2 months ago
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Western Australia’s largest coal-fired electricity generator is fighting a $5 million fine from the energy watchdog for allegedly overcharging customers last year, which inflated costs on the whole electricity market by about $30 million.
The Economic Regulation Authority has accused Bluewaters Power of pricing electricity higher than allowed under WA’s complex energy rules.
Bluewaters Power station in Collie.Credit: Bluewaters
Under the grid rules, companies selling into the state’s wholesale electricity market can only sell it at a rate deemed the “reasonable cost of producing that electricity”.
The authority investigated Bluewaters’ sales and determined that its impact on the whole market tallied about $30 million. It subsequently fined the company $5 million.
“Bluewaters is the third-largest generator in the market, and has been active for many years, and yet we have found that it has made a significant number of irregular price offers during the investigation period,” authority chair Steve Edwell said.
“Bluewaters’ conduct has had a material effect on prices in the real-time market, which is why we believe a significant financial penalty is warranted.”
However, Bluewaters denied it overcharged customers and vowed to fight the penalties at the Electricity Review Board.
“Bluewaters was extremely disappointed to learn of the ERA’s determination that Bluewaters breached the wholesale electricity market rules and that the ERA has decided to impose civil penalties against Bluewaters,” a spokesman said.
“The alleged breaches relate to periods of time when Bluewaters faced coal and water shortages and was managing its generation so as to ensure Bluewaters could continue to be available for peak demand periods.
“Bluewaters lost significant profits as a result of reduced production and the requirement to purchase electricity from the spot Real-Time Market to supply its customers.”
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The spokesman accused the authority of misunderstanding the facts of the case.
“Bluewaters does not agree with the ERA’s estimate of the impact to the wholesale electricity market as only approximately 10 to 15 per cent of electricity is transacted through the spot market,” he said.
“Bluewaters considers that the ERA has misunderstood the relevant facts and has incorrectly applied the law.
“Bluewaters has applied to the Electricity Review Board to review the ERA’s determination and to have the civil penalty notices set aside.”
Bluewaters has two 217-megawatt coal-fired power units about 4 kilometres north-east of Collie that produce about 15 per cent of WA’s electricity.
It also supplies energy to major industrial customers, including the Boddington gold mine and the state electricity generator Synergy.
A spokesman for Energy Minister Amber-Jade Sanderson said it wasn’t appropriate to comment on matters before the electricity board, but the government expected generators to operate lawfully to customers were not disadvantaged.
“The state government regulates pricing for households and small-use business customers, and it continues to honour its commitment to cap electricity prices to less than inflation,” he said.
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