Energy industry cooperation authorised with strict conditions

The Australian Energy Market Operator (AEMO) and participants in gas and electricity markets have been authorised to cooperate on measures to secure Australia’s energy supplies during the COVID-19 pandemic.

The authorisation granted by the ACCC today allows AEMO and energy industry participants to share essential personnel, essential inputs such as parts and equipment, and information about the operation of their facilities. They will also be permitted to co-ordinate repairs and maintenance.

“It is essential that Australian businesses and households have access to reliable and efficient energy supplies. The ACCC’s authorisation will allow industry to work together in a way that will help to minimise the risk of short-falls, particularly over the summer period,” ACCC Commissioner Stephen Ridgeway said.

“This will also allow AEMO and industry participants to coordinate their busy maintenance period after summer, including on important repairs that were delayed during 2020 because of COVID-19. This co-ordination will also allow them to minimise the chance of COVID-19 outbreaks within facilities.”

Cooperation between energy market participants under the proposed authorisation must be facilitated by AEMO. It does not allow the sharing of information about wholesale or retail energy prices, retail costs or profits; or any agreements relating to these issues.

The conditions of authorisation are similar to those that have applied to AEMO’s interim authorisation granted in April 2020 and will apply for the full duration of the authorisation, until 31 May 2021.

AEMO must report publicly on any coordination undertaken under the authorisation. The authorisation also ensures that any agreements between parties cease when the authorisation expires.

“We’ve already seen benefits of the interim authorisation, through the sharing of information and the implementation of COVID-19 precautions at facilities. For example, AEMO has been coordinating maintenance at generators in Victoria and Queensland so that more generation capacity is available to meet demand during summer,” Mr Ridgeway said.

More information is available on the ACCC public register at Australian Energy Market Operator.

Background

AEMO manages electricity and gas markets and systems across Australia to ensure a reliable, secure, affordable and sustainable energy system. Its members include government and industry participants.

Electricity industry participants that might qualify for the authorisation include electricity generators, retailers, network service providers, metering service providers, and many other industry specific service providers. Gas industry participants that might qualify include producers, traders, retailers, storage providers and many other industry specific service providers.

AEMO lodged its application for authorisation and request for interim authorisation on 30 March 2020. The range of conduct proposed by AEMO and the duration of authorisation sought were varied by AEMO in April, May and July.

Note

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant an authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

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