Victorian Energy Market report 2018-19

We are working on several reviews and reforms that will affect how Victorian businesses and customers interact in the energy market. 

Key changes under consideration include:

• new protections for energy customers experiencing family violence
• clearer and fairer contract terms and conditions for energy retail customers
• stronger protections for customers relying on life–support equipment
• updated technical standards and customer protections under the Electricity Distribution Code
• improving network connection time frames for new developments
• guidance and resources for embedded networks and their customers and
• a new framework to monitor and report on the competitiveness and efficiency of the Victorian energy retail market.

New protections for energy customers experiencing family violence

We have updated the Energy Retail Code to strengthen protections for residential and small business customers of energy retailers affected by family violence. These new obligations commence on 1 January 2020.

The Victorian Royal Commission into Family Violence identified how perpetrators can use essential services to cause harm.

It recommended the amendment of energy and water codes to ensure customers experiencing family violence receive the support they need when they need it.

To implement this recommendation, we have worked with the energy sector to develop a family violence framework and a better practice guide for the industry. 

We worked with energy retailers, family violence specialists, including financial counsellors, and victim-survivors of family violence, who shared their stories and experiences with us. 

Available from August 2019, the better practice guide features case studies on initiatives from across the energy and water sectors to help customers affected by family violence. 

The guide aims to foster innovation beyond the minimum standards and inspire business practice towards continual improvement. 

The updated Energy Retail Code will provide customers affected by family violence with an entitlement to safe,

supportive and flexible assistance from their energy retailer in managing their personal and financial security.

Energy retailers will need to have a family violence policy, and meet minimum standards on:

• training
• account security
• customer service
• debt management practices
• external support services
• evidence of family violence.

In 2019, we also established a baseline on how customers are currently treated by their energy retailers. This will act as a benchmark for future reporting once the provisions are implemented. 

Clearer and fairer contract terms and conditions for energy retail customers

In 2018–19, we established new customer entitlements to help customers engage more confidently and rebuild trust in the retail energy market. 

This work is continuing in 2019–20 with a focus on ensuring energy contracts are clear and fair. 

In June 2019 we published an issues paper outlining implementation options and plan to publish a draft decision in December 2019.

We expect amendments to the Energy Retail Code relating to contract periods, practices and variations to come into effect on 1 July 2020.

These reforms are part of a broader suite of rule changes arising from the Independent Review of the Electricity and Gas Retail Markets in Victoria. 

The review found the retail energy market was not working in the long-term interests of consumers and made 29 detailed recommendations aimed at improving outcomes for consumers. 

Strengthening protections for life support customers

Customers who rely on life support equipment to live need access to a reliable supply of electricity or gas to their premises. 

As the regulator, we need to make sure the energy rules promote continuity of supply for these customers. This includes requiring retailers and distributors to communicate with each other when a life support customer is identified.

In 2019–20 we have worked to strengthen the life support rules to:

• ensure protections are in place for these customers as soon as they inform their energy business they require life support equipment 
• extend life support protections to customers who require gas to fuel their life support equipment
• establish a requirement for more robust processes to ensure the accuracy of life support registers
• promote better communication between energy businesses in relation to life support customers
• provide more comprehensive information to life support customers about their rights, processes and energy businesses’ obligations
• clarify responsibilities between customers and energy businesses in situations where life support equipment is fuelled by both electricity and gas

These strengthened protections are in addition to existing critical protections that prevent Victorian life support customers being de-energised or disconnected by their energy business, and require distributors to notify customers of a planned interruption.

In 2020, these new rules will take effect. We have also included some transitional arrangements for legacy life support customers to ensure they are protected under the new framework.

Electricity Distribution Code review

The Electricity Distribution Code sets out requirements for distributors and customers to promote the safe and efficient delivery of electricity for Victorians.

Given the technological change facing the electricity network, we are undertaking a review of the distribution code to ensure it meets our needs into the future.

In April 2019, we set out our approach for reviewing the code, focusing on:

• Technical standards, which set the level of quality the distribution network must provide and manage.
• Customer protections, which include recognition payments for customers experiencing poor reliability due to the physical network, and distributor requirements to notify customers of planned outages.

Throughout 2019–20 we will engage further with stakeholders on the technical and customer service standards to prepare our draft and final decisions. 

We plan to make our final decisions and amend the code during 2019–20.

Once this is completed, we will look at broader changes that may improve how the code is used and how it enhances the service provided to consumers.

A new approach to improving electricity connections times

During 2019–20 we are examining whether to codify electricity connection timeframes. 

In 2018, we provided advice to the Assistant Treasurer (then Minister for Finance) on the causes of delays to electricity connections in new developments (in greenfield areas). 

In September 2018, all five Victorian electricity distribution businesses signed a service improvement commitment agreeing to a number of improvement initiatives.

We established a governance committee chaired by commission chief executive John Hamill to oversee the implementation of the commitment. 

In May 2019, developers reported a considerable improvement in distribution businesses' performance over the last 12 months. 

Although we recognise the improved connection timeframes reported by distributors and recognised by developers, we also considered formalising distributors practices as obligations in our code as part of our review.

Supporting new protections for energy customers in embedded networks

Throughout 2019–20 we are continuing our work with exempt retailers, distributors and their customers. Our main focus is developing resources to help ensure customers are receiving the right service for them. 

This includes:

• creating sample electricity bills, payment reminder notices and disconnection warning notices for exempt persons to use
• publishing a guide to Victorian electricity rules for exempt retailers and distributors and
• developing a sale and supply agreement template to assist exempt persons with providing required information to customers.

These tools will help customers know what service they are paying for, clarify obligations for exempt persons providing energy services and provide a set of protections embedded network customers can rely on.