EnergyAustralia has been handed the largest ever penalty imposed under Australia's national energy retail law, according to the energy regulator, for failing to register people who use life-saving medical equipment. 

The Federal Court handed down the $12 million fine to the company for failing to register thousands of customers who used life-support machines as well as notifying energy distributors.

EnergyAustralia will also have to pay $300,000 in costs to the Australian Energy Regulator (AER), which brought the proceedings against the company.

The company admitted to not registering more than 4,000 customers who were using life support machines between 2018 and 2020.

It also failed to notify energy distributors of a similar number of customers, as well as failing to register more than 6,000 emergency phone numbers with distributors.

The devices involved, which require constant power, included ventilators, oxygen concentrators, dialysis machines and CPAP (continuous positive airway pressure) machines.

AER chairwoman Clare Savage said the fine was a message to electricity retailers and distributors about the seriousness of having the right systems and processes in place to comply with their legal obligations and protect consumers who rely on life-support equipment.

She said EnergyAustralia's actions threatened the lives of thousands of consumers in vulnerable circumstances.

"The $12 million penalty imposed by the court sends a strong message to all retailers and distributors that they must comply with their life support responsibilities under the law," Ms Savage said.

"Life support obligations are critical to ensure that customers receive important protections under the law, including protections relating to continuity of energy supply and sufficient notice of any planned interruptions."

Power outages threaten people's lives

Muscular Dystrophy Australia chief executive Jan Chisholm said the organisation was "delighted" that the court had taken the issue seriously in handing down such a large fine.

"So, these people need confidence that their energy supplier takes their obligation seriously that they know who these people are and they will prioritise their safety should an outage occur."

She said sadly some people with muscular dystrophy had died in the past because the devices they used had not worked during a blackout.

An EnergyAustralia spokesman said the company "did not have adequate systems, policies and procedures to fully comply with the life-support rules" during the period in question.

He said the company reported the breaches itself.

"We want to assure customers that their safety remains our priority and we apologise to them for this error," he said.

"We have investigated and not found any instances where customers had their power wrongfully disconnected or interrupted as a result of these breaches.

"We have fundamentally redesigned how we manage life support obligations, and since early 2020, have processes that record life support registrations and automatically notify distributors upon customer notification."