Prime Mover Magazine

ACCC authorises cooperation for a more reliable energy sector

The Australian Energy Market Operator Limited (AEMO) has been granted interim authorisation by the Australian Competition & Consumer Commission (ACCC) to allow gas and electricity industry participants to cooperate on measures to ensure secure and reliable energy supply and integrity of wholesale markets during the Covid-19 pandemic.

The energy sector participants are authorised to undertake measures, including those deemed necessary to minimise the risk of outages, and share resources if necessary to maintain and operate energy infrastructure and coordinate repairs and maintenance. The interim authorisation also allows AEMO to commence work on a set of pressing issues while the ACCC considers the application further.

The need for cooperation was raised at the recent COAG Energy Council. The newly formed Energy Coordination Mechanism, a group of government and industry leaders, including the AER, will be informed about key measures taken. Under the authorisation, the ACCC will also be informed of such measures.

“The continued energy supply is essential both for industry and the community, and we agree that co-operation is required during this difficult time, to prepare for any potential issues that could disrupt supply,” said ACCC Chair, Rod Sims.

“However, the parties are not allowed to form any agreements about the wholesale or retail price of energy or share confidential information on pricing or profits," he said.

Agreements entered into under the authorisation cannot last longer than the Covid-19 pandemic necessitates.

“We need to make sure that coordination undertaken in response to the pandemic does not have adverse effects into the future," said Sims.

The conduct authorised on an interim basis will allow AEMO and industry participants to commence work immediately.

AEMO is also seeking interim authorisation for broader conduct. Given the complexity of the energy markets and the breadth of the proposed conduct, the ACCC will consider separately whether it is appropriate to grant interim authorisation for the full range of conduct sought by AEMO.

The ACCC said it is particularly interested in understanding how the proposed conduct affects smaller participants in the market, and seeks input from these stakeholders now and over coming weeks and months.

“We have worked hard on implementing measures to ensure greater affordability of electricity and greater transparency in relation to gas prices, and we will continue to keep a close eye on how any measures might impact this in the future and will carefully consider the broader application,” said Sims.

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