Electricity retailers and the Australia Institute have welcomed confirmation that the Australian Competition and Consumer Commission (ACCC) and the Australian Energy Regulator (AER) are investigating a series of “high-price events” in May where it seems that withholding of supply in the National Electricity Market (NEM) led to massive increases in wholesale gas prices.
The Australia Institute said in a statement that in recent peak events gas generators failed to offer electricity at reasonable prices, appearing to choose instead to hold out and drive gas prices even higher.
The AER has confirmed to the Senate that it is investigating a series of “high-price events” in May and the ACCC will draw on this expert analysis in its own inquiries.
Enova Community Energy, Energy Locals and The Australia Institute have welcomed the AER’s action on gas prices after Enova wrote to the ACCC about the issue in May.
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Enova Community Energy Chair Alison Crook AO said the market behaviour of NSW gas peaking plants is driving up the cost of energy.
“Their role is to provide energy at times of high demand to ensure energy prices are maintained at reasonable levels, but this has not been happening,” Ms Crook said.
“This sort of behaviour harms households and business consumers and may drive small retailers to the wall.”
Founder and CEO of Energy Locals Adrian Merrick said on the gas prices, “In recent weeks we have repeatedly seen gas generators failing to turn on when the wholesale price was rapidly increasing, which then causes the cost of energy to sky-rocket. It’s disheartening to think that generators can play these games.”
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Australia Institute energy regulatory lead Dan Cass said it welcomes the investigation into the issue of gas prices.
“It is hard not to see this as market manipulation and Australian consumers and businesses deserve to know why they are losing out, especially if taxpayer funded companies are behind it.
“This behaviour from the gas generators makes a mockery of the government’s so-called gas fired recovery. The supposed reason to build a government-owned gas generator is to increase competition and reduce prices, not contribute to behaviour that forces major industrial users, like the Tomago aluminium smelter, to shut down.”
