The ERA monitors the effectiveness of the Wholesale Electricity Market (WEM) in meeting the wholesale 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 WEM Rules, for the trading period since 31 March 2016 the ERA is investigating whether:
- Synergy’s price-quantity offers may have exceeded its reasonable expectation of the short run marginal cost of generating the electricity; and
- 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.
The ERA is continuing its investigation and on 25 January 2018 extended the time to complete its investigation to 26 July 2018 and again on 26 July 2018 to extend the deadline to 25 January 2019. The WEM Rules allow this timeframe to be extended.