A Queensland government-owned energy company is under investigation for allegedly overcharging more than 1000 large regional businesses for more than a year.

Ergon Energy is facing a Queensland Competition Authority probe for allegedly overcharging 1100 businesses a total of more than $760,000 since the beginning of 2017.

The QCA is still working to determine the scope of Ergon’s alleged breach of energy retail laws.

“The QCA’s investigation will confirm precisely how many customers have been affected and to what extent,” the authority’s chairman Roy Green said in a statement on Friday.

“This is a significant matter that requires a full investigation, and today we have taken action to ensure customers pay Ergon Retail only what the law requires.”

Prof Green said Ergon was legally required to charge its large customers the regional retail-notified electricity price, set by the QCA.

But there was evidence it had also been hitting businesses with metering costs since January last year, he said.

The QCA would determine what enforcement action might be warranted once the probe was complete, Prof Green said.

“We will do everything in our power to ensure they (customers) are fully refunded for any illegal charges,” he said.

Ergon Energy Retail said it would fully cooperate with the QCA investigation, but it believes the metering charges “have been levied appropriately”.

It said there had been a difference in interpretation of the regulations, and while it did not believe it had done anything wrong, it would discontinue the charge until the issue was resolved.

Residential customers are not affected and the issue involves only large customers such as government energy users, mines and industrial sites, Ergon said.

Electricity costs have been a big political issue in Queensland, with the Labor government announcing an affordable energy plan for households, and small and large businesses.

A spokeswoman for Energy Minister Anthony Lynham said he respected the independent role of the QCA.

Ergon Energy sells power to homes and businesses in regional Queensland and is a subsidiary of Energy Queensland Limited (EQL), a state government-owned corporation.