On 29th of January 2021, the Statutes Amendment (National Energy Laws) (Penalties and Enforcement) Act 2020 (the Act) commenced. The Act amends the National Energy Laws by increasing the maximum penalties that a court may order after a finding of a breach of a civil penalty provision and also provides the Australian Energy Regulator (AER) with new enforcement powers. 

The national electricity, gas and energy retail regulations have been amended to classify each civil penalty provision in the National Energy Laws and Rules as either a Tier 1, Tier 2 or Tier 3 provision.

The AEMC cannot create new civil penalty provisions. However, it may, jointly with the AER, recommend to the ministerial forum of energy ministers that new or existing provisions of the National Electricity Rules (NER), National Gas Rules (NGR) or National Energy Retail Rules (NERR) be classified as civil penalty provisions. The AEMC will continue to include these recommendations in its rule change determinations, although now the recommendations will also state whether the AEMC recommends a provision should be classified as a Tier 1, 2 or 3 penalty provision.  

decision matrix and concept table have been developed, and approved by energy ministers, to provide a decision-making framework that the AEMC can apply, in consultation with the AER, when undertaking this assessment.

The provisions in the NER, NGR and NERR that are classified as a civil penalty provision are listed in schedules to the relevant regulations:

The ‘notes’ that appear under relevant provisions of the rules that are classified as civil penalty provisions do not yet reflect the amendments made by the regulations. The AEMC will shortly commence a minor rule change to update all of these notes to reflect the revised classifications. Stakeholders should refer to the regulations in the meantime.

For further information on the civil penalty reform, see the AER’s announcement and the energy ministers webpage.