Essential Service Commission (Compliance and Enforcement Powers) Amendment Bill 2021

Ms VAGHELA (Western Metropolitan)

I am pleased to rise to make a contribution on the Essential Services Commission (Compliance and Enforcement Powers) Amendment Bill 2021.

Every day energy has become a more and more integral part of our modern society. We are seeing an energy crisis unfold around Europe. It goes to show how important these utilities are. Given that these utilities play a vital part in the functioning of the society, we have to ensure that fairness is maintained, and Victorians are not ripped off and tricked. When we came to the government in 2014, we knew that we had to bring the out-of-control energy prices under control. Dodgy retailers were taking advantage of Victorians. So, we had to fix retail energy markets. The power balance was held by the large energy companies, and as they are known to do, they maximised their profits, at the expense of Victorian households. We had committed to fix retail energy markets, and we have and continue to deliver on that commitment.

WHAT WE HAVE DONE SO FAR—ENERGY FAIRNESS PLAN

The energy fairness plan is delivering the biggest regulatory change in Victorian history. This plan puts the power back in the hands of Victorians. Since 2018, we have implemented several key programs and reforms. These changes have empowered energy users, increased competition, and cracked down on dodgy practices from energy retailers.

We have already:

a. Introduced the Victorian default offer as the centrepiece of the energy fairness plan.

i. The Victorian default offer provides a simple-to-understand, reliable energy offer that consumers can trust.

b. Implemented the payment difficulty framework to ensure that energy companies offer assistance to customers who are struggling to pay their bills.

c. Developed the Victorian Energy Compare website, which offers a truly independent comparison of energy offers.

i. It is worth noting that over 3 million Victorians have accessed the site, and of those, seven out of 10 people save money. Typical annual household savings on energy bills in the first year alone are about $330.

ii. I encourage people to visit Energy Compare and find a better energy deal with the $50 power saving bonus.

d. We further extended the power saving bonus by providing a one-off $250 payment to vulnerable Victorians. This bonus provided immediate energy bill relief to eligible concession card holders and those receiving JobKeeper or JobSeeker.

i. We have already received 200 000 applications and paid $40 million to those who need it most.

ii. And, we are now reaching even more people, partnering with six community organisations who can help people with limited internet access to process applications either over the phone or in person.

iii. Over the 12-month life of the power saving bonus, we expect to reach about 900 000 households.

iv. The $250 power saving bonus was announced as part of the unprecedented $1.6 billion energy package included in the 2020–21 state budget in November.

e. The package included record investments in clean energy and additional measures to make energy more affordable as we emerged from the COVID-19 crisis.

f. In addition to $128 million for the expanded power saving bonus, the household energy savings package included:

i. $335 million to deliver new energy efficient heating and cooling for low-income households and,

ii. $112 million for energy efficiency upgrades for 35 000 social housing homes.

We had provided further support of $3.7 million in response to COVID-19 for initiatives to connect Victorians with energy bill hardship support during the pandemic. This included tailored energy brokerage services to help Victorians doing it tough to navigate the energy market and ensure that their rights were protected. And earlier this year, we further gave power to Victorians by legislating the important energy fairness bill. This bill banned the toxic ‘win back’ and ‘save’ offers to customers. This tactic was used by big retailers to stifle competition. Through this tactic, larger retailers prevented small retailers from gaining a foothold in the market. These sneaky and anti-competitive behaviours impacted customers. The energy fairness plan bill also banned retailers from cold-calling and selling energy retail plans door to door. Big energy retailers used coercive and misleading tactics through unsolicited door-to-door salespeople and telemarketers to make households sign up for electricity offers which turned out to be more expensive. Vulnerable households tend to be particularly susceptible to these high-pressure sales tactics. It was our duty to stamp these sorts of behaviours out, so we did. The energy fairness bill also increased protections against wrongful disconnections by introducing higher civil penalties as well as criminal offences with maximum penalties of $1 million for the worst kinds of wrongful disconnections. These legislative changes and government’s investments all add up to a comprehensive package of support for energy users. This clearly shows that this government is committed to energy fairness. And we are continuing to deliver on this commitment through this bill we are debating today.

WHY DO WE NEED THIS BILL?

There is a lot of work to do to address imbalances created by privatisation and a lack of oversight by previous Liberal governments. Currently, the Essential Services Commission (ESC) does not have regulatory tools to enforce the operation of a fair energy market for consumers. Further, ESC does not have the powers to fully ensure that responsible parties are held accountable properly. Through this bill, the monitoring and enforcement powers of the ESC will stamp out bad behaviours by dodgy retailers and make those who are responsible for wilfully taking advantage of Victorians pay their fair dues. This bill is a sister bill of the energy fairness bill, and it will help us complete our promise to deliver a fairer energy market for all Victorians.

COMPLIANCE AND ENFORCEMENT POWERS BILL—WHAT WILL IT DO?

This bill has three main components and now I will go through each point one by one.

INFORMATION GATHERING AND SHARING POWERS

a. Firstly, the goal of this bill is to overhaul existing information gathering and sharing. This will aid the ESC in getting all the relevant information it requires.

b. This will make sure that the energy companies cannot hide their dodgy behaviour.

c. This reform brings a new tier of information gathering. This will assist when companies and individuals break the rules.

d. The new power can require companies to hand over information. It will also require them to produce documents and obtain evidence under oath.

e. This will be supported by a new ability for the ESC to obtain search warrants from the Magistrates Court to obtain documents to help with investigations.

f. This bill also lets the ESC enter into information-sharing agreements with other regulators such as the Australian Competition and Consumer Commission (ACCC), Consumer Affairs Victoria (CAV) and the Australian Energy Regulator (AER).

g. This way, the ESC can jointly investigate bad energy companies whose behaviour crosses Victorian state lines.

ENFORCEMENT FRAMEWORK

a. Secondly, this bill will systematically fix the enforcement framework under which the ESC operates, with a new civil penalty framework and higher penalties, modelled after other important laws—such as Victoria’s new Environment Protection Act, and the National Energy Retail Law.

b. It will allow the ESC to pursue dodgy retailers in court. If the court agrees that there was bad behaviour, they will be able to hit the dodgy retailers with a range of remedies.

c. Penalty levels will increase to bring them in line with the Australian Consumer Law and National Energy Retail Law.

d. This bill also introduces a lower civil standard of proof, with matters decided on the balance of probabilities.

e. Further, this bill also ensures that people who facilitate the wrongdoings can be punished accordingly. This means that those individuals who knowingly authorised or facilitated contraventions under the act will face some liability for their actions.

i. The bill proposes that an increased emphasis on liability of corporate officers be placed.

ii. This ensures that people who aid or abet contraventions by companies or individuals can be held liable themselves.

OTHER MEASURES

a. Thirdly, this bill also has a range of other measures that improve operational and financial arrangements of the ESC and its regulatory framework.

b. This is so that the ESC has the proper governance and protocols to protect Victorian consumers.

c. The ESC has the responsibility for both making codes and enforcing them.

d. This bill will make reforms to how codes like the energy retail code are made.

e. This bill proposes that the codes of practice can incorporate a wider range of regulatory measures.

f. Codes of practice will sunset every 10 years and be subject to standard regulatory impact statement processes.

g. This bill will also strengthen the powers to make codes of practice with new powers providing greater flexibility for the ESC.

h. It will also establish an ESC enforcement fund, which we promised to do in 2018.

i. This ‘litigation fighting fund’ will allow the ESC to retain the revenue from fines and penalties it wins to fund litigation and enforcement actions against other dodgy energy companies.

CONCLUSION

It is very clear to all Victorians that the original regulatory framework is no longer fit for purpose to protect energy customers. As we rely more and more on energy, we have to make sure the customers remain protected. Our government is committed to overhauling the current fines and penalties against energy retailers breaking the laws. We are also making sure that the ESC has enough powers to gather information, monitor, and crack down on bad behaviours by energy retailers. This bill will deliver for Victorian households. Let’s protect the most vulnerable of our community and not the executives at the top end of town, as the Liberals did when they voted against the last energy fairness bill. Let’s make a fair and equitable energy market. Let’s protect energy users into the future. An effectively regulated energy sector will help alleviate household cost pressures. The bill ensures that regulatory measures for the benefit of consumers can be effectively enforced against energy retailers.

I commend this bill to the house.