The National Energy Retail Law (Queensland) Bill 2014 was passed by the Queensland Parliament on 10 September 2014 (NERL). This law will shift Queensland to a national framework that will regulate the sale and supply of energy (electricity and gas) to consumers from 1 July 2015.
Broadly, the intention of the NERL is to improve consistency between the States and to improve customer protections. Queensland follows New South Wales, South Australia and Victoria to have adopted the NERL.
It also means that responsibility for monitoring and regulating the NERL will shift from the Department of Energy and Water Supply in Queensland to the Australian Energy Regulator (AER).
What this means for you…
Following the passage of the NERL in Queensland, suppliers of energy (including on-suppliers) will need to take steps to comply with the NERL. This may involve:
- making an assessment of and applying for any necessary exemptions to the AER;
- reviewing supply contracts and practices to ensure they comply with the NERL;
- understanding the customer protection requirements of the NERL and how they differ from the current position.
Details of the new National Energy Retail Law Act
The NERL, as adopted in Queensland, replicates the NERL contained in a Schedule to the National Energy Retail Law (South Australia) Act 2011. It will:
- incorporate a detailed electricity sales framework and controls;
- impose a price comparison obligation;
- place regulatory obligations on retailers to operate programs to help customers experiencing hardship;
- establish a comprehensive "exempt seller" framework that gives small customers in 'on-supply' situations broadly equivalent protections to other customers;
- include processes and requirements around billing and credit management; and
- apply a National Connections Framework that sets out processes for new connections including response times to customer requests.
Important differences between the Queensland NERL and the national scheme
The Queensland Act will not completely adopt the National Energy Retail Law in light of the particular circumstances of the Queensland electricity market. The key derogations from the NERL are:
- existing obligations on Ergon Energy and Origin Energy to deliver the Uniform Tariff Policy to large customers will continue. This means that large customers on Ergon's distribution network will still receive the standard large customer retail price;
- expressly requiring retailers to offer customer retail services to large customers where they are the financially responsible retailer for the premises, so customers can continue to access supply despite existence of weak competition;
- providing specialised standard retail and connection contracts for card-operated meter customers that set out clear rights and obligations within technical limitations of the service; and
- still restricting retail competition in some areas where technical limitations exist or where there is no economic benefit to do so.
Electricity Competition and Protection Act also passed
This Act was passed by Parliament on 10 September 2014 and will amend the Electricity Act 1994 (Qld) on a date fixed by proclamation to complement the shift to the NERL. It will:
- remove retail price regulation in South East Queensland. The Minister will no longer be able to decide regulated retail electricity prices within "Energex's distribution area" under the Electricity Act from 1 July 2015. This means that retail electricity prices in South East Queensland are to be regulated by market competition;
- establish a market monitoring regime. This will be done by allowing the Minister to direct the Queensland Competition Authority to undertake a market monitoring function and to publish an annual market comparison report about electricity prices in SEQ. If market settings in SEQ prove ineffective, the Minister has the power to reintroduce price controls; and
- retain price controls in regional Queensland. For general business supply, the remaining applicable tariff will primarily be Tariff 20 and 22. Tariffs 11 and 12 will continue to apply for residential customers in regional Queensland.