AER New Penalties and Enforcement procedures

23 March 2021

Stronger penalties for breach of National Energy Laws

Increases in fines up to $10 million (or more for large companies) for non-compliance under the new three-tier penalty framework. 

The Statutes Amendment (National Energy Laws) (Penalties and Enforcement) Act 2020 (SA) (the Act) was passed in October 2020 to form a new and stronger civil penalty and enforcement regime in the National Energy Laws (NEL). The amendments to the Act for the National Energy Laws came into effect by Proclamation on 29 January 2021.

The new provisions introduce more significant maximum penalties and provide the Australian Energy Regulator (AER) with increased powers and flexibility in addressing breaches of the NEL, with all relevant clauses itemised to an applicable tier in the three-tier penalty regime.

The three tiers available to the courts and the AER are structured as follows:

  • Tier 1:Maximum penalties - corporations $10 million, or up to three times the benefit obtains from the breach or 10% of annual turnover.

  • Tier 2:Up to $1, 435,000 (+ $71,800 per day for ongoing breach)

  • Tier 3:Up to $170,000 (+ $14,400 per day for ongoing breach)

These amounts will also be indexed every three years to ensure that their value is maintained over time.

Examples of conduct falling with Tier 1, Tier 2 and Tier 3 concepts


Tier 1

Tier 2

Tier 3

Common Breach

Failure to deal with Hardship Customer

Incorrect use of an estimated read for billing

Missing required information on Customer bills

Maximum Penalty





From the over 800 civil penalties available, each one is now itemised in the regulations to the relevant penalty tier removing any confusion as to where the severity or importance of a relevant breach sits. Infringement notices issuable for suspected breaches have also been increased under the new legislation, with Tier 1 and Tier 2 penalties attracting a new maximum of $67,800.

Further critical changes to the powers of the AER under the new laws incorporate the capacity to:

  • require witnesses to take part in oral examination while investigations are underway.

  • Seek court orders requiring compliance with mandatory notification to give data or documents.

  • Seek orders that an individual who has breached certain aspects of the National Energy Laws to take part in community service for the benefit of the community or publish an advertisement notifying about the breach.

The new laws are a signpost of the intentions of the AER to ensure the energy industry is taking the rights of their consumers seriously during a time that is likely to feature rapid change in regulation of the market. The AER Chair Clare Savage said:We expect the new penalties to incentivise energy businesses to devote even greater effort to comply with laws to protect consumers.


Should you have any doubt about your position in relation to compliance with these regulations, reach out to our team at Energy On,who will happily assist you in meeting all your obligations as an exempt seller or embedded network operator.

National Energy Retail Regulations PDF

National Energy Retail Rules PDF