Monitoring whether retailers are providing best offer messages on customers’ energy bills.
Compliance monitoring - energy billing practices
One of our compliance and enforcement priorities in 2022-23 is ensuring that retailers are informing customers about whether they are on their best offer when purchasing energy.
We are conducting a proactive compliance monitoring program focusing on whether retailers are complying with their obligation to provide customers with best offer messages on bills.
Step 1: Information gathering
We obtained information from 17 retailers who collectively provide retail services to most Victorian residential energy consumers about their best offer message practices.
Step 2: Analysis and response
We have been reviewing the information provided by the retailers. We have identified some instances of non-compliance, several areas for improvement and some better practice examples.
Where non-compliance has been identified, we are addressing this in line with our Compliance and Enforcement Policy. This ranges from working with retailers to remediate issues and, in more serious cases, potential enforcement action.
Step 3: Publication
Our analysis has highlighted that to improve compliance across the industry, there may be a need for the commission to provide guidance regarding some aspects of the best offer obligations. In this respect, we are drafting a guideline, which will include clarifications as well as better practice examples.
Following the publication of this guideline on our website, we will work with retailers to improve their compliance.
Our intended outcome is to assess whether retailers are complying with best offer obligations and to improve compliance across the industry. Depending on our findings, the following potential outcomes may result from this compliance monitoring program:
- publication of guidelines or best practice examples
- developing and working through remediation plans with retailers
- industry-wide engagement and education
- compliance and enforcement action.
Best offer obligations
Energy retailers are required to regularly display information on customers’ bills telling them whether or not they are receiving their retailer’s best offer. These requirements are outlined in clauses 108–111 of the Energy Retail Code of Practice (the best offer obligations).
The best offer obligations were introduced in 2019 as part of major reforms that were intended to help customers navigate the energy retail market. They promote transparency in the market by keeping customers informed of whether they could access a better offer from their retailer. This includes how much money could be saved by switching to a better offer.
Best offer obligations overlap with our other compliance and enforcement priorities. In particular:
- our enduring priorities of protecting vulnerable consumers
- ensuring customers are provided with adequate assistance when experiencing payment difficulties.
If retailers fail to comply with best offer obligations, customers may not be aware:
- of their option to choose a cheaper offer from their retailer
- that offers from other retailers are available on the government comparison website Victorian Energy Compare.
For customers who are not on their retailer’s best offer, it may mean staying on a more expensive plan for longer, resulting in higher bills. This affects all Victorian customers, but higher bills may also contribute to payment difficulty and can exacerbate vulnerability being experienced by customers.