’Simply not true’: War of words between law firm, providers
THE LAW firm behind a class action over alleged electricity price manipulation has hit back at claims by Stanwell and CS Energy they were given a clean bill of health by the Australian Energy Regulator.
Every person and business in Gladstone who paid an electricity bill between 2014 and 2019 can join in the class action by Piper Alderman.
Piper Alderman partner Greg Whyte said claims by the electricity companies the AER had given the tick of approval to alleged wholesale price spikes was "simply not true."
"In its 2018 report on the wholesale electricity market the AER stated that Stanwell and CS Energy 'can exercise market power due to their dominant market position' and that 'over the past five years rebidding resulted in price spikes and volatility'," Mr Whyte said.
"The rebidding described by the AER is the unlawful gaming we are accusing Stanwell and CS Energy of engaging in."
Claims by CS Energy and Stanwell that high temperatures resulted in price spikes, Mr Whyte said, had also been proven false by the AER.
"That is remarkable because the evidence shows they typically deploy these strategies on days of high temperatures and high demand," he said.
"The AER has reported on this too. In its 2015 report on the market the AER said 'From November 2014, generators including Stanwell, CS Energy and Callide periodically rebid large volumes of capacity from low to very high prices late in a trading interval'. 'The strategy was typically used on days of high temperatures and high energy demand, and often when import capability on transmission interconnectors was limited'."
CS Energy can't use its market power, Mr Whyte said, to flout laws.
"While CS Energy state they have bid within the rules of the market, those rules require them to comply with the competition laws of this country," he said.
"Whatever the market rules might be, they can't use their market power to flout the laws of the land to make extraordinary profits at the hands of Queensland businesses and consumers. "CS Energy's return on equity in 2017 was 58.9 per cent."
Mr White also returned serve to Queensland Energy Minister, Dr Anthony Lynham, stating the government directed Stanwell to alter its bidding strategies in 2017.
"Isn't it a remarkable thing that the government has to invoke emergency powers under the Electricity Act to direct one of its generators to alter its bidding practices," he said.
"Why would it have to do that unless something was very, very wrong?
"And why on Earth wasn't it done in 2013, when the South Australian government petitioned the Australian Energy Market Commission to change the market bidding rules to stop this behaviour?
"Or in 2016 when the Queensland Productivity Commission recommended the government require CS Energy and Stanwell to enter into a voluntary code of conduct restrain their bidding practices - a recommendation the government rejected?
"And why on earth did they revoke that direction in 2019?"
The statement by Dr Lynham that the government was following the ACCC direction by establishing Clean Co, Mr Whyte said, was also wrong.
"That is just not right," he said.
"The ACCC recommended the Government divide its existing generation assets into three generation portfolios of a similar size and mix of generation technologies.
"CleanCo has one gas generator and the rest are small hydro units.
It's stated plan is to develop renewable generation capacity.
"It has none of the coal-fired assets of Stanwell or CS Energy and at present it is only about a quarter of the size of each of Stanwell and CS Energy."
A CS Energy statement released yesterday spoke of the companies disappointment in the class action.
"We are extremely disappointed by the proposed class action by Piper Alderman and their privately-funded backers, LCM Finance," the statement said.
"We are a proudly Queensland-owned and based company that provides power to some of our state's biggest industries and employers.
"More than 500 of our staff live and work in the Queensland communities where we operate, and we will continue to support them and the customers who rely on us to power their operations every day.
"We are particularly concerned on behalf of all Queensland consumers about some of the promises being made to vulnerable families by a privately-funded class action in what has been a tough year for many."
CS Energy said its priority remained to deliver competitively priced power to the state.
"Our number one priority, as always, is to safely deliver reliable and competitively-priced electricity to power our economy - Queenslanders have had the lowest average wholesale electricity prices in the National Electricity Market for the past three years," the statement said.
"We will continue to provide jobs and opportunities that support Queensland families and businesses."
Dr Lynham's office, and Stanwell have also been contacted for comment.
To join in the class action visit the website.