Australia's Energy Regulator Tightens Pressure on Retailers as Consumer Protection Drives Enforcement

Key Takeaways

• Consumer Protection Remains the Top Enforcement Priority: The Australian Energy Regulator (AER) centered its 2025–26 compliance program on protecting vulnerable consumers, with particular attention to customers experiencing financial hardship, family violence and those relying on life-support equipment.
• Major Enforcement Actions Target Energy Companies: The regulator imposed or pursued significant enforcement actions, including a $707,000 (AUD $1.089 million) penalty against Alinta Energy, a $92,700 (AUD $142,800) penalty against EnergyAustralia, a $162,000 (AUD $250,000) Federal Court penalty against CAM Engineering and Construction, and court proceedings against Origin Energy and Transgrid.
• Retail Compliance Received Broader Scrutiny: Beyond penalties, the AER reviewed retailer hardship policies, monitored compliance with family violence obligations, reinforced life-support protections, issued smart meter guidance and updated embedded network guidelines to strengthen consumer safeguards.
• Market Transparency and Grid Reliability Also Took Center Stage: The regulator issued new compliance guidance for wholesale electricity participants, monitored network connection obligations and advanced transparency measures in Australia's gas market through new reporting guidance and compliance assessments.
• Current Priorities Will Continue Into Next Year: The AER said its existing compliance and enforcement priorities will remain in place while it prepares broader updates to its regulatory priorities for the 2027–28 period.

Deep Dive

The Australian Energy Regulator spent much of the past year following the money. It traced overcharges to Centrepay customers, questioned whether vulnerable households had been properly protected, examined how retailers treated customers struggling to pay their bills, and looked closely at what happened when obligations designed to shield people from harm became little more than words on paper.

That work now fills the regulator's 2025–26 Annual Compliance and Enforcement Report, released Thursday, a document that reads less like a scorecard than an account of where the AER believes pressure should be applied. Again and again, the focus returns to consumers whose dependence on the energy system leaves them with the fewest options when it fails them.

The year's largest financial penalty went to Alinta Energy, which paid $707,000 (AUD $1.089 million) over alleged breaches involving the overcharging of Centrepay customers. EnergyAustralia paid a further $92,700 (AUD $142,800) after alleged failures to comply with obligations governing explicit informed consent and customer disconnections. Elsewhere, the regulator secured a Federal Court-ordered penalty of $162,000 (AUD $250,000) against CAM Engineering and Construction for failing to join the Energy and Water Ombudsman NSW scheme.

The AER also chose the courts for matters it says remain unresolved. Proceedings have been launched against Origin Energy over alleged breaches relating to payments received from Centrepay customers. Separate Federal Court proceedings have been instituted against transmission operator Transgrid following the regulator's investigation into the October 2024 power system events that left Broken Hill and surrounding communities without electricity.

Those cases form the public face of a broader regulatory effort that extends well beyond penalties. During the year, the AER monitored retailers' compliance with family violence obligations while developing guidance for exempt sellers. It reviewed hardship policies to assess how retailers identify and assist customers experiencing payment difficulty, reinforced protections for households relying on life-support equipment, issued guidance intended to support the rollout of smart meters, and revised embedded network guidelines aimed at improving protections and transparency for those customers. It also submitted five rule change requests to the Australian Energy Market Commission seeking stronger protections for consumers facing financial hardship.

For AER Chair Clare Savage, those strands belong to the same story.

"Energy is an essential service. Consumers need to know that retailers, networks and other market participants are meeting their obligations, particularly when people are experiencing vulnerability," she said.

Savage said the regulator had also convened retailers for its first open forum dedicated to supporting consumers affected by family violence, with plans to continue those discussions as part of a broader effort to reduce risks faced by those customers. Yet consumer protection is only one side of the report. The other concerns the machinery that keeps Australia's energy markets functioning at all.

As electricity generation becomes more dispersed and the grid itself more complex, the regulator is paying increasing attention to the quality of information flowing through the system. During the year it issued a compliance bulletin reminding wholesale electricity market participants of their obligation to provide timely and accurate information to the Australian Energy Market Operator, data that underpins forecasts of electricity supply and demand. It also continued monitoring compliance with network connection obligations, an area the regulator sees as increasingly important as new infrastructure joins the system.

"As the electricity system becomes more complex, timely and accurate information from market participants is essential," Savage said. "We will keep monitoring participants' compliance with their obligations, including whether network connections are timely and transparent."

The same attention to market transparency extended to gas. The AER published guidance intended to support consistent reporting under the Gas Market Transparency Measures and assessed responses to the first compulsory Annual Compliance Order to determine whether pipeline service providers were meeting obligations designed to promote a more transparent and competitive market.

Alongside its investigations and enforcement actions, the regulator published 15 compliance documents during the year, three of them developed following consultation with stakeholders. The volume of work reflects priorities the AER says will remain largely unchanged. According to Savage, the issues receiving the regulator's attention today are the same ones that continue to cause it the greatest concern, and they will shape enforcement efforts until a broader review of compliance priorities begins ahead of the 2027–28 program.

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