Securing Affordable Energy: power companies made responsible for winter back-up

What's at stake

Who feels it

Households and businesses reliant on electricity supply; major power companies (gentailers); large electricity users; Electricity Authority.

Money in play

Penalties increased from $2 million to up to $10 million (or three times commercial gain, or 10% of company turnover, whichever is greatest).

Timing

Consultation begins June 2026. Winter Energy Reliability Obligation (date of enactment/Royal Assent not yet specified). Annual reporting by Electricity Authority commences TBC.

How it works

Electricity Industry Act (to be amended); Winter Energy Reliability Obligation (new regime); Government Policy Statement (GPS) on electricity (to be updated).

Key context

Track consultation timeline: MBIE is now consulting sector on new Winter Energy Reliability Obligation framework.Audit your back-up supply contracts if you are a major power company or large electricity user — new mandatory lock-in requirements for dry-year cover will apply.Monitor Electricity Authority's amended duties: will now have explicit dry-year risk management mandate and must report annually to Minister on security of supply risks.Update risk governance: dry-year risk now sits with electricity sector, not taxpayers; penalty regime is substantially harder (10x penalty increase + proportional measures).Watch GPS electricity update: Government will set new priority expectations for Electricity Authority on dry-year resilience, reliability, affordability trade-offs.

Wider effects

Energy security / supply chain resilience; LNG import facility proposal; demand response and storage infrastructure; intersection with broader 'Securing Affordable Energy' plan.