Reform of the Australian Energy Regulator Civil Penalty Regime

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Tougher penalties

The Statutes Amendment (National Energy Laws) (Penalties and Enforcement) Bill 2020 is currently before the SA Parliament. The Bill will amend the  National Electricity Law, National Gas Law and National Energy Retail Law (National Energy Laws) and introduce tougher penalties for non-compliance by energy businesses.

The amendments bring the National Electricity penalty regime all into conformity with the penalty regime under Australian Consumer Law. There are three tiers of penalties that can be applied. The first tier attracting penalties of ~$10 million, the second attracting penalties of  ~$1.45 million, and the third of ~$145,000.

The tests that are applied focus on consumer detriment, market impact, market participant behaviour, the security and reliability of supply, and the administration of the market.

Examples of Type 1 Consumer Harm is conduct resulting in:

  •  a risk to public safety
  • death or serious injury to a person
  • reduction of consumers’ fundamental right to access essential electricity and gas services
  • financial harm or economic loss for consumers (large and small)
  • a failure to deal with hardship (or other vulnerable) customers appropriately

Examples of Type 2 Consumer Harm is conduct resulting in:

  • consumers not being informed or incorrectly informed of their rights
  • failure to provide consumers with supplementary services
  • inappropriate disclosure of consumer data
  • a failure to give proper notice of tariffs and charges
  • failure to comply with any rules regarding fees and charges
  • failure to comply with pre-contractual duties of retailers or distributors
  • failure to comply with requirements regarding estimation, content and issuing of bills
  • failure to comply with requirements regarding security deposits and billing disputes

The Energy Council has invited feedback on the following questions:

  1. Do the Decision Matrix and Concept Table provide sufficiently clear direction about which penalty tier to apply?
  2. Are the key objectives of the National Energy Objectives reflected in the Decision Matrix and Concept Table?
  3. Do you have any suggestions that may improve the Decision Matrix or Concept Table?
  4. Are the Decision Matrix and Concept Table applied consistently in the Classification of Tiers?
  5. Are there any proposed classifications of particular civil penalty provisions that you strongly agree or strongly disagree with? If so, which provision/s and why?
  6. Are there other matters related to the civil penalty regime you would like us to take into consideration?

Feedback can be provided by 10 August 2020. More information is available here.

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