The Australian Energy Market Commission has issued a draft rule to limit conditional discounts in retail energy contracts, which are provided to customers on the condition of being in good payment standing

In brief, under the draft rule, retailers will be required to limit the level of conditional discounts for gas and electricity retail contracts to the "reasonable cost savings" that the retailer expects to make if a customer satisfies the conditions of the discount.

Conditional fees (late fees) would also be limited

More specifically, under the draft, conditional discount means the amount by which a price payable by a small customer under a market retail contract is, or would be, reduced as a consequence of complying with a payment condition

Under the rule, a retailer must not include a conditional discount in a market retail contract with a small customer unless:

(a) the value of the conditional discount does not exceed an amount which is a reasonable estimate of the costs incurred, or to be incurred, by the retailer resulting from the customer’s failure to comply with the payment condition; and

(b) where the contract provides that the customer’s failure to comply with a payment condition results in that customer:

     (i) no longer being entitled to a conditional discount; and

     (ii) being liable to pay a conditional fee, the aggregate value of the conditional discount and conditional fee does not exceed an amount which is a reasonable estimate of the costs incurred, or to be incurred, by the retailer resulting from the customer’s failure to comply with the payment condition

Conditional fee means a fee or charge payable by a small customer under a customer retail contract due to failure to comply with a payment condition. Examples of fees for the purposes of this definition are late payment fees, direct debit dishonour fees and cheque dishonour fees

Furthermore, the draft would provide that a term or condition of a customer retail contract, including "standard" and "market" retail contracts, has no effect to the extent that it:

(a) provides for the payment of a conditional fee; and

(b) the amount of such conditional fee is greater than a reasonable estimate of the costs incurred, or to be incurred, by the retailer resulting from the customer’s failure to comply with the payment condition.

See more details here

Tags:
Australia  

Comment on this story


ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com
TPV-SALES-EXECUTIVE -- Back Office Provider -- Other
Sr-Market-Risk-Analyst -- Wholesale Supplier/Trader -- New York - New York City Metro
Energy-Regulatory-Specialist -- Other -- Other
More Stories on RetailEnergyX.com:
New Australian Guide Sets Forth How Retailers Must Adjust Prices, Mandate To Reflect Cost Reductions
Oil Major Total Seeks Australia Retail Electric Supplier License; Part Of Goal To Double Retail Biz
Australia's Largest Energy Co. Takes 20% Stake In U.K. Retailer Octopus, Will Adopt Business Model
Shell Takes 49% Stake In Australian Solar Developer, Supports Integrated Power Business
Shell Completes Acquisition Of Australian Retail Supplier, Building "One Stop Shop"