The Victorian Government has introduced legislation before Parliament aimed at closing a legal loophole that would allow for an additional $94 million in additional electricity supply charges.

 

State Minister for Energy and resources Michael O’Brien said the changes will incentivise energy distribution companies to deliver quality services, including reliable power supplies, responsible call centres and efficient overall management of the grid.

 

"The community rightly expects and deserves these standards and if power companies don't meet them, they should face financial consequences – resulting in reduced charges to consumers,” Mr O’Brien said.

 

Under existing legislation, power companies are rewarded for delivering on performance and service standards, while penalising them for failing to meet them.

 

A number of companies had failed to meet the standards, and were due to receive financial penalties through reduced charges as a result. However, the Australian Competition tribunal (ACT) ruled that the independent Australian Energy Regulator (AER) could not legally enforce the revenue cuts for the businesses that failed to meet the standards.

 

The proposed changes to the Energy Legislation Amendment Bill 2012 will shut down the legislation, giving the AER powers to enforce financial penalties under the Service Target Performance Incentive Scheme and Energy Benefits Sharing Scheme.