Federal Court orders record $17m fine for Origin Energy following landmark legal breach

The fine is the largest penalty ordered for violating Australia's national energy retail regulations

Federal Court orders record $17m fine for Origin Energy following landmark legal breach

The Federal Court has slapped Origin Energy with a landmark $17m fine after the power and gas giant breached its legal obligations towards customers experiencing financial hardship.

The fine ordered by the court is the largest ever to be handed down for breaching Australia’s national energy retail regulations. In a decision delivered on 29 June, the court found that Origin’s automated processes, which were in place from January 2018-October 2021, failed to comply with the company’s own hardship policies.

According to ABC News, more than 90,000 customers were affected on over 100,000 different occasions while the processes were in place. The case was first brought by the Australian Energy Regulator (AEC), the body responsible for regulating national wholesale and retail energy markets.

Origin’s general manager for retail Jon Briskin explained that the violation occurred as a result of the company’s bid to automate process in order to enhance the administration of its hardship program. As a result of the initiative, customers experienced issues like unilateral increases to plans, the creation of new and unauthorised plans, and automatic cancellations where Origin was unable to discuss and review the plan with the customer.

However, AEC chair Clare Savage pointed out that the company was still responsible for making sure that customers were still served in the midst of the automation process.

“When a retailer automates aspects of its hardship program, it needs to ensure it continues to offer individualised and tailored solutions to customers and has regard to a customer’s circumstances as the rules require,” she said.

“Applying automated inflexible processes across thousands of customers without considering whether they can actually meet the payments shows a complete disregard of the hardship obligations in the national energy laws, which are designed to protect customers in vulnerable situations.”

In addition to the fine, Origin must also pay out $200,000 in legal costs and establish a program for training and compliance.

The judgment comes as large parts of Australia have been warned of a potential increase in blackouts over the winter months amid chaos in the national energy market.

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