Victoria Bill to Prohibit Unfair Retail Sales Practices in the Energy Market

On 25 May 2021, the Energy Legislation Amendment (Energy Fairness) Bill 2021 (‘the Bill’) was introduced to the Victorian Legislative Assembly by Minister for Energy, Environment and Climate Change Lily D’Ambrosio (‘the Minister’).

The Bill seeks to give effect to reforms that aim to make the energy market simpler, fairer, and more affordable for households and small businesses. In her second reading speech, the Minister outlined that this particular Bill seeks to further implement the Victorian Government’s Energy Fairness Plan ('the Plan'). This Plan involves the following reforms:

• banning of “harmful unsolicited sales practices” such as door-to-door sales and cold-calling; and
• “strengthening penalties for energy companies who wrongfully disconnect customers, including customers reliant on life support equipment”.

Background: Victoria's Recent Energy Reforms

In recent years, Victoria has been implementing a package of energy reforms, and if passed, the Bill would be the next to implement such reforms.

The Minister listed some of the reforms so far, including: 

• introduction of the Victoria Energy Compare website, an independent price comparison service;
• introduction of the Victorian Default Offer for electricity;
• the Utility Hardship Support Package, a $3.7 million COVID-19 response aimed to assist social service organisations in connecting customers who are experiencing hardship with available supports; and
• introduction of the Household Energy Savings Package to assist low-income households with heating and cooling, upgrade energy efficiency for social housing, and allocate one-off $250 Power Saving Bonus payments to concession card holders.

The Energy Legislation Amendment (Victorian Default Offer) Bill 2019 (Vic), which introduced the Victorian Default Offer to Parliament was discussed in an earlier Timebase article.

The Current Bill: Implementing the Energy Fairness Plan

The Bill implements aspects of the Plan, which was developed based on the 2017 Independent Review into the Electricity and Gas Retail Markets in Victoria ('the Review'). The Minister emphasised the importance of the Review's findings, which concluded that the deregulated and privatised Victorian energy retail market did not deliver sufficient benefits to consumers.

The Bill proposes to regulate the energy market to ensure access to a “reliable, sustainable, and affordable energy supply”. The Bill seeks to protect consumers by prohibiting certain “unsolicited high-pressure sales tactics … such as door-to-door selling or cold-calling”. The Minister stated that these tactics should be banned, because these tactics often led to vulnerable people “being signed up to unfair, expensive energy contracts that cause significant financial and emotional distress”.

Furthermore, the Bill seeks to prohibit tactics such as ‘save’ and ‘win-back’ offers. These offers come up in situations where a customer may be trying to end their contract with an energy provider to switch to another, but are instead offered enticements to stay with the provider.

Further Amendments: Criminal Penalties 

The Bill also proposes several amendments to the to Electricity Act 2000 (Vic) and the Gas Industry Act 2001 (Vic), including the introduction of the following criminal penalties of up to $1 million:  

• “Penalties … for energy retailers that knowingly or recklessly arrange the wrongful disconnection of customers, and for energy retailers and relevant exempt persons who disconnect or arrange the disconnection of households in a way that endangers customers on life support equipment”; and
• “Penalties … for licensees who provide false or misleading information to the Essential Services Commission”.

The Minister noted that these penalties are aimed at retailers who wrongfully disconnect customers from their energy supply. The amendments were made with the “most vulnerable” Victorians in mind, particularly those who rely on life support equipment, for whom the disconnection from energy could be life-threatening.

The Minister concluded her second reading speech by stating:

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Energy Legislation Amendment (Energy Fairness) Bill 2021 (Vic) and explanatory materials available from TimeBase's LawOne service.