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, 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
- 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 Market 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 Market 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 Market Rules.
The ERA has published the results of its investigation in the notice below. This is a requirement of clause 2.16.9F of the Market Rules.
The ERA will now bring proceedings before the Electricity Review Board.