Australian Energy Businesses Fork Out Millions In Penalties

The mid-year compliance and enforcement update from the Australian Energy Regulator reveals energy businesses paid $4.38 million in penalties between July and December last year.

The AER is tasked with monitoring and enforcing compliance with national energy laws and rules. Wholesale energy, energy networks and retail energy market regulation fall within its remit.

During the July – December period, three court decisions resulted in $3.8 million in penalties and 29 infringement notices were issued with a total value of $580,000.

Among the court orders, EnergyAustralia was ordered to pay penalties of $1.5 million after it was determined it had wrongfully disconnected eight customers experiencing financial hardship, and failed to extend legal protections to them.

Four AGL subsidiaries were to pay a total of $1.3 million in penalties after they failed to submit required retail market performance data to the AER.

Snowtown 2 was ordered to pay $1 million for failing to provide critical information to the Australian Energy Market Operator (AEMO) and South Australian transmission network service provider ElectraNet. This was one of the first decisions following AER’s investigation into the Black System Event in South Australia in September 2016 that involved a major blackout across most of the state. However, it should be noted that the event wasn’t triggered by wind power, but powerful winds.

Metering-Related Penalties

Included in the AER’s compliance and enforcement priorities for 2020-21 is metering – which has been a bit of a thorny topic in the past when it comes to solar installations.

Back in December 2017, responsibility for electricity meters in the National Energy Market (NEM) shifted from Distributed Network Service Providers (DNSPs) to electricity retailers as part of the Australian Energy Market Commission’s (AEMC’s) controversial “Power of Choice” reforms.

The transition turned out to be a dog’s breakfast, particularly for households that had installed solar panels and required a meter changeover, but generally there has been improvement since. However, there have been some particularly serious cases in relation to faulty meters where the retailer has been incredibly slow in attending to the issue.

Among the businesses recently pinged, three AGL retailers paid a total of $160,000 in penalties for allegedly not fixing faulty electricity meters promptly. In one case, in took more than 18 months just to get to the stage of a metering coordinator being appointed to the case.

Breaches of various rules and regulations could become even costlier for energy business going forward. In late January this year, the AER was granted increased penalties – up to $10 million or even more for large companies – plus other changes expanding its powers.

The full AER compliance and enforcement update July-December 2020 can be viewed here.

Just a note on electricity meter issues for owners of solar power systems (and everyone else for that matter) – the first stop for complaints about tardy service in having the problem addressed is your energy retailer and failing any timely action there, contact your state’s energy ombudsman.