AER consults on the Minimum Disconnection Amount

AER – Australian Energy Regulator

May 23
AER consults on the Minimum Disconnection Amount

On 23 May 2016, the Australian Energy Regulator (AER) published a consultation letter relating to its current review of the Minimum Disconnection Amount (r116 National Energy Retail Rules).

This rule determines that a retailer cannot disconnect a small energy customer for non-payment where the amount owing is less than an amount approved by the AER and the customer has agreed to repay that amount.  The current amount of $300 (incl. GST) was approved by the AER in April 2012 and applies to both gas and electricity services (in all jurisdictions that have adopted the Retail Law and Rules).

The AER is seeking to retain the $300 limit and has initiated a review of the Minimum Disconnection Amount and has published a consultation letter seeking views from stakeholders.  Issues considered are:

  • changes in estimated annual energy bills since the minimum disconnection amount has been in effect to understand if the minimum amount approved by the AER has been eroded over time (as/if average bills have risen);
  • rates of disconnection, are they increasing or decreasing in relation to the MDA;
  • complaint information about disconnections; and
  • retailers’ levels of compliance with the MDA.

The AER will source information in response to the above questions from its Annual Reports on the Performance of the Retail Energy Market and has also asked for written responses from key stakeholders by 20 June 2016.