Electricity Supply (General) Regulation 2014

Executive summary of update

• Effective date: 27 March 2026 This update primarily revises the methodologies for calculating various scheme penalty rates and certificate registration fees within the Electricity Supply (General) Regulation 2014. It also introduces new penalty notice offences related to solar-generated electricity and explicitly lists civil penalty provisions. The primary intent is to update financial calculation mechanisms and clarify enforcement. The most significant practical consequence is the need for immediate recalculation and adjustment of financial models for compliance costs and potential penalties across energy savings, peak demand reduction, and renewable fuel schemes.

Impacted parties

This update most significantly impacts scheme participants, accredited certificate providers, retailers, and distributors involved in energy savings, peak demand reduction, and renewable fuel schemes, particularly their finance, legal, and compliance teams.

Change Analysis

1. Revised Penalty Rate Calculation Methodologies for Energy and Fuel Schemes

• What is the new requirement?
  • For the Energy Savings Scheme (clause 30(d)), the base penalty rate for 2023 and subsequent years will now be calculated recursively, using the previous year’s base penalty rate adjusted by the Consumer Price Index (CPI) movements (CPIyear-1/CPIyear-2).
  • For the Peak Demand Reduction Scheme (clause 62(1)(b)), the scheme penalty rate for subsequent compliance periods will also be calculated recursively, using the previous year’s base penalty rate adjusted by the CPI (CPIcurrent year/CPIJun 22).
  • For the Renewable Fuel Scheme (clause 63A(1)(b)), the scheme penalty rate for 2028-2036 compliance periods will similarly be calculated recursively, using the previous year’s base penalty rate adjusted by the CPI (CPIyear-1/CPIyear-2).
• What was the old rule?
  • Previously, the Energy Savings Scheme penalty rate for 2023 onwards was calculated using a fixed base of $31.86 adjusted by CPI relative to September 2021.
  • The Peak Demand Reduction Scheme penalty rate for subsequent compliance periods was calculated using a fixed base of $2.35 adjusted by CPI relative to June 2022.
  • The Renewable Fuel Scheme penalty rate for 2028-2036 was calculated using a fixed base of $17.50 adjusted by CPI relative to September 2027.
• Why does this matter? These changes fundamentally alter how potential shortfall penalties are calculated across three key energy schemes. The shift to a recursive calculation means that penalty rates will compound annually based on CPI, potentially leading to higher and more volatile penalty amounts compared to the previous fixed-base adjustments. This directly impacts financial forecasting, risk assessment, and budgeting for compliance.

2. Introduction of New Penalty Notice Offences for Solar-Generated Electricity

• What is the new requirement?
  • Clause 70A and Schedule 4 now prescribe new penalty notice offences for contraventions of sections 43G and 43H(2) of the Act, which relate to charges for solar-generated electricity supplied by customers.
  • The penalties are $550 for an individual and $1,100 for a corporation for each offence.
• What was the old rule?
  • (New Obligation) These specific contraventions were not previously listed as penalty notice offences under this Regulation.
• Why does this matter? This introduces new compliance obligations and potential financial penalties for entities involved in solar-generated electricity supply. Retailers and distributors must ensure their processes and customer agreements align with sections 43G and 43H(2) of the Act to avoid these new penalties. It increases the regulatory risk associated with solar bonus scheme operations.

3. Revised Certificate Registration Fee Calculation Methodologies

• What is the new requirement?
  • For the Energy Savings Scheme (Schedule 3, clause 2(1)(b)), the fee for registering energy savings certificates for calendar years after 2022 will now be calculated recursively, using the previous year’s fee adjusted by the CPI (CPIyear-1/CPISep 21).
  • For the Peak Demand Reduction Scheme (Schedule 3, clause 3(1)), the fee for registering certificates will also be calculated recursively, using the previous year’s fee adjusted by the CPI (CPIyear-1/CPIyear-2).
• What was the old rule?
  • The Energy Savings Scheme registration fee for calendar years after 2022 was calculated using a fixed base of $0.92 adjusted by CPI relative to September 2021.
  • The Peak Demand Reduction Scheme registration fee was calculated using a fixed base of $0.0279 adjusted by CPI relative to June 2022.
• Why does this matter? These changes directly impact the operational costs for accredited certificate providers. The shift to recursive fee calculations means that registration fees will compound annually based on CPI, affecting the financial viability and planning for certificate creation activities. Finance and Commercial teams need to update their cost models accordingly.

4. Explicit Listing of Civil Penalty Provisions

• What is the new requirement?
  • Clause 70B now explicitly states that Schedule 5 lists the specific provisions from the Act (Schedule 4A) that are civil penalty provisions.
  • Schedule 5, which was previously empty or implicitly referenced, now contains a detailed list of these provisions for both the Energy Savings Scheme and the Peak Demand Reduction Scheme.
• What was the old rule?
  • While clause 70B referred to Schedule 5 for civil penalty provisions, Schedule 5 itself did not explicitly list these provisions in the previous version, leading to potential ambiguity.
• Why does this matter? This clarification removes ambiguity regarding which specific provisions can incur civil penalties. It enhances legal certainty and allows compliance teams to precisely identify high-risk areas. Legal and Compliance teams must review this updated list to ensure all relevant internal controls and monitoring processes are in place for these specific provisions.

Corrective and preventive actions

• Finance:
  • Section 30(d), 62(1)(b), 63A(1)(b): Immediately update financial models and forecasting tools to reflect the new recursive CPI-adjusted formulas for calculating energy savings, peak demand reduction, and renewable fuel scheme penalty rates for current and future compliance periods.
  • Schedule 3, Clause 2(1)(b), 3(1): Revise cost models for certificate registration fees to incorporate the new recursive CPI-adjusted formulas for energy savings and peak demand reduction certificates.
• Legal:
  • Section 70A, Schedule 4: Review internal policies and procedures to ensure full compliance with sections 43G and 43H(2) of the Act to mitigate the risk of new penalty notice offences related to solar-generated electricity.
  • Section 70B, Schedule 5: Conduct a comprehensive review of all listed civil penalty provisions to ensure robust compliance frameworks and risk mitigation strategies are in place.
• Operations:
  • Section 70A, Schedule 4: Implement training for relevant operational staff on the new penalty notice offences under sections 43G and 43H(2) of the Act, focusing on processes related to solar-generated electricity.
• Commercial and Procurement:
  • Schedule 3, Clause 2(1)(b), 3(1): Assess the impact of revised certificate registration fees on the commercial viability of current and future projects involving energy savings and peak demand reduction certificates.
• Government & Regulatory Affairs:
  • Section 30(d), 62(1)(b), 63A(1)(b): Monitor the CPI adjustments and their impact on scheme penalty rates to inform future policy engagement and strategic planning.

Risks & opportunities assessment

• Risks:
  • Increased Financial Exposure: The shift to recursive CPI-adjusted penalty and fee calculation formulas introduces greater volatility and potentially higher financial liabilities for non-compliance or certificate registration, impacting budgeting and financial forecasting.
  • New Compliance Burden: The introduction of specific penalty notice offences for solar-generated electricity (sections 43G, 43H(2)) creates new areas of compliance risk, requiring immediate operational adjustments and staff training to avoid penalties.
  • Reputational Damage: Non-compliance with the newly clarified civil penalty provisions or the new penalty notice offences could lead to significant fines and reputational damage.
• Opportunities:
  • Enhanced Compliance Clarity: The explicit listing of civil penalty provisions in Schedule 5 provides greater clarity, allowing for more targeted and efficient allocation of compliance resources to high-risk areas.
  • Strategic Planning: Understanding the new recursive calculation methodologies for penalties and fees allows for more sophisticated financial modeling and strategic planning, potentially identifying opportunities for cost-effective compliance or market participation.