Recent amendments to regulatory requirements in New South Wales afford greater protection to small customers (being customers which consume less than 160 MWh each year of electricity) facing financial difficulty from having their electricity supply discontinued. The amendments also change the way in which small customers can elect to be supplied with electricity under regulated rates in New South Wales, as well as changing or clarifying various other obligations imposed on electricity distributors and retailers who are licensed in New South Wales.
1 July 2007 marked the commencement of the Electricity Supply (General) Amendment Regulation 2007 (NSW) (Amending Regulation) which amends the Electricity Supply (General) Regulation 2001 (NSW) (General Regulation). Summarised below are eight areas of change to the regulatory environment for NSW-licensed electricity retail suppliers (Retailers) and distribution network service providers (DNSPs) effected by the Amending Regulation. While the Amending Regulation commenced on 1 July 2007, the requirement to comply with some of its amendments does not commence until 1 October.
From 1 October 2007, all Retailers are required to operate payment plans for residential customers which, in the Retailer's opinion, are experiencing financial difficulties. Such payment plans must enable customers to make payments by instalments, in advance or arrears, and must provide procedures that are fair and reasonable for dealing with the financial difficulty faced by a customer who is obtaining the benefit of the plan.
Previously such plans were only required to be operated by "Standard Retailers", being the Retailers which are required by an endorsement on their licence to supply small retail customers within a specified geographic area with electricity at regulated rates under a standard form customer supply contract.
Licence condition in relation to payment plan action required before disconnection action taken
From 1 October 2007, Retailers are prohibited from:
- discontinuing supply to residential premises owned or occupied by small retail customers; or
- requesting the DNSP disconnect these premises,
on the grounds that the customer has failed to pay the Retailer unless various steps are first taken by the Retailer. Steps include a written notice being sent by the Retailer to the customer indicating the customer could apply for a payment plan if the customer is experiencing financial difficulty.
DNSPs which provide customer connection services to small retail customers through those customers’ Retailers are also prohibited from disconnecting residential premises owned or occupied by small retail customers unless the Retailer has notified the DNSP that the Retailer is authorised to make the request under the General Regulation.
Payment plan now a precursor to disconnection
The General Regulation regulates the content of:
- standard form customer supply contracts (SFCSCs), which are electricity supply contracts between Standard Retailers and certain small retail customers in NSW within an area prescribed in the Standard Retailer’s licence under which electricity is supplied at regulated rates; and
- negotiated supply contracts with small retail customers (NSCs), which are electricity supply contracts between Retailers and small customers located anywhere in NSW under which electricity is supplied at negotiated rates.
The Amending Regulation now requires that SFCSCs and NSCs include provisions stating that the disconnection process will include:
- advice to the customer of any payment plan offered by the Retailer which is available to the customer if the customer is experiencing financial difficulty; and
- if a customer has applied for assistance under the payment plan, advice of the outcome of that application before a final disconnection notice is given.
Best endeavours to contact customer in circumstances where supply being discontinued
The Amending Regulation requires that both SFCSCS and NSCs require Retailers and DNSPs to use best endeavours to make contact with customers outside of business hours as part of the disconnection process – previously at least one further attempt outside business hours was sufficient. An equivalent provision must also be included in Standard Form Customer Connection Contracts.
Amendment to contract to deal with payment plan
SFCSCs and NSCs must now provide that the Retailer will not discontinue electricity supply for failure to make due payment to the Retailer where the relevant customer has applied for assistance under a payment plan before the date specified in the Disconnection Notice.
Procedure for electing to be supplied under standard form customer supply contracts
Previously small customers with a statutory right to supply at regulated rates could only exercise that right by making a written "election", signed by the customer, on the Standard Retailer’s prescribed form. The more flexible procedure required by the Amending Regulation enables an election to be made "in writing, by telephone or any means acceptable to the supplier".
Information to be provided to small retail customers about NSCs
Prior to the Amending Regulation, Retailers had to provide customers with a copy of a NSC at the time the contract was being entered into. This requirement has been amended to the require that a copy of the NSC and a disclosure notice be provided by the Retailer to the customer within two business days of the contract being entered into.
Variation to method of terminating contract during cooling-off period
NSCs must allow a customer to terminate the contract either orally or in writing within ten days after the date the contract is entered into – previously any such termination was required to be in writing. The NSC must also now require that the Retailer provide the customer with a record of the termination if a customer exercises any such right to terminate a NSC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.