As of this week, energy companies will be held to account for misconduct, with penalties handed down for anti-competitive behaviour or moves to manipulate electricity prices.
The so-called “big stick” legislation is hoped to provide some relief to families and small businesses doing it tough during the coronavirus pandemic.
In announcing the new measures, Treasurer Josh Frydenberg quoted the Australian Competition and Consumer Commission (ACCC), noting that, for too long, electricity companies have “played a major role in poor outcomes for consumers”.
“The ‘Big Stick’ legislation will ensure reductions in wholesale costs are passed on to customers, while penalties will apply for anti-competitive behaviour or moves to manipulate electricity prices,” Mr Frydenberg said.
“This new law comes at an important time, with an increased number of households and small businesses experiencing hardship due to the COVID-19 pandemic.”
The ACCC will be responsible for enforcing the legislation and will have a graduated range of penalties at its disposal to punish misconduct, ranging from public warnings to court-ordered fines.
For the most egregious breaches, the legislation makes available two additional significant remedies including Treasurer-issued contracting orders that will require electricity companies to offer electricity financial contracts to third parties, and Federal Court-ordered divestiture orders relating to misconduct in the wholesale market.