Small customer: Under section 6 of the NERL, a small customer is initially defined, but clause 4 of this regulation sets the upper consumption threshold for business customers at 100 MWh per year for electricity and 1,000 gigajoules per year for gas. Customers below these thresholds are small customers and are entitled to standard retail contracts, hardship provisions, and the specific protections and modifications in this regulation. Residential customers are small customers by default without reference to a threshold.

Local area retailer: Clause 5 designates specific retailers by ACN as the local area retailer for particular distribution systems. For gas, Origin Energy LPG Ltd, AGL Retail Energy Ltd together with AGL Sales Pty Ltd, ActewAGL Retail, and AGL Sales Pty Ltd are assigned to networks including Australian Gas Networks, Jemena Gas Networks, ActewAGL Distribution, and Allgas Energy. For electricity, Origin Energy Electricity Ltd is assigned to Essential Energy and Endeavour Energy systems, EnergyAustralia Pty Ltd to Ausgrid, and ActewAGL Retail to ActewAGL Distribution. These retailers have the obligation to supply small customers in their areas under the NERL.

Market Monitor: IPART is prescribed as the Market Monitor under clause 8 for the purposes of Part 9A of the NERL. The Market Monitor conducts special reviews of the retail energy market in NSW. It may act informally, is not bound by the rules of evidence, may hold hearings (public or private), must consult with retailers, and may call for written submissions (clause 9). The Chairperson may issue notices requiring information, documents, or attendance (clause 10). Confidential information provided on a confidential basis must not be divulged except with consent, where not confidential, or to a member or officer; the Market Monitor may divulge such information in its report after notifying the provider, and may give directions prohibiting or restricting divulging, contravention of which is an offence carrying a maximum penalty of 100 penalty units (clause 11). Offences for non-compliance with notices, false or misleading information, or hindering the Market Monitor also carry a maximum penalty of 100 penalty units, with a reasonable excuse including self-incrimination (clause 12).

Approved distributor limitation of liability clause: Clause 7 sets out a standard clause that must be used in agreements varying or excluding the operation of section 316(1) of the NERL for small customers. The clause has two subclauses: (1) the distributor is not liable for indirect, economic, special or consequential losses from failure to supply due to bad faith or negligence; (2) liability for other losses from failure to supply in a calendar year is limited to the lesser of repair/replacement cost or $5,000. This clause cannot be varied; distributors may include no other limitation of liability for breach or negligence in negotiated connection contracts with small customers. Rule 83 of the National Energy Retail Rules is modified accordingly, and Schedule 2 clause 8 is modified to permit its inclusion and to adjust the wording.

Small customers in NSW (residential and business customers below the consumption thresholds in clause 4) are directly affected by the modifications to the National Energy Retail Rules. They benefit from the prohibition on charges for paper bills or paying at Australia Post (clause 13), the restriction on early termination charges (clause 14), mandatory waiver of late payment fees in specified circumstances (clause 15), mandatory waiver of early termination charges for vulnerable customers (clause 16), and the ability to agree to shorter notice periods for planned interruptions (clause 17). These protections apply to small customers purchasing energy under market retail contracts, and in some cases also to standard retail contracts.

Energy retailers operating in NSW must adjust their contracting, billing, and collection practices. They must ensure that market retail contracts do not impose early termination charges except as tightly limited by clause 14 (new rule 49A). They must program their systems to waive late payment fees when a customer receives the Low Income Household Rebate or Medical Energy Rebate, when a bill is under ombudsman consideration, when a payment plan is in effect, when any part of a bill is paid by EAPA voucher, or when the retailer knows the customer has sought help from a participating community welfare organisation (clause 15, new rule 73(2)). They must also waive early termination charges for hardship customers, customers who received those rebates on the last bill, or customers who used EAPA vouchers (clause 16, new rule 73A). Retailers must also comply with the price comparator provisions declared applicable by clause 6 and with any special reviews conducted by the Market Monitor under clauses 8-12.

Distributors such as Essential Energy, Ausgrid, Endeavour Energy, Jemena Gas Networks, and others are affected by clause 7, which compels them to use the approved distributor limitation of liability clause in any agreement with a small customer that varies or excludes section 316(1) of the NERL, and prohibits any other limitation of liability. Distributors must also comply with clause 17 on planned interruptions, including retaining agreements for at least two years. Exempted distributors like Essential Energy and cross-border suppliers have conditions attached to their exemptions.

IPART, as the Market Monitor, acquires specific functions under Part 9A of the NERL as supplemented by clauses 8-12, including the power to compel information, hold hearings, and refer offences. The AER is given monitoring and enforcement functions for cross-border exemptions under clause 27, but only where the NERL applies in the other jurisdiction.

Specific exempted entities: Essential Energy, Sunset Power International, AGL Macquarie, Ausgrid, persons with small generating systems up to 30 MW, cross-border suppliers (Ergon Energy Queensland, Allgas Energy, Ergon Energy Corporation, Australian Gas Networks (Albury), ActewAGL Distribution), and the Lord Howe Island Board each have tailored exemptions with conditions that must be met. The Lord Howe Island Board must provide connection and retail services on request under a contract. Community welfare organisations that issue EAPA vouchers are indirectly affected because their involvement triggers late fee waiver and early termination charge waiver obligations on retailers.

Duties imposed by this regulation are precise and often create mandatory conduct regardless of contractual terms. Retailers must not impose charges for issuing a paper bill (instead of or in addition to an electronic bill) or for a small customer paying a bill in person at an Australia Post outlet (clause 13, new rule 35A). This is an absolute prohibition. Retailers must ensure that any term of a market retail contract providing for an early termination charge or a charge payable on early termination of a fixed benefit period has no effect except in two circumstances: (a) recovery of reasonable costs incurred for installing a solar photovoltaic system, battery storage system, digital meter, or associated equipment when the customer terminates a fixed term retail contract or fixed benefit period early; or (b) recovery of a charge payable where a customer terminates a fixed benefit period early if the benefit includes a fixed tariff or fixed charge for energy, the contract details the amount or calculation, and the charge is a reasonable estimate of costs (excluding lost supply or lost profits) (clause 14, new rule 49A). This is stated to be a minimum requirement applying to small customers under market retail contracts.

Retailers must waive late payment fees in five enumerated circumstances (clause 15, new rule 73(2)): (a) if the contract is for electricity or dual fuel and the customer receives the Low Income Household Rebate or Medical Energy Rebate; (b) if that bill or another bill is subject to a matter being considered by the energy ombudsman; (c) if the bill is subject to an instalment payment plan; (d) if any part of the bill is paid by an EAPA voucher; or (e) if the retailer is aware that the customer has sought assistance from a participating community welfare organisation that issues EAPA vouchers. This duty is triggered regardless of whether the retailer would otherwise be entitled to the fee.

Retailers must waive any early termination charge (however described) payable under a market retail contract for electricity or a dual fuel contract with a small customer if the customer is a hardship customer, or at the time of the last bill before termination received the Low Income Household Rebate or Medical Energy Rebate, or paid any part of that last bill by an EAPA voucher (clause 16, new rule 73A). However, the retailer is not required to waive recovery of the monetary costs of any up-front inducements offered to induce entry into the contract, calculated on a pro rata basis according to the period the contract was in force. This preserves the retailer's ability to recoup inducements but not the termination charge itself.

Distributors must, if they wish to vary or exclude the operation of section 316(1) of the NERL in an agreement with a small customer, use only the approved distributor limitation of liability clause set out in clause 7(1). For standard connection contracts, the proposed contract must include that clause. In negotiated connection contracts with small customers, the distributor may include the approved clause but must not include any other limitation of liability for breach of contract or negligence (clause 7(3)). Distributors must retain a copy of any agreement varying the notice period for planned interruptions for at least two years (clause 17(6)). A person must not contravene a confidentiality direction given by the Market Monitor (clause 11(5)), must comply with notices to provide information, documents, or attend hearings (clause 12(1)), must not give false or misleading information (clause 12(3)), and must not hinder the Chairperson or any member in exercising functions (clause 12(4)), each subject to a maximum penalty of 100 penalty units and the excuse of self-incrimination for natural persons.

The Lord Howe Island Board must provide customer connection services and customer retail services to a person who requests them, under a contract (clause 28).

Rights include: small customers may agree in writing to shorter notice periods for planned interruptions, and must be informed of their right to at least four business days notice if the period is not varied (clause 17). Exempted entities have the right to operate outside the NERL for specified activities, subject to conditions. Persons providing information to the Market Monitor have the right to have confidential information protected subject to exceptions (clause 11). The AER has the right to monitor and enforce conditions of cross-border exemptions (clause 27).

This regulation creates specific criminal offences, all carrying a maximum penalty of 100 penalty units (clauses 11(5) and 12). Contravening a direction given by the Market Monitor under clause 11(4) prohibiting or restricting the divulging of information provided in connection with a special review is an offence. A person must not refuse or fail, without reasonable excuse, to comply with a notice served under clause 10 requiring information, documents, or attendance at a hearing. Similarly, a person must not refuse or fail, without reasonable excuse, to answer a question required by the Chairperson at a meeting or hearing. Reasonable excuse includes the ground that complying with the notice or answering the question might tend to incriminate a natural person or make the person liable to any forfeiture or penalty (clause 12(2)). This self-incrimination privilege applies only to natural persons, not corporations.

It is also an offence to give to the Market Monitor, whether orally or in writing, information that the person knows to be false or misleading in a material particular unless the person informs the Market Monitor of that fact (clause 12(3)(a)). The same applies to giving evidence at a hearing that the person knows to be false or misleading in a material particular (clause 12(3)(b)). Hindering, obstructing, or interfering with the Chairperson or any other member of the Market Monitor in the exercise of functions for a special review is also an offence (clause 12(4)). All these offences carry the same maximum penalty of 100 penalty units. In NSW, a penalty unit is currently $110 (Crimes (Sentencing Procedure) Act 1999, section 17), so the maximum fine is $11,000 per offence.

Enforcement of these offences would typically be by prosecution in a local court, likely initiated by the Market Monitor or relevant authority. The regulation does not specify who prosecutes, but the Market Monitor (IPART) may refer matters to the Director of Public Prosecutions or other enforcement body.

Beyond the specific offences in Part 2, the modifications to the National Energy Retail Rules in Part 3 are enforceable through the compliance and enforcement mechanisms under the NERL itself. For example, a contravention of rule 35A (prohibition on charging for paper bills) or rule 49A (restriction on early termination charges) would be a breach of the Rules, which the AER may enforce through infringement notices, court proceedings, or other remedies available under the NERL. The regulation does not create separate penalties for those modifications; the AER's existing powers under the NERL apply.

The exemptions in Part 4 are conditional. Breach of a condition may result in the exemption being revoked or varied by the Minister, or may render the exempted entity subject to the full NERL. For cross-border exemptions, the AER has specific functions to monitor compliance with conditions and may exercise the same powers as it has under the NERL (clause 27). This could include issuing notices, conducting investigations, and seeking court orders for non-compliance. The AER's enforcement powers are available only if the NERL applies in the other jurisdiction (clause 27(1)). The Lord Howe Island Board exemption is subject to conditions under clause 28; failure to provide connection or retail services on request could lead to loss of the exemption or other action by the Minister.

Non-compliance with the approved distributor limitation of liability requirements (clause 7) could be addressed through contract law or through the AER's supervision of connection contracts. The regulation does not create a specific penalty for including a non-approved limitation clause, but doing so may render the term void and expose the distributor to liability under section 316(1) of the NERL.

This regulation sits within the legislative framework established by the National Energy Retail Law (Adoption) Act 2012 (NSW) and the National Energy Retail Law (NSW) (referred to as the National Law). Clause 3 defines the National Law as the National Energy Retail Law (NSW) and the Act as the Adoption Act. The regulation is made under the Adoption Act and is subordinate to both that Act and the National Law. Many clauses expressly state they are made for the purposes of specific sections of the National Law: clause 4 for section 6 (small customer threshold), clause 6 for sections 62 and 63(b) (price comparators), clause 7 for section 316A(3)(a) (distributor liability limitations), clause 8 for Part 9A (Market Monitor). The regulation thus fills in details that the National Law leaves to regulation.

Part 3 of the regulation directly modifies the National Energy Retail Rules (the Rules), which are made under the National Law. Clause 13 inserts new rule 35A into the Rules; clause 14 replaces rule 49A entirely; clause 15 adds a new subrule (2) to rule 73; clause 16 inserts new rule 73A; clause 17 inserts new rule 90A; clause 18 modifies Schedule 2 clause 6.6. These modifications have the same legal force as the Rules themselves and prevail over any inconsistent contractual terms. For example, rule 35A overrides any term in a customer retail contract that purports to charge for paper bills or Australia Post payment. Rule 49A renders void any contractual term providing for an early termination charge beyond the allowed exceptions.

Part 4 grants exemptions from the National Law itself. This means that for the exempted activities, the entity is not subject to the NERL or the Rules. However, other laws may apply. Clause 19(3) provides that the Electricity Supply Act 1995 and its regulations as in force before the 2012 amendments continue to apply to Essential Energy's existing retail contracts entered into before 1 July 2013. Clause 23 exempts small generating systems from the NERL but does not exempt them from licensing requirements under the Electricity Supply Act (the distributor must hold a licence under that Act or be exempted). Clause 24 includes a note that Ergon Energy Queensland must comply with the NSW Social Programs for Energy Code made under the Electricity Supply (General) Regulation 2014. Cross-border exemptions (clauses 24-26) require compliance with the energy retail law of the home jurisdiction (Queensland NERL, Victorian Gas Industry Act 2001, ACT NERL) instead of the NSW NERL for the exempted supply. Clause 27 gives the AER functions to monitor and enforce those conditions, but only if the NERL applies in the other jurisdiction; this creates a cross-jurisdictional enforcement link.

Clause 7(5) preserves the operation of any determination made under an energy ombudsman scheme established under section 96B of the Electricity Supply Act 1995, ensuring that the approved distributor limitation of liability clause does not override ombudsman rulings. The Interpretation Act 1987 applies to the interpretation of the regulation (clause 3 note). The savings provision in clause 29 ensures that any act, matter, or thing that had effect under the repealed 2013 regulation continues under this regulation, providing continuity for exemptions, appointments, and other administrative actions.

This regulation is the National Energy Retail Law (Adoption) Regulation 2020. It commenced on 1 September 2020 and was required to be published on the NSW legislation website (clause 2). It replaces the National Energy Retail Law (Adoption) Regulation 2013, which was repealed on 1 September 2020 by operation of section 10(2) of the Subordinate Legislation Act 1989 (see note to clause 2). The 2020 regulation was made as a re-publication of the predecessor instrument, and the headings of most clauses include a bracketed note drawing attention to the equivalent or comparable provision of the 2013 regulation (for example, clause 4 is marked 'cf 2013 reg cl 4'). These comparison notes are included for convenience only and do not form part of the regulation (clause 3(2)). The regulation does not contain any internal amendment provisions; it is the principal subordinate instrument under the Adoption Act. Any subsequent amendments would be made by amending regulations published separately. The regulation has no sunset date appearing in the text, but as a statutory instrument it remains subject to periodic review under the Subordinate Legislation Act. The Part 3 modifications to the National Energy Retail Rules carry forward existing NSW-specific rules that have been in place since at least the 2013 regulation, including the prohibitions on paper bill charges, early termination charges, and late payment fee waivers. The exemption provisions in Part 4 similarly carry forward exemptions for legacy contracts (clauses 19-22), small generating systems (clause 23), and cross-border suppliers (clauses 24-26). Clause 8, prescribing IPART as the Market Monitor, and clauses 9-12 on the Market Monitor's powers and offences were also present in the 2013 regulation (as clauses 8A-8E). The 2020 regulation re-enacts these provisions without substantive change as indicated by the 'cf' references. The savings provision in clause 29 ensures that any act, matter, or thing under the 2013 regulation continues to have effect under the 2020 regulation, so no gap or disruption occurred upon repeal and re-enactment. This is a standard approach for subordinate legislation that is remade upon expiry.

The source text of this regulation does not refer to any litigation or court decisions. No cases are cited in the clauses, notes, or headings. The regulation itself does not contain a litigation history. As a subordinate instrument, its interpretation may arise in proceedings concerning the National Energy Retail Law or the National Energy Retail Rules, but no specific cases are recorded in the text. The 'cf' notes compare provisions to the 2013 regulation, but those are legislative references, not case references. The regulation's provisions on the approved distributor limitation of liability clause (clause 7) could potentially be the subject of dispute, for example, whether a particular clause in a connection contract is "to the effect of" the approved clause. Similarly, the meaning of "reasonable estimate of the costs" in clause 14(3)(c) for early termination charges could be litigated. The market monitor's powers (clauses 8-12) might be challenged on procedural fairness grounds, but no such challenges are referenced. The cross-border exemptions (clauses 24-26) may give rise to questions about the interaction between NSW law and the law of the other jurisdiction, but again no cases are mentioned. The absence of recorded litigation does not mean no disputes have occurred; they may have been resolved through energy ombudsman schemes (preserved by clause 7(5)), through AER compliance action, or through private settlement without reported decisions. Practitioners should be aware that the regulation is relatively new (commenced 1 September 2020) and that the preceding 2013 regulation may have generated some tribunal or AER determinations, but those are not incorporated into this text. The savings provision (clause 29) ensures continuity of any existing matters, so pre-2020 decisions under the 2013 regulation may remain relevant to interpretation. The regulation's provisions on waiver of late payment fees and early termination charges (clauses 15 and 16) are prescriptive and may be enforced by the AER through infringement notices or court proceedings, but no such enforcement actions are recorded in the regulation. Overall, the regulation appears to have operated without significant reported litigation in its first years, but its interaction with the broader NERL framework means that case law on the NERL (such as decisions on the meaning of 'small customer' or 'hardship customer') would be directly relevant.

Several provisions contain subtleties and potential traps for the unwary. First, the definition of small customer for business customers uses "a rate of 100MWh per year" and "a rate of 1,000 gigajoules per year" (clause 4). This is a rate, not necessarily actual consumption in a given year. A business customer whose typical consumption is below this threshold at the time of contracting is a small customer and entitled to protections. However, if consumption later exceeds the rate, it is unclear whether the customer ceases to be a small customer. The NERL section 6 may provide guidance, but the regulation does not address this.

Second, the early termination charge prohibition in clause 14 (new rule 49A) applies only to market retail contracts for small customers. Standard retail contracts are governed by separate provisions in the NERL. However, rule 49A(5) states it is a minimum requirement applying to small customers under market retail contracts, implying it does not apply to standard retail contracts. Retailers must therefore check which type of contract they are using.

Third, clause 14(2) allows recovery of reasonable installation costs for a solar photovoltaic system, battery storage system, digital meter, or associated equipment when a customer terminates a fixed term retail contract or fixed benefit period early. But only those specific items are listed. If a retailer provides other equipment (e.g., smart home devices, hot water systems) as an inducement, its costs cannot be recovered as early termination charges under this exception. The retailer may be able to recover those costs as up-front inducements under clause 16(3) when the termination charge itself is waived, but careful delineation is needed.

Fourth, the late payment fee waiver in clause 15(2)(a) applies "if the contract is a contract for electricity or a dual fuel contract and the customer receives the Low Income Household Rebate or the Medical Energy Rebate." The clause does not require that the rebate applies to the particular bill. If a customer is a known recipient of the rebate, every late payment fee must be waived, even on bills not otherwise related to the rebate. This could impose a significant ongoing compliance burden.

Fifth, the waiver of early termination charges under clause 16(2) applies to hardship customers and recipients of relevant rebates or EAPA vouchers. But retailer obligations respecting hardship customers are already extensive under the NERL. The regulation adds a further layer of protection, but note that clause 16(3) preserves the retailer's right to recover the monetary costs of up-front inducements on a pro rata basis. This means a retailer can claw back inducements even while waiving the termination charge, but must calculate the pro rata amount based on the period the contract was in force. This calculation can be complex.

Sixth, the approved distributor limitation of liability clause (clause 7) must be used "in or to the effect of" the set clause. Any variation may be invalid. Distributors must be careful not to include any other limitation of liability for breach or negligence in negotiated connection contracts with small customers (clause 7(3)). This is a strict prohibition; even additional clauses that partially limit liability are likely void.

Seventh, the cross-border exemption in clause 24 for Ergon Energy Queensland includes a note requiring compliance with the NSW Social Programs for Energy Code. This is not an operative part of the clause but indicates that the exemption does not absolve the supplier from other NSW obligations. The interaction between the home jurisdiction law and NSW codes may create overlapping compliance requirements.

Eighth, the Lord Howe Island Board exemption (clause 28) requires the Board to provide connection and retail services on request under a contract, but does not specify the content of the contract or any minimum protections. Customers on Lord Howe Island may have fewer rights than mainland small customers. TheBoard is exempted from the NERL generally, so standard customer protections such as hardship provisions, dispute resolution, and payment plan requirements may not apply unless included in the contract.

Ninth, the savings provision (clause 29) provides that any act, matter, or thing under the 2013 regulation continues. This includes exemptions and appointments. However, if the 2020 regulation contains substantive differences from the 2013 reg (e.g., changes to the approved limitation clause or thresholds), the savings provision may not preserve rights or obligations that are inconsistent with the new provisions. Practitioners should compare the old and new versions carefully.

For retailers, compliance requires a systematic review of contracts, billing systems, and customer-facing policies. The first step is to ensure accurate classification of business customers using the thresholds in clause 4. Retailers must then audit all market retail contracts for small customers to identify and remove any charges for paper bills or paying at Australia Post (clause 13). Billing systems should be programmed to prevent such charges from being applied. For early termination charges, retailers must revise contract terms so that charges are permitted only for the limited circumstances in clause 14: recovery of reasonable installation costs for solar PV, battery, digital meter, or associated equipment when the customer terminates a fixed term or fixed benefit period early; or a charge for early termination of a fixed benefit period if the benefit includes a fixed tariff or fixed charge, the contract details the amount or calculation, and the charge is a reasonable estimate of costs (not including lost supply or lost profits). Retailers should document how the cost estimate was calculated and ensure that contracts with fixed benefit periods clearly disclose the charge and method of calculation.

Retailers must implement automated waiver rules for late payment fees. Systems should flag customers who receive the Low Income Household Rebate or Medical Energy Rebate (by checking against government datasets or customer declarations) and automatically waive any late fee. Similarly, if a bill is the subject of an ombudsman case, if a payment plan is in place, if any part of the bill is paid by EAPA voucher, or if the retailer is aware the customer has sought help from a community welfare organisation that issues EAPA vouchers, the late fee must be waived. Retailers should integrate with the EAPA voucher system and train customer service staff to record when a customer mentions seeking help from a community welfare organisation.

For early termination charges waiver (clause 16), retailers must waive the charge for hardship customers (as defined in the NERL), for customers who received the rebate or used EAPA vouchers on their last bill. However, retailers may recover pro rata up-front inducements. Retailers should maintain records of inducements offered at contract inception and calculate the pro rata amount based on the period the contract was in force. The early termination charge itself must be waived; the retailer cannot offset the charge against the inducement recovery. Separate billing or adjustment may be needed.

Distributors must ensure that any agreement with a small customer that varies or excludes section 316(1) of the NERL uses only the approved distributor limitation of liability clause set out in clause 7(1). For standard connection contracts prepared under section 75 of the NERL, the proposed contract must include that clause if it varies section 316(1). For negotiated connection contracts, distributors may include the approved clause but must not include any other limitation of liability. Distributors should review contract templates and negotiate accordingly. For planned interruptions, distributors may agree to shorter notice periods in writing with customers, must inform the customer of the right to at least four business days notice if the period is not varied, and must retain the agreement for at least two years (clause 17).

Entities relying on exemptions must strictly comply with the conditions. Essential Energy must ensure that exempted existing retail contracts are not varied unless the Minister determines (clause 19). Small generator owners must ensure their system has a capacity of 30 MW or less and is connected via a single connection point to a distributor licensed under the Electricity Supply Act (clause 23). Cross-border suppliers must supply consistently with their home jurisdiction law and must comply with any applicable NSW codes (e.g., Social Programs for Energy Code for Ergon). They should maintain records demonstrating compliance. The Lord Howe Island Board must establish a standard contract for connection and retail services and ensure it can accept and fulfil requests.

All affected parties should keep abreast of any subsequent amendments to this regulation and to the National Energy Retail Rules.