New measures designed to deal with misconduct in the electricity sector have now passed the Senate.
The new legislation, which will ensure Australian households, businesses and industries get a fair deal on energy, contains three new prohibitions designed to target specific misconduct in electricity retail, contract and wholesale markets.
The laws will ensure that electricity retailers pass on reductions in wholesale electricity prices to consumers and make it easier for smaller energy businesses and new entrants to compete with gentailers.
Where the Australian Competition and Consumer Commission (ACCC) identifies prohibited conduct through its ongoing electricity price monitoring inquiry, the new law makes available a graduated set of remedies and responses, including ACCC-issued public warning notices and infringement notices and court-ordered civil penalties.
For the most serious breaches, the legislation makes available two additional significant remedies:
- Treasurer-issued contracting orders that will require electricity companies to offer electricity financial contracts to third parties
- Federal Court ordered divestiture orders relating to misconduct in the wholesale market
These significant remedies are reserved as a last resort, where this would be proportionate and targeted to the conduct in question and, in the case of a divestiture order, where the order is considered to have a net public benefit.
Importantly, these remedies are only available upon the recommendation of the ACCC, following a legislated process which provides the energy company with an opportunity to respond or remedy its conduct.
The new market manipulation laws will commence six months after Royal Assent, which will provide time for the ACCC to develop enforcement guidelines and for businesses to review their practices to ensure they are compliant.
The legislation will sunset at 1 January 2026, following the conclusion of the ACCC’s inquiry into the National Electricity Market.
The measures in this legislation are part of a plan to deliver a fairer, more affordable and reliable energy system for Australians, which includes:
- Introduction of the Government’s Default Market Offer ‘price safety net’ on 1 July, leading to reductions in both standing offers and high-priced market offers,saving customers who were on the highest standing offers before 1 July, up to $664 in NSW, $481 in SA and $663 in South East Queensland
- Reform of gas pipeline regulation led through the COAG Energy Council and extension of the ACCC gas inquiry to 2025
- Extension of the Consumer Data Right to energy, to make it easier for consumers to switch energy providers to get a better deal
- Progression of the Underwriting New Generation Investments program to improve competition and reduce wholesale prices
- Establishing a new $1 billion Grid Reliability Fund, to support Government investment in new energy generation, storage and transmission infrastructure
The Bill will now return to House of Representatives for final passage.