Energy retailers in court for non-payment of penalties relating to emissions reductions obligations under Victorian law

The Essential Services Commission has commenced proceedings in the Supreme Court of Victoria against energy retailers Mojo Power East Pty Limited (MPE) and QEnergy Limited (QEnergy). The applications relate to non-payment of penalties by the retailers after they allegedly failed to surrender energy efficiency certificates to offset their legislative liabilities under the Victorian Energy Upgrades program.

The Victorian Energy Upgrades program is one of the largest energy efficiency schemes in Australia. It assists Victorian households and small businesses to reduce their energy bills and greenhouse gas emissions by providing access to discounted energy efficient products and services. These activities generate Victorian energy efficiency certificates (VEECs) through the program.

Energy retailers are required by law to surrender Victorian energy efficiency certificates in proportion to the volume of electricity and gas they sell each year, to contribute to annual emissions reduction targets set by the Victorian Government.

The commission issued penalties to the retailers in October 2022 after identifying shortfalls of 2,135 certificates for MPE and 6,136 certificates for QEnergy for the 2021 compliance year.

In recognition of a challenging 2022 for the energy sector, the commission in good faith accepted payment plan proposals from MPE and QEnergy in relation to these penalties. The retailers subsequently missed the extended payment deadlines and to date no monies have been paid.

Acting commission chairperson Sitesh Bhojani says the legislation is clear about energy retailer obligations under the program and the consequences if retailers fail to meet those obligations.

“The commission takes its role as regulator of the Victorian Energy Upgrades program seriously. Where we find energy businesses doing the wrong thing by the program and by Victorians, we take action,” said Commissioner Bhojani.

“The obligations built into the program ensure energy retailers make a positive contribution to Victoria’s legislated goal to reach net zero emissions by 2050. The program objectives and benefits for our community are too important, and the commission will do what it can to ensure they are achieved.”

The commission is seeking a declaration that MPE and QEnergy contravened the Victorian Energy Efficiency Target Act 2007, and an order requiring the retailers to pay the outstanding shortfall penalties.