer's request for reconnection, which applies to smart meter customers (where the retailer considers that reconnection is safe)
• explicitly applying safety discretion to clause 13.1.2 of the Energy Retail Code.

The Energy Retail Code lists customer obligations for energy retailers 

The code requires retailers to:

• offer more than one instalment plan to help customers with payment difficulties before taking disconnection action, and to meet certain detailed requirements for instalment plans [clauses 11.2(3), 12 and 13.1(a)]
• reconnect a smart meter customer within a certain timeframe, regardless of the fact that it is not the retailer's role to perform the reconnection [clause 15.2].

Our review included the assessment of capacity control products and the verification of bills for smart meter readings.

In 2011, Lockstep Consulting was engaged by the Department of Primary Industries (DPI) to undertake a Privacy Impact Assessment of Victoria’s smart metering program.  The report looked at whether smart meters affected customer privacy in relation to interval metering, remote communication and control capabilities, and management and design of the metering system.

The Minister for Energy and Resources asked us to:

• consider the relevant findings and recommendations of the Lockstep report and review, accordingly, the regulatory requirements on retailers and distributors
• require electricity Retailers and Distributors to ensure that they comply with privacy standards and procedures in relation to smart meter data in accordance with their licence requirements
• publish a fact sheet on the YourChoice website advising customers how personal information is handled securely by retailers and distributors
• liaise with the former Department of Primary Industries (DPI) on the development of a framework within which third parties may provide smart meter enabled products and services while protecting the rights and interests of customers.

After discussions with DPI, we released an Information request seeking industry submissions in relation to sixteen of the recommendations.  The remaining eight recommendations are to be considered by other regulatory agencies. 

In 2012, the former Minister for Energy and Resources asked us to consider harmonising our codes and guidelines with the national energy customer framework and the National Energy Retail Law (Victoria) Bill 2012.

We reviewed relevant codes and guidelines to ensure that:

• they aligned more effectively with the framework and new legislation
• the updates did not reduce key protections for Victorian customers.

Following the release of drafts, extensive consultations and workshops, we released our Harmonisation Paper: Final Decision and made amendments to the Energy Retail Code, which were incorporated into version 11 of the code. We also made a series of consequential amendments to other relevant codes and guidelines that make up the regulatory framework.

This guideline was replaced by Audit Guidelines for Energy Businesses, which was finalised on 24 April 2018.

Guideline 22 outlines: 

• how a regulatory audit scope was determined
• how the auditor will be approved
• what governance arrangements will apply during the audit process
• the form and format of the audit report. 

The guideline was designed to encourage a culture of continuous improvement in the energy industry.

Under the terms of a licence, electricity and gas licensees were required to:

• comply with guideline 22 and any other guideline relevant to the audit process
• appoint an independent auditor to conduct an audit of certain areas.
   

This review of our energy retail performance indicator framework aimed to ensure that our performance indicators aligned, where appropriate, to similar indicators used by the Australian Energy Regulator.

This review helped create consistency in performance indicator requirements

Our updates should help any future transition to the national energy customer framework and create a uniform reporting framework for retailers operating across different jurisdictions. The review also enabled us to streamline the data, improve terminology and clarify definitions.

We consulted with stakeholders on this review

We undertook a range of stakeholder consultations, including with the Energy and Water Ombudsman Victoria and the Australian Energy Regulator. Following the receipt of stakeholder submissions, a workshop with a number of retailers was also conducted. We also received a range of submissions from interested parties.

After considering of all issues raised in these forums, we produced our Energy Retail Performance Indicators Review: Final Decision and the full set of changes for the 2013-14 reporting period.

To gain greater insights into the factors driving higher retail electricity prices in Victoria, we asked SKM-MMA to model retailers' costs and margins.

The SKM-MMA Retail Margin for Residential Supply Report is accompanied by two papers we produced: the Electricity Retail Margins Discussion Paper, which summarised the supply report's analysis, and the Electricity Retail Progress Competition Research Paper, which reported on the progress of electricity retail competition in Victoria.

In 2013, the Victorian Government introduced flexible pricing of electricity made possible by the roll out of ‘smart meters’. The Advanced Metering Infrastructure Order in Council 2013 provides for some new customer protections and other arrangements for the introduction of flexible pricing later in 2013.

Following review of related instruments, we released our Changes to Regulatory Instruments Relating to Flexible Pricing: Final Decision.