Briefing Note | February 2021

Big Stick Legislation

Key Points

The Big Stick legislation – strictly speaking, the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 – is a bill intended to support the ACCC’s oversight of the electricity market following its Retail Electricity Price Investigation in 2017.
The Bill addresses perceived deficiencies in the electricity market in three areas: wholesale market bidding, the financial contract market that complements the wholesale spot market, and the retail market, specifically for household and small business customers.
The Bill gives the ACCC wide powers to tackle instances of market misconduct in these three areas. In retail this is primarily failing to pass through clear reductions in costs to retail prices. In the contract market it is failing to offer contracts on reasonable terms for the purposes of lessening competition. In the wholesale spot market, it is bidding in a way that is fraudulent, dishonest or in bad faith or for the purposes of manipulating spot prices.
Enforcement remedies open to the ACCC where electricity companies contravene the Bill range from public warning notices to civil proceedings to recommending the Treasurer force the company to offer financial contracts or to sell off assets.
The ACCC has released guidelines intended to give some insight into how it will interpret the Bill. The Bill came into force on 10 June 2020.

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