CANBERRA, Australia: Treasurer Josh Frydenberg has introduced ‘big stick’ energy legislation to the lower house on Wednesday, which threatens to break up big power companies that are found guilty of jacking up power prices.
The new law would enable government to threaten energy companies with hefty fines of millions of dollars to inhibit illegal rise in power tariffs.
The revived legislative proposal is Morrison government’s attempt to lower energy bills.
The proposal states three types of prohibited conduct for energy companies focused on retail prices, preventing competition and withholding supply to the wholesale market.
The Australian Competition and Consumer Commission could impose a range of penalties under the law based on the seriousness of the company’s misconduct.
Energy giants can now be fined the greatest of $10 million, three times the value of the benefit it received through its illegal conduct, or 10% of the company’s annual turnover the year before the misconduct occurred.
For even more serious offences, the competition watchdog can recommend the treasurer to pursue a court-ordered divestiture, for both private and government-owned companies.
“The bill does not empower the court to order privatisation,” Frydenberg said.
“This ensures the relevant asset remains in government ownership while still addressing the misconduct in question and promoting competition,” he explained.
The energy sector had moved to remove conduct around retail prices, which necessitates electricity retailers to pass savings on to consumers.
The government refused to give in, saying it would undermine the whole point of the bill.
Under the proposed law, energy companies are only liable to pass on savings in market offers and not standing offers.
The coalition’s first version of the bill had lapsed at the May federal election.