Households could save hundreds of dollars each year thanks to a crackdown on penalties for failing to meet strict payment deadlines on discount power deals.

The Australian Energy Market Commission has accepted the rule change to end the practice of power companies charging hefty fees if customers pay late or fail to meet other conditions on bills under discount plans.

The reduced fees will begin on July 1.

They will be coupled with penalties of up to $100,000 for energy companies that fail to comply with the new rule.

Energy Minister Angus Taylor had recommended the rule change early in 2019 to the AEMC, which looks after how the electricity network operates.

Some consumers had been slugged with late fees amounting to an extra 40 per cent on top of their bills, Mr Taylor said.

“A typical household might be paying $185 a year extra as a result of the late payment fee, small businesses much more – close to $1000,” he told Sky News on Thursday.

“Obviously, it depends on the circumstances but this was completely unacceptable practice.”

The AEMC said the rule change provided a balance between protecting consumers from excessive fees and retailers’ need to recover reasonable costs for late payments.

“These rules just make sure that there’s a cap on what those fees can be, so fees that size will now be a thing of the past,” acting AEMC chief executive Suzanne Falvi said.

The consumer watchdog, the Australian Competition and Consumer Commission, believes more than one in four residential electricity customers fail to meet conditions for their pay-on-time discount.

Meanwhile, mining giant Rio Tinto has announced it wants to reach net zero greenhouse gas emissions by 2050 and will spend $1 billion over five years on climate-related measures.

Tweet from @RioTinto

The company’s 2050 pledge matches that of fellow mining titan BHP.

Federal Labor has also set its sights on a net zero emissions by 2050 goal, matching that of all states and territories as well as more than 70 countries.

The government has agreed to the Paris agreement’s goal of net zero emissions in the second half of the century, and has whacked Labor for not outlining a pathway for its target.

Asked why he was critical of Labor and not Liberal state governments with the same target, Mr Taylor said it was because the opposition would have to prove its achievements on the international stage.

“The federal government, well those who would like to be the federal government, have a special level of accountability because they are the ones that go to the international negotiations … they are required to deliver on their target,” he said.

Labor’s energy spokesman Mark Butler said Rio Tinto’s 2050 emissions aim showed the government was out of touch.

“Scott Morrison has now found himself completely out of step with Australian business, other governments and the community,” he said.

“He is locked in a reckless and extreme position because of the stranglehold the hard-right of the coalition has on climate policy.”

-with AAP