Electricity Review Board hearing 15 August 2016

ERA – Economic Regulation Authority

Sep 02
Electricity Review Board hearing 15 August 2016

On 15 August 2016, the Electricity Review Board (ERB) issued an order outlining proposed activities to review the conduct of a Market Participant (Vinalco Energy Limited) in the Wholesale Electricity Market (WEM).  This follows an application by the Independent Market Operator to the ERB that Vinalco had contravened rule 7A.2.17 (WEM rules) and offered electricity at prices above its reasonable estimation of short run marginal cost.  Vinalco is wholly owned by Synergy.

The board appointed to review the application was established in July with the following timetable:

  • 16 Aug – Directions hearing ERB;
  • 26 Aug – Vinalco to provide a draft statement of proposed facts;
  • 16 Sep – IMO to provide Vinalco with any proposed amendments;
  • 30 Sep – both parties confer on what information is agreed and what is in dispute; and
  • 7 Oct – production of a statement on what information is agreed and what facts or issues are not agreed and which are to be advanced via a hearing of the ERB.

Background

The ERB can be established when an application is received to:

  • review a decision of the Economic Regulation Authority or the Minister for Energy in relation to regulated electricity networks covered by the Electricity Industry Act 2004; and
  • perform certain determination and appeal functions relating to decisions of the Independent Market Operator and the conduct of market participants in the wholesale electricity market.

When an application for review is received, the Attorney General selects a legal practitioner from a panel of legal practitioners to take on the role of Presiding Member.  The Presiding Member selects two experts from a panel of experts.  These three Members constitute the ERB.

The application by IMO follows an investigation carried out by the Economic Regulation Authority in 2015 that determined Vinalco had offered electricity at prices that:

  • exceeded Vinalco’s reasonable expectation of the SRMC of generating the relevant electricity; and
  • this behaviour related to market power.