Australian Energy Regulator Archives - Energy Source & Distribution https://esdnews.com.au/tag/australian-energy-regulator/ Wed, 07 Aug 2024 01:11:22 +0000 en-AU hourly 1 https://wordpress.org/?v=6.6.1 AER steps in following Maximum Energy collapse https://esdnews.com.au/aer-steps-in-following-maximum-energy-collapse/ Wed, 07 Aug 2024 01:11:22 +0000 https://esdnews.com.au/?p=43419 The Australian Energy Regulator (AER) has initiated the Retailer of Last Resort process to facilitate the transfer of customers from collapsed electricity retailer Maximum Energy Retail Pty Ltd (trading as […]

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The Australian Energy Regulator (AER) has initiated the Retailer of Last Resort process to facilitate the transfer of customers from collapsed electricity retailer Maximum Energy Retail Pty Ltd (trading as Circular Energy).

Related article: Electricity retailers Mojo Power and QEnergy collapse

The initiation of this process ensures a continued supply of essential energy services to these customers.

The AER applied the market safeguard after the company was suspended from trading in the National Electricity Market by the Australian Energy Market Operator (AEMO) for failing to comply with electricity wholesale market settlement requirements prescribed in the National Electricity Rules.

Maximum Energy’s suspension will impact approximately 800 customers across Victoria and South Australia. Customers are not required to take any immediate action.

Under the Retailer of Last Resort process, each customer will be transferred to one of Origin Energy, AGL or EnergyAustralia, who will contact them directly to explain the new arrangements.

Customers are under no obligation to remain with their new retailer once they are transferred.

The AER is responsible for overseeing the national Retailer of Last Resort scheme.

Recent amendments to the National Energy Retail Law (Victoria) Act 2024 and the National Energy Retail Law (Victoria) Regulations 2024 give the AER the responsibility of managing Retailer of Last Resort events in Victoria, along with the National Energy Customer Framework regions (being Queensland, New South Wales, ACT, South Australia and Tasmania).

Related article: Energy retailers on notice with AEMC’s pricing review

This is the first RoLR event to occur under the new arrangements for Victoria.

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Report shows energy prices up in all states except Qld https://esdnews.com.au/report-shows-energy-price-increases-in-all-states-except-qld/ Wed, 24 Jul 2024 00:02:41 +0000 https://esdnews.com.au/?p=43251 The Australian Energy Regulator’s latest Wholesale Markets Quarterly Report reveals  wholesale energy price increases in all National Electricity Market (NEM) states except for Queensland compared to the previous quarter. In […]

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The Australian Energy Regulator’s latest Wholesale Markets Quarterly Report reveals  wholesale energy price increases in all National Electricity Market (NEM) states except for Queensland compared to the previous quarter.

In a trend consistent with previous years, the end of warmer months saw wholesale electricity prices increase between $65/MWh (SA) and $87/MWh (NSW), and the price in Queensland decrease by $29/MWh compared to the previous quarter.

Related article: Flexible gas backs record demand in NEM during chilly winter

This quarter saw electricity demand and price increases across all regions except for Queensland compared to the same time last year.

AER Board member Jarrod Ball said both seasonal weather patterns and tight market conditions contributed to prices during the quarter.

“While we would expect to see wholesale prices rise as weather in southern states cools and demand rises to keep people warm, the combined impact of cold snaps, planned and unforeseen network outages, combined with rebidding and lower solar and wind output has pushed electricity prices higher than this time last year,” Ball said.

Decreased solar generation as the days get shorter is typical for the second quarter of the year. However, wind generation this quarter contributed 12% of total NEM generation—its lowest share for any quarter since Q2 2021 when it contributed 11% of total generation.

To compensate, higher-priced gas and hydro generation both increased this quarter, with gas-powered generation (GPG) rising by 70% (from 973MW to 1,653MW) compared to the previous quarter and 16% (from 1,420MW) on this time last year.

There were also 19 high price events during the quarter, which led to the cumulative price exceeding the cumulative price threshold in energy for the second time in the history of the NEM. These contributed around $55/MWh to NSW’s price increase from the last quarter.

Related article: AER report shows wholesale energy prices down in 2023

Average forward prices for electricity for the 2025 calendar year increased in all regions, ranging from $24/MWh (QLD) to $41/MWh (SA), indicating an expectation of higher spot prices going forward.

One new wind generator in South Australia entered the market this quarter and will be able to contribute up to 201MW when fully commissioned. An increase in new generation is expected during the rest of 2024 and first half of 2025.

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AER accepts Evoenergy pledge for ring-fencing breaches https://esdnews.com.au/aer-accepts-undertaking-from-evoenergy-for-ring-fencing-breaches/ Tue, 18 Jun 2024 00:21:56 +0000 https://esdnews.com.au/?p=42802 The Australian Energy Regulator (AER) has accepted a court-enforceable undertaking from Icon Distribution Investments Limited and Jemena Networks (ACT)—together trading as Evoenergy—to address concerns that Evoenergy breached its ring-fencing obligations. […]

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The Australian Energy Regulator (AER) has accepted a court-enforceable undertaking from Icon Distribution Investments Limited and Jemena Networks (ACT)—together trading as Evoenergy—to address concerns that Evoenergy breached its ring-fencing obligations.

Ring-fencing obligations encourage competition in the electricity distribution sector and play an important role in providing a level playing field for third-party operators in the sector, placing downward pressure on prices.

Related article: Santos slapped with $2.75M fine by energy regulator

In May 2023, Evoenergy self-reported breaches of its ring-fencing obligations since 1 January 2018, by providing maintenance, operation and inspection services, to a customer in the Australian Capital Territory, in breach of clause 3.1(b) of the Electricity Distribution Ring-Fencing Guideline (the Guideline) and clause 6.17.1 of the National Electricity Rules.

The guideline requires Evoenergy and other electricity network businesses to provide only regulated electricity distribution and transmission services and not to provide any other services, thereby ensuring a level playing field for third party providers to compete in the sector.

By providing other services, Evoenergy may have impacted competition by inadvertently extending its distribution network service monopoly into maintenance, operation and inspection services that are supposed to be subject to competition and thereby potentially discouraging third party providers from entering the market.

The court-enforceable undertaking outlines the steps to be taken by Evoenergy to redesign systems and separate assets so that maintenance, operation and inspection services may be provided by another business and it may cease to provide the services. The court enforceable undertaking also requires regular reporting of progress to the AER as well as to the customer.

The AER has also granted a waiver to Evoenergy to provide the maintenance, operation and inspection services to the customer for 24 months, ensuring continued electricity supply to the customer while Evoenergy transitions away from providing the services and undertakes the steps outlined in the court enforceable undertaking such that it may cease to provide these services.

AER board member Justin Oliver said Distributed Network Service Providers had a serious responsibility to comply with ring-fencing requirements and maintain market competition.

Related article: Regulator fines Jemena over alleged gas breaches

“Since its introduction in 2016, the Electricity Distribution Ring-Fencing Guideline has promoted competition in the provision of electricity services by providing a level playing field for third party providers.

“It’s critically important that Distributed Network Service Providers are aware of, and continue to abide by, their obligations in the guideline and do not unfairly favour their own services in contestable markets,” Oliver said.

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Santos slapped with $2.75M fine by energy regulator https://esdnews.com.au/santos-slapped-with-2-75m-fine-by-energy-regulator/ Tue, 04 Jun 2024 23:46:07 +0000 https://esdnews.com.au/?p=42674 The Federal Court has ordered Santos to pay a penalty of $2,750,000 for breaches of important record keeping obligations in the National Gas Rules relating to the Day Ahead Auction […]

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The Federal Court has ordered Santos to pay a penalty of $2,750,000 for breaches of important record keeping obligations in the National Gas Rules relating to the Day Ahead Auction for gas pipeline capacity.

Related article: Santos and GFG ink green hydrogen deal for steelworks

In proceedings brought by the Australian Energy Regulator (AER), Santos admitted that between March 2019 and June 2021, it contravened rule 666(1) of the National Gas Rules on 4,701 occasions by failing to keep the required records of its material renominations for the Day Ahead Auction across six different gas auction facilities.

The Day Ahead Auction commenced in 2019 and is designed to improve competition in the gas market by providing access to contracted but unused capacity on gas pipelines.

In her judgment, Justice Neskovcin said, “[T]he failure to comply with r 666(1), which has a substantive role in protecting the proper functioning of the capacity auction, heightens the need for deterrence in respect of this conduct.”

Separately, Her Honour stated that the penalty imposed “should operate as a deterrent against such conduct being engaged in by Santos or other participants in the gas markets in the future.”

AER chair Clare Savage said the Court’s decision reinforced the importance of accurate record-keeping for gas market participants.

“The Day Ahead Auction is vital to moving gas between markets on the east coast and relies on companies both keeping accurate records and providing pipeline operators, and ultimately AEMO with the information it needs to operate the Auction.

“It is crucial that trust and confidence in the Day Ahead Auction is maintained for it to continue to deliver benefits to consumers.”

Related article: Regulator fines Jemena over alleged gas breaches

In addition to the penalty, the Court ordered the appointment of an independent reviewer to review Santos’ processes to ensure compliance with rule 666(1) and provide a report containing recommendations for any action to be taken by Santos.

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Regulator announces final determination on electricity prices https://esdnews.com.au/regulator-announces-final-determination-on-electricity-prices/ Wed, 22 May 2024 23:58:07 +0000 https://esdnews.com.au/?p=42498 The Australian Energy Regulator (AER) has released its final determination on electricity prices for the 2024–25 Default Market Offer (DMO 6). The DMO is an electricity price safety net that […]

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The Australian Energy Regulator (AER) has released its final determination on electricity prices for the 2024–25 Default Market Offer (DMO 6).

The DMO is an electricity price safety net that protects consumers from unjustifiably high prices. The DMO also acts as a reference price on bills so all customers can compare plans with other retailers.

Related article: AER report shows wholesale energy prices down in 2023

“Electricity affordability remains a top cost-of-living issue for households. Many customers are facing challenges to absorb higher electricity prices in the current economic climate. In recognition of this, the AER has placed increased weight on protecting consumers,” the regulator said in its final determination.

As proposed in its draft determination, the AER has adjusted the approach used to calculate the retail allowance, ensuring a reasonable profit margin for retailers but deciding not to apply an additional competition allowance in DMO 6.

From 1 July 2024, most residential customers could have price reductions of between 1% to 6% while some may have increases between 2% and 4% depending on their region and whether they have controlled load (such as underfloor heating or a pool pump running overnight).

Most small business customers could see reductions between 1% and 9% while some could face modest increases of around 1% depending on their region.

AER chair Clare Savage said that since the 2023-24 DMO 5 was released, there has been movement in wholesale and network costs—the two largest cost components of the DMO.

The wholesale energy costs in DMO 6 have decreased by approximately 21% in South Australia and between 7% and 11% across NSW. In South East Queensland, costs have only decreased slightly (0.2%).

“The easing in wholesale prices has been offset by the pressures currently observed in the poles and wires—network prices,” Savage said.

Key drivers of increases in network prices include adjustments for under-recovery of revenue in prior years, updated capital and operating costs, increases in inflation and interest rates, increases in incentive payments and jurisdictional schemes, and for the NSW networks, the NSW Roadmap contribution allocations.

Costs associated with managing bad and doubtful debts and an expansion in the roll out of smart meters have also resulted in increases in the retail cost component.

Related article: Origin strikes deal with govt to delay Eraring closure

“The combined effect of these various changes in costs have resulted in prices decreasing in New South Wales and South Australia, and increasing in South East Queensland,”  Savage said.

Both the Queensland Government and federal government have announced financial assistance with electricity bills to help offset these increases. Some households will also be eligible for additional targeted support under schemes provided by the Queensland, New South Wales and South Australian governments.

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Ergon fined for alleged breaches of life support rules https://esdnews.com.au/ergon-fined-for-alleged-breaches-of-life-support-rules/ Mon, 06 May 2024 21:00:39 +0000 https://esdnews.com.au/?p=42300 Queensland’s Ergon Energy has been fined $135,600 by the Australian Energy Regulator (AER) for alleged contraventions of the National Energy Retail Rules relating to life support equipment. Related article: Court […]

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Queensland’s Ergon Energy has been fined $135,600 by the Australian Energy Regulator (AER) for alleged contraventions of the National Energy Retail Rules relating to life support equipment.

Related article: Court fines Pelican Point for electricity rules breach

The infringement notices were issued as the AER had reasonable grounds to believe that Ergon Energy:

  • failed to register a customer who advised that they required the use of life support equipment (as required by rule 124(1)(a) of the National Energy Retail Rules), and
  • deregistered a customer’s premises without providing the customer with the required deregistration notices in breach of the requirements of rule 125 of the National Energy Retail Rules.

These alleged failures by Ergon Energy had the potential to harm customers because customers may not have received the life support protections they were entitled to.

AER board member Justin Oliver said all energy retailers had important obligations to support customers whose premises use life support equipment.

“Customers who use life support equipment can be especially vulnerable, so it’s vital that retailers have the systems and procedures in place to support these customers and provide them with the protections required under the National Energy Retail Rules,” Oliver said.

Related article: Ergon completes new $80M line between Isis and Gayndah

The alleged contraventions were identified as part of an investigation undertaken by the AER after Ergon Energy self-reported possible breaches of life support rules to the regulator.

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Regulator delivers final revenue decisions for networks https://esdnews.com.au/regulator-delivers-final-revenue-decisions-for-networks/ Tue, 30 Apr 2024 21:00:53 +0000 https://esdnews.com.au/?p=42248 The Australian Energy Regulator (AER) has published its final revenue decisions for six electricity network businesses—Ausgrid, Endeavour Energy, Essential Energy, Evoenergy, Power and Water Corporation and TasNetworks—for the 2024-29 regulatory […]

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The Australian Energy Regulator (AER) has published its final revenue decisions for six electricity network businesses—Ausgrid, Endeavour Energy, Essential Energy, Evoenergy, Power and Water Corporation and TasNetworks—for the 2024-29 regulatory period.

Electricity transmission and distribution network businesses are required to submit revenue proposals to the AER every five years outlining how much they intend to recover from consumers over a five-year period to provide safe, reliable and secure electricity services and address important emerging issues such as network cybersecurity, climate resilience, integration of consumer energy resources, and digitalisation.

Related article: Networks bite back at claims of ‘supernormal’ profiteering

AER chair Clare Savage said the final decisions seek to balance affordability with providing the necessary expenditure that will support the changing nature of the energy system.

“These revenue determinations have been developed during a challenging time for energy consumers and the sector more broadly. Cost-of-living pressure and affordability concerns continue to be front of mind for consumers.

“We have looked to ensure consumers pay no more than necessary for safe and reliable energy while supporting the transitioning energy market,” Savage said.

The main drivers of increased costs include inflation and rising interest rates, causing a higher rate of return in the businesses’ final proposals compared with levels in the last five years.

“We’ve seen a strong commitment from all six businesses to engage with customers and have their preferences considered and reflected in their revenue proposals,” Savage said.

The businesses have proposed expenditure in important emerging areas such as improved network resilience to address climate change-related risks, the uptake and integration of consumer energy resources (including rooftop solar, batteries and electrical vehicles), and cyber security and digitalisation measures. Innovation will enable customers, who are able to respond, with greater opportunities to reduce their bills.

“We believe there are efficient levels of funding in our decisions to allow the businesses to meet these challenges and address these priorities,” Savage said.

Related article: AER report shows wholesale energy prices down in 2023

“Our decisions support the accelerated roll-out of smart meters proposed by the Australian Energy Market Commission and the benefits they provide to the whole system by approving the cost recovery of old network-delivered meters in the quickest, lowest cost way to all customers.

“We continue to ensure the long-term interests of consumers by recognising the affordability challenges, while maintaining a focus on efficient and prudent investment to support the energy transition.”

Table showing the AER's final revenue decisions for six network businesses
The table above outlines the expected revenues for each business for the 2024-29 period, including estimated bill impacts for consumers and small businesses (nominal terms). The business names in the table link to the final decision documents.

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Australia’s third hottest summer drives energy prices skyward https://esdnews.com.au/intense-summer-contributes-to-increased-wholesale-energy-prices/ Wed, 17 Apr 2024 21:00:48 +0000 https://esdnews.com.au/?p=42117 The Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly Report reveals an unusually hot summer contributed to increased wholesale electricity and gas prices during January to March 2024 compared with […]

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The Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly Report reveals an unusually hot summer contributed to increased wholesale electricity and gas prices during January to March 2024 compared with the previous quarter.

The report also shows that average quarterly electricity prices in Queensland and Victoria increased by 20% and 9% respectively compared to the corresponding quarter in 2023.

Related article: Mixed bag for electricity prices—some to fall, some to rise

The 2023-24 summer was Australia’s third warmest on record, marked by widespread and persistent heat. During the quarter, there were 26 high price events—more than double the number experienced in the first quarter of 2023. Of these 26 events, 11 were in Queensland and five in Victoria.

Average quarterly electricity prices in other regions were between 5% and 16% lower than the corresponding quarter in 2023.

National Electricity Market average demand increased by 9% compared to the preceding quarter and was higher than the three previous first quarters, but lower than the first quarter of 2020.

AER Board member Jarrod Ball said weather events played an important role in this quarter’s price outcomes. This was most significant in northern states, particularly Queensland, where maximum daily demand exceeded the previous all-time record three times during the quarter.

“Although the summer heat and the power system event in Victoria on 13 February meant that wholesale prices in Queensland and Victoria were higher than the same time last year, all other regions were lower than the first quarter of 2023,” Ball said.

By contrast, in Victoria and South Australia there was reduced demand on the energy grid at times, resulting in first quarter minimum daily demand records due to the increased generation by rooftop solar systems on sunny yet mild summer days.

Average quarterly generation increased from last quarter and was higher than the first quarter of 2023, due to higher demand. Coal, gas and solar generation each increased from the last quarter.

Forward prices for electricity for the 2025 calendar year fell on average in all regions, with decreases ranging from $1 per MWh (QLD) to $12 per MWh (SA).

Overall, forward prices for 2024 and 2025 are now well below forward prices seen in 2022, but they are yet to return to historic levels and remain higher than 2020 and 2021.

“It’s encouraging to see forward prices for electricity fall for the next calendar year, however they continue to be sensitive to market conditions,” Ball said.

Related article: South Australian power prices down thanks to renewables

Average east coast gas market spot prices increased by 6.9% (to $11.59 per gigajoule) compared to the previous quarter but were 3.9% lower than the same quarter in 2023.

Residential and commercial gas demand was at its lowest first quarter level in a decade, continuing the same trend observed for the previous quarter. Demand from gas-powered generators was also at its lowest first quarter level for the past decade.

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Court fines Pelican Point for electricity rules breach https://esdnews.com.au/court-fines-pelican-point-for-electricity-rules-breach/ Wed, 27 Mar 2024 23:59:51 +0000 https://esdnews.com.au/?p=41925 The Australian Energy Regulator (AER) has welcomed the Federal Court’s order that Pelican Point Power Limited pay a pecuniary penalty of $900,000 for breaches of the National Electricity Rules during […]

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The Australian Energy Regulator (AER) has welcomed the Federal Court’s order that Pelican Point Power Limited pay a pecuniary penalty of $900,000 for breaches of the National Electricity Rules during a heat wave in 2017.

Related article: AER begins action over Callide C performance standards

The Federal Court found that Pelican Point breached the rules by failing to comply with its legal obligation to disclose short term availability information relating to its gas-fired power station to the Australian Energy Market Operator (AEMO) during heat wave conditions in February 2017.

Further, the Court found that Pelican Point breached the rules by failing to promptly notify AEMO that the medium term availability information previously submitted for the power station had increased.

In his judgment, Justice Besanko said, “[I]t must be acknowledged and taken into account that the nature of the obligations breached are important and are intended to enable AEMO to manage the reliability of the power system.”

AER chair Clare Savage welcomed the Court’s decision following proceedings that commenced in 2019 after the non-payment of an infringement notice issued by the AER to Pelican Point for an alleged breach of the Rules.

Savage noted that the provision of accurate and timely availability information was key to AEMO’s management of the power system and to ensure safe and reliable power supply to consumers.

“The outcome is a timely reminder of the important overarching obligation to notify AEMO of any changes to submitted information and has broad applicability for a range of participants,” she said.

Related article: AER takes Santos to court for alleged breaches of gas rules

“It is not a matter of set and forget when it comes to information submitted to AEMO— participants must continually monitor market conditions, plant capabilities and other relevant factors and notify AEMO promptly of relevant changes.”

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Mixed bag for electricity prices—some to fall, some to rise https://esdnews.com.au/mixed-bag-for-electricity-prices-says-aer/ Wed, 20 Mar 2024 00:54:43 +0000 https://esdnews.com.au/?p=41836 Benchmark electricity prices are set to fall for many Australians but are likely to rise for others according to the Australian Energy Regulator in its draft determination of the Default […]

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Benchmark electricity prices are set to fall for many Australians but are likely to rise for others according to the Australian Energy Regulator in its draft determination of the Default Market Offer for 2024-25 (DMO 6).

The draft determination sets out the approach the AER intends to take to determine the final DMO price which will be released in May. The draft determination is subject to public consultation and stakeholder feedback, along with updated network and wholesale costs, which will be reflected in the final decision.

At this time, it is estimated price changes for all residential and small business customers on standard retail plans will be less than the rate of inflation.

Related article: AER report shows wholesale energy prices down in 2023

In fact, the majority of residential customers could have price reductions of between 0.4% to 7.1% while the remaining residential customers may have increases between 0.9% and 2.7% depending on their region and whether they have controlled load. The majority of small business customers could see reductions between 0.3% and 9.7% while others could face modest increases of around 0.7% depending on their region.

AER chair Clare Savage said a range of costs were factored into this draft determination, including wholesale and network costs, environmental and retail costs.

“We know that economic conditions have put pressure on many Australians and the increases in electricity prices over the last two years has made energy less affordable for many households. In light of this, the AER has, in this decision, placed increased weight on protecting consumers.

“While wholesale markets have stabilised since their extreme peaks of 2022, this easing has been offset by the pressures we are observing in network prices. Poles and wires costs are a large component of retail prices, comprising around 40% of the price,” Savage said.

Network cost increases are being driven by inflation and interest rate rises along with under recovery of revenue due to milder weather conditions over the last year and, for New South Wales, the development of the NSW Roadmap.

Regulations require the AER to set a reasonable per-customer annual price, having regard to the costs of supply and enabling retailers to make a reasonable profit.

In line with policy guidance from Ministers, each year the AER has balanced the objectives of protecting customers from unjustifiably high prices, while allowing retailers a sufficient margin to enable them to recover costs, to compete and to offer new products and innovations to the market.

This year, in the face of cost-of-living pressures, Ministers have asked the AER to prioritise the protection of customers from unjustifiably high prices. To achieve this, the AER has reduced the “headroom” within the DMO price, designed to enable retailers who may have higher than average costs to enter the market and compete.

Related article: South Australian power prices down thanks to renewables

“Our draft determination should still allow a retailer to recover their costs and make a reasonable profit with a retail margin of 6% for residential plans and 11% for small business plans. These are higher margins than we see in other markets, such as Victoria, where strong competition remains.”

Savage said she welcomed recent data showing reductions in the prices of retailers’ more competitive market offers which are below the DMO.

“The median market offer has dropped by between 1% and 5% across most electricity distribution zones since 31 December 2023 and the most competitive market offers are now 18%-23% below the DMO price. Your retailer is required to tell you on the front page of your bill at least every 100 days if they can offer you a better deal.”

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AER begins action over Callide C performance standards https://esdnews.com.au/aer-begins-court-action-over-callide-c-performance-standards/ Thu, 08 Feb 2024 23:27:53 +0000 https://esdnews.com.au/?p=41406 The Australian Energy Regulator (AER) has instituted proceedings in the Federal Court against Callide Power Trading for failing to comply with its performance standards for the Callide C power station. […]

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The Australian Energy Regulator (AER) has instituted proceedings in the Federal Court against Callide Power Trading for failing to comply with its performance standards for the Callide C power station.

Related article: CS Energy revises Callide Unit C3 return to service

Callide Power Trading is the registered market participant for Callide C Power Station. Callide Power Trading is owned 50% by IGPC and 50% by Callide Energy—a subsidiary of CS Energy.

On the afternoon of 25 May 2021, an incident occurred involving the trip of multiple generators and high voltage transmission lines in Queensland following an initial event at the Callide C power station. This resulted in the loss of approximately 3,045MW of generation and 2,300MW of customer load being disconnected from the power system, resulting in widespread blackouts to households and businesses across Queensland.

After investigating, the AER alleges Callide Power Trading breached rule 4.15(a)(1) and clause 5.2.5(a)(1) of the National Electricity Rules in respect of the Callide C4 generating unit by failing to ensure its plant met or exceeded applicable performance standards, and by failing to plan and design its facilities and ensure they were operated to comply with those performance standards.

The failure of Callide C4’s protection systems to disconnect the generating unit from the power system resulted in the trip of multiple generators. Callide C4 has been offline since the incident.

AER Board Member Justin Oliver said, “Performance standards describe how a generating unit should perform and how it should respond to adverse events. These standards are agreed between the Registered Participant and the Australian Energy Market Operator.

“Failure to comply with these standards can risk power system security, see consumers disconnected from power supply and cause wholesale energy prices to increase during and beyond these events.”

“It’s vital that Registered Participants and Generators are aware of their performance standards and comply with them at all times so that the market and consumers aren’t wrongly exposed to the consequences of adverse events,” Oliver said.

The AER is seeking pecuniary penalties, declarations, orders for remedying the breach or preventing the recurrence of the breach, and costs.

A Callide Power Trading spokesperson said, “The AER’s proceedings allege two contraventions of the National Electricity Rules in relation to CPT’s compliance with the Callide C4 Generator Performance Standards in connection with the catastrophic failure of that generator on 25 May 2021.

Related article: Dr Sean Brady to lead independent investigation into Callide incident

“Callide Power Trading Pty Ltd will work co-operatively with the Australian Energy Regulator to resolve this matter as soon as possible.”

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AER report shows wholesale energy prices down in 2023 https://esdnews.com.au/aer-report-shows-wholesale-energy-prices-down-in-2023/ Tue, 30 Jan 2024 21:00:00 +0000 https://esdnews.com.au/?p=41265 The Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly Report reveals that average annual wholesale electricity prices in the National Electricity Market (NEM) fell by between 44% and 64% and […]

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The Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly Report reveals that average annual wholesale electricity prices in the National Electricity Market (NEM) fell by between 44% and 64% and average annual east coast gas market spot prices fell by 43% in 2023.

The drop in energy prices was attributed to milder weather conditions, lower fuel costs, fewer coal supply issues and an increase in cheap wind and solar supply.

Related article: South Australian power prices down thanks to renewables

The report also shows wholesale electricity prices during the October to December 2023 quarter fell in NSW, Victoria and SA but increased in Queensland and Tasmania compared to the previous quarter, with gas prices on the east coast spot market increasing slightly compared to the previous quarter.

Both electricity and gas prices during the quarter remained well below the record prices of 2022 and were now closer to longer term annual averages. Once retailers’ wholesale costs adjust to the lower prices going forward, prices faced by consumers should reflect these lower costs.

Electricity demand fell compared to the previous quarter between 9% and 19% in all regions except Queensland, where hot and humid periods drove increased use of air-conditioning units.

However, in periods of high demand there were five high price events, and the market remains vulnerable to more frequent high price events should temperatures increase in the January to March quarter.

The fall in electricity demand in regions outside Qld was impacted in part by rooftop solar output which increased 50% compared to the previous quarter and 17% compared to the corresponding quarter in 2022.

Combined, wind and large-scale solar reached a record high of 26% generation output in the NEM—up from a previous record share of 23% at the same time last year.

Forward prices for electricity fell in all regions for all forward quarters, reflecting mild spot price outcomes during the quarter. However, contract markets are sensitive to spot conditions and will likely be impacted if spot prices increase in the January to March quarter. Changes in forward prices also take time to be reflected in prices faced by consumers.

AER Board Member Jarrod Ball said, “Although we saw increased electricity prices in some regions and a small increase across all regions in the gas market during the quarter, these remain significantly lower than those experienced in 2022 and closer to the levels seen at the end of 2021.

Related article: Regulator fines Jemena over alleged gas breaches

“The proportion of electricity output sourced from coal and gas fell to a record low of 66%, down from 67% the previous quarter.

“Each region set a new solar output record this quarter, and although relatively little new generation entered the market, a significant increase in new entry is currently scheduled for 2024.”

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Regulator fines Jemena over alleged gas breaches https://esdnews.com.au/regulator-fines-jemena-over-alleged-gas-breaches/ Tue, 19 Dec 2023 21:00:16 +0000 https://esdnews.com.au/?p=41037 The Australian Energy Regulator (AER) has accepted a court enforceable undertaking from Jemena for alleged breaches of the National Gas Law related to the Gas Bulletin Board. Related article: AER […]

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The Australian Energy Regulator (AER) has accepted a court enforceable undertaking from Jemena for alleged breaches of the National Gas Law related to the Gas Bulletin Board.

Related article: AER takes Santos to court for alleged breaches of gas rules

The Gas Bulletin Board provides transparency in the wholesale gas market. Having up-to-date gas flow information facilitates trade in gas commodity and pipeline capacity. Greater transparency across wholesale gas markets informs price discovery and commercial decision-making and can ultimately lead to lower prices for consumers.

The AER has alleged that, on multiple occasions between October 2020 and December 2022, Jemena failed to provide the Australian Energy Market Operator (AEMO) with short- and medium-term capacity outlooks for the Gas Bulletin Board that accounted for the impact of scheduled maintenance on the daily capacity of its pipeline.

As a result, gas market participants did not have access to accurate information on available pipeline capacity on the relevant days, which may have impacted commercial decisions.

By doing so, the AER alleges Jemena breached the National Gas Law.

Jemena has paid two infringement notices totalling $135,600 in relation to the alleged breaches.

In addition to the infringement notices, the AER has accepted an enforceable undertaking from Jemena to address the conduct and minimise the risk of future contraventions. The enforceable undertaking requires the appointment of an independent expert to conduct a review of its Gas Bulletin Board systems, controls, processes and training and submit that expert’s report to the AER with Jemena’s response to each recommendation for improving compliance.

The enforceable undertaking also includes admission by Jemena that it breached its obligations under the National Gas Law and National Gas Rules.

Related article: EnergyAustralia and Incitec fined for alleged gas breaches

Payment of the infringement notices comes after the AER instituted proceedings in the Federal Court against four Jemena subsidiaries for separate alleged breaches of the National Gas Rules and National Gas Law, and fined EnergyAustralia and Incitec Pivot for alleged breaches of the National Gas Rules.

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New-look website simplifies energy plan comparison https://esdnews.com.au/new-look-website-simplifies-energy-plan-comparison/ Thu, 14 Dec 2023 23:13:06 +0000 https://esdnews.com.au/?p=40989 Energy consumers in New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory will now find it easier to compare and find energy plans using the updated Energy […]

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Energy consumers in New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory will now find it easier to compare and find energy plans using the updated Energy Made Easy website.

Related article: Game Changer reforms to improve consumer outcomes

The Australian Energy Regulator (AER), which operates the free and independent comparison site, has improved the website experience for consumers who will now be asked a few simple questions to match them with the best plans, making it easier to filter results for special offers and discounts.

There are now three ways for consumers to use the site to find and compare energy plans:

  • Using their National Meter Identifier number (found on their energy bill) for personalised plan comparison
  • Choosing the 30-second Quick Compare journey
  • Manually inputting information from their energy bill if preferred.

AER chair Clare Savage said that with many customers on old or uncompetitive plans able to save from $120-$221 a year off the default market offer price it was especially important for customers to shop around.

“The AER’s Energy Made Easy website is designed to make it easier for all consumers to take control of their power bills by helping them compare and find an energy plan to suit their needs,” she said.

“The site updates help customers with pop-ups and tips to answer all their energy plan questions, and have been informed by a review by the Australian Government’s Behavioural Economics Team and research into customer behaviour when comparing energy plans, including thousands of survey responses.

Related article: Energy retailers to include ‘better offer’ statement on bills

“Customers looking to save extra money can now see discount offers highlighted when comparing plans, and Centrelink customers can apply a filter to view plans that offer Centrepay if they choose to use this service,” Savage said.

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