The Guardian March 26, 2003


South Australian electricity suppliers "punished"

by Bob Briton

Operators of several South Australian power plants were fined recently by 
the National Electricity Tribunal for failing to provide clear and accurate 
information about the availability of power during the Moomba gas crisis in 
January.

At one stage during a disruption to gas supplies, it appeared that gas-
fired plants would be forced to cease production and cause a crippling 
electricity shortage in SA. Rapid repairs to the Moomba plant prevented 
such an eventuality.

Questions arose, however, about the behaviour of a number of power 
generators during the crisis. State Treasurer Kevin Foley accused NRG 
Flinders of profiteering by withholding 170 MW of electricity from the 
market and raising its asking price for power from $269 a megawatt hour to 
$9697.

Last week the Tribunal imposed a fine of $25,000 on NRG for providing 
inadequate or misleading information about the availability of electricity 
from its two Port Augusta plants. The body held back from finding that the 
company was "gaming" the system and, for this reason, did not impose a 
heavier fine.

Origin Energy was given a $50,000 for similar offences involving its 
Ladbroke Grove plant while International Power had already been penalised 
to the tune of $10,000 for providing unclear information about the 
availability of supplies from its Dry Creek and Minarto power stations.

The National Electricity Code Administrator, SA's Essential Services 
Commissioner and state Energy Minister Pat Conlon have all expressed their 
concern at the lightness of the penalties. Adelaide's daily Advertiser went 
so far as to suggest in an editorial that the present maximum penalty of 
$100,000 for these sorts of practices should be increased to "$1 million at 
least"!

None of the parties listed above were reported as questioning the 
Tribunal's findings, which did not hold the operators guilty of trying to 
make huge windfall profits during the gas crisis.

Perhaps the recent behaviour of NRG Flinders, for example, is being excused 
on the occasion in question because it didn't get any buyers for its 
electricity at its massively inflated price.

The recent transgressions of the electricity code follow a pattern going 
back to the day the utility was privatised. On one notable occasion  
December 17th last year  NRG was able to withhold supply and force up the 
spot price of electricity from $59 MW/hour to $3012 MW/hour.

This produced earnings of $2.17 million in one afternoon. A $10,000 fine 
could be paid out of the petty cash tin of an operation like that. A 
million dollar fine could even be factored in if returns like that of 
December 17th can be had.

It is hardly surprising that more and more commentators are starting to 
give voice to what SA's electricity consumers have been saying for some 
time  the state's electricity utility should never have been privatised 
and that it should be put back into public ownership as soon as possible.

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