The ACCC has granted interim authorisation for a range of measures allowing participants in the gas and electricity markets to work together to support Australia’s energy supply and systems during the current crisis.
An urgent application for interim authorisation was lodged by the Australian Energy Market Operator (AEMO) on Wednesday this week. The ACCC has moved quickly to consider and approve the interim application.
The measure allows AEMO and industry participants to co-ordinate efforts to address issues that may impact the safety, security and reliability of Australia’s energy supply during a period when our energy system is facing significant challenges and risks.
Under the interim authorisation, under certain conditions, energy sector participants are able to minimise the risk of outages through measures that would otherwise raise competition concerns, including by sharing essential personnel, parts and equipment, as well as certain operational information.
AEMO has sought authorisation for nine months. Interim authorisation will continue until the ACCC has made a final determination on this application, having taken the views of interested parties into account.
“Russia’s invasion of Ukraine has heavily impacted global gas supply and prices, and combined with the extreme weather conditions this winter, and a reliance on ageing coal-fired power stations, the Australian energy market has come under unprecedented pressure,” ACCC Chair Gina Cass-Gottlieb said.
“A reliable and secure energy supply is essential both for industry and the community. Co-operation between the industry participants in the short term is appropriate at this time for building resilience in the gas and electricity supply systems and minimising the risk of load shedding and blackouts.”
The ACCC has imposed strict conditions on the authorisation, including that AEMO record and report regularly on any measures taken or agreements reached between participants, and that the ACCC be able to attend any meetings that are held during the authorisation period.
“We will be very closely monitoring the conduct of the energy providers. The ACCC can vary or revoke this interim authorisation at any time if there is concern that the parties are engaging in conduct that is anti-competitive, as opposed to being reasonably necessary to address the energy crisis. Through the course of consultation, we will be working to limit the scope of the authorisation to only that which is reasonably necessary,” Ms Cass-Gottlieb said.
AEMO sought authorisation for nine months to help address potential energy supply shortfalls over the current winter through to the end of the peak summer period.
“The ACCC will seek to ensure that any measures taken during this current crisis do not have adverse effects on competition into the future,” Ms Cass-Gottlieb said.
AEMO and industry participants have had authorisation for similar coordination conduct to respond to issues arising from the impact of COVID-19. The current COVID-based authorisation was granted in February and will continue until 27 October 2022.
More information is available on the ACCC’s website.
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 are covered by the interim authorisation include electricity generators, retailers, network service providers, metering service providers, and many other industry specific service providers. Gas industry participants that are covered include producers, traders, retailers, storage providers and many other industry specific service providers.
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.