The ERA monitors how effectively the Wholesale Electricity Market meets the market objectives. This includes monitoring prices offered by market generators and investigating whether participants’ behaviour is related to market power.
On 26 July 2017, the ERA notified the Electricity Generation and Retail Corporation, trading as Synergy, that it had commenced an investigation into price-quantity offers submitted by Synergy in the Balancing Market.
Pursuant to clause 2.16.9B(aA) of the Wholesale Electricity Market Rules (WEM), for the trading period since 31 March 2016, the ERA investigated whether:
- Synergy’s price-quantity offers may have exceeded its reasonable expectation of the short run marginal cost of generating the electricity
- the behaviour relates to market power
In its notification to Synergy on 26 July 2017, the ERA requested an explanation from Synergy for its pricing behaviour. This is a requirement of clause 2.16.9B of the WEM Rules. Synergy’s explanation is available below.
Conclusion of investigation
The ERA has completed its investigation into Synergy’s pricing behaviour under clause 2.16.9B of the WEM Rules.
The ERA has found Synergy to have offered prices in its balancing submissions that exceeded its reasonable expectation of the short run marginal cost of generating the relevant electricity, and that this behaviour was related to Synergy’s market power. This is prohibited under clause 7A.2.17 of the WEM Rules.
On 3 April 2019, the ERA published the results of its investigation which is available in the table below. This is a requirement of clause 2.16.9F of the WEM Rules.
The ERA brought proceedings before the Electricity Review Board. The matter was heard in May and June 2021.
On 25 November 2022, the Electricity Review Board released its determination endorsing the ERA’s application. The Board found that for 11,012 Trading intervals between 16 April 2016 and 10 July 2017 Synergy offered its generation into the energy market based on inflated costs and that these price offers related to Synergy’s market power in contravention of clause 7A.2.17 of the WEM Rules.