Stronger penalties demand energy businesses prioritise compliance with the law

A transmission tower

New and stronger penalties introduced under the national energy laws will provide a greater incentive for businesses to comply with laws designed to protect Australian electricity and gas consumers.

This is an Australian Energy Regulator News Release

The Australian Energy Regulator (AER) Chair Clare Savage said, “Consumers expect energy companies to play by the rules that are there to protect them, and if those rules are broken, the penalty must reflect the seriousness of the breaches in order to provide a deterrent.

“The new penalty regime aligns energy laws more closely with other regimes for consumer protection and market regulation, and provides a significant scaling up of the penalties available to the courts and the AER.

“The increased maximum penalties will allow the courts to impose penalties that are proportionate to the harm done by a business that breaches the law. We expect the new penalties to incentivise energy businesses to devote even greater effort to comply with laws to protect consumers.”

In the most serious cases, the AER will be able to seek penalties of up to $10 million (or more for large companies) for alleged breaches of the energy laws under new provisions commencing today. There are three tiers of penalty provisions, reflecting three levels of severity of breaches.

Other key changes to the AER’s powers under the new laws include the ability to:

  • require witnesses to attend for oral examination during investigations
  • seek court orders requiring compliance with compulsory notices to provide information or documents
  • seek orders that a person who has breached certain provisions of the National Energy Laws to perform a service for the benefit of the community or publish an advertisement about the breach.

“A regulator investigating illegal misconduct should be able to compel those involved to answer questions where necessary. Previously, we have been unable to do this. These new powers will better equip us to do our job to protect consumers, while incentivising compliance,” said Ms Savage.

The criminal offence penalty for failing to comply with a notice, or for providing false or misleading information to the AER or Australian Energy Market Operator, has also increased to $6,300 for an individual or $31,500 for a corporation.

Increases to penalties apply to conduct from 29 January 2021 onwards. Oral examination notices can be issued from 29 January 2021 and can cover previous conduct.

About the AER

The AER’s commitment is to make energy consumers better off, now and in the future. Our objectives are to:

  1. Protect vulnerable consumers while enabling consumers to participate in energy markets
  2. Effectively regulate competitive markets primarily through monitoring and reporting, and enforcement and?compliance
  3. Deliver efficient regulation of monopoly infrastructure while incentivising networks to become platforms for energy services
  4. Use our expertise to inform debate about Australia’s energy future and support the energy transition.