Ten million reasons to ensure compliance with your electricity on-supply exemption conditions

The Australian Energy Regulator (AER) has often been criticised as being a “toothless tiger” when it comes to enforcement. Recent changes to the penalties and enforcement regime applicable to electricity on-suppliers in Queensland provide the AER with the means to change that perception.

The Statutes Amendment (National Energy Laws) (Penalties and Enforcement) Act 2020 (SA) came into effect on 29 January 2021. It created a new penalty and enforcement regime for the National Energy Retail Law (among other changes).

All electricity on-suppliers in Queensland are required to hold a current retailer authorisation or be an exempt seller. The AER imposes conditions on exempt sellers in accordance with the National Energy Retail Rules and the AER Exempt Selling Guidelines. An exempt seller must comply with those conditions.

If an electricity on-supplier:

• sells electricity without being an “exempt seller” or holding a retailer authorisation; or
• fails to comply with the conditions set out in the AER Exempt Selling Guidelines,

then the AER considers such offences to be tier 1 civil penalty provisions. 

In the case of a breach of a tier 1 civil penalty provision, the AER may impose the following penalties:

• if the breach is by a natural person—an amount not exceeding $500,000;
• if the breach is by a body corporate—an amount not exceeding the greater of the following:

1. $10,000,000;
2. if the Court can determine the value of any benefit reasonably attributable to the breach of the civil penalty provision that the body corporate, and any body corporate related to the body corporate, has obtained, directly or indirectly—3 times the value of that benefit; or
3. if the Court cannot determine the value of the benefit—10% of the annual turnover of the body corporate during the 12-month period ending at the end of the month in which the body corporate breached, or began breaching, the civil penalty provision.

With the risk of such significant penalties being imposed, there is no better time to conduct an audit of your electricity on-supply arrangements to ensure that you are registered in the correct on-supply categories and are aware of the conditions that apply to you.

For further information and discussion, please contact ourResources and Energyor Manufactured Homesteam.