ACCC launches energy company probe as the ‘worst’ of the crisis passes

Fresh blackout warnings have been issued for South Australia despite state and federal energy ministers saying they believe we are through the worst of the crisis.

South Australia is facing a new spate of blackout warnings, as the market operator flags possible load shedding for Tuesday evening.

The Australian Energy Market Operator (AEMO) issued a new warning, forecasting a lack of energy reserves from 6pm to 8pm on Tuesday.

The “Lack of Reserve Level 3” warning means load shedding – manual rolling blackouts to ease pressure on the system – could be required.

A separate warning was also issued for Wednesday between 6am to 12.30pm and 1pm to 11pm.

AEMO regularly revises the warnings throughout the day, and are subject to frequent change.

If load shedding is required, the first suburbs to be hit would be Woodville Gardens, Pennington, Rosewater and St Clair. Homes in each suburb would be blacked out for 45 minutes.

State Energy Minister Tom Koutsantonis said the warning didn’t paint an accurate picture.

“Companies aren’t bidding their reserves even though there’s plenty of supply available and demand is relatively low … So I’m a lot more relaxed about (those warnings),” he said.

Energy Minister Tom Koutsantonis said he was “relaxed” about the load shedding warning, confident there was enough supply in the market.

It comes as the consumer watchdog investigates price gouging by energy companies.

Both the profits and margins of the power companies will come under the microscope of the Australian Competition and Consumer Commission (ACCC), which announced the probe into the causes behind soaring gas and electricity prices on Monday.

ACCC chairwoman Gina Cass-Gottlieb said the competition regulator was “acutely aware of the pressures that rapidly rising energy prices are placing on Australian households and businesses”.

“Under direction from the federal government, we will use our full information-gathering powers to provide greater transparency around the factors influencing electricity and gas prices, including profits and margins from a wide range of energy companies.” Ms Cass-Gottlieb said.

Ms Cass-Gottlieb said the ACCC planned to report back to the nation’s energy ministers next month on the current state of the market, in which average spot prices rose five-fold to as high as $590/MWh.

Federal Energy Minister Chris Bowen was confident Australia had passed through “the worst” of the crisis.

Mr Bowen said the energy system was “working” after AEMO took the unprecedented action of suspending the wholesale electricity market, effectively taking control of the grid.

“The national energy market continues to function under pressure but nevertheless we are in a situation where more generation has come back on board and the system has avoided any blackouts and any load shedding,” he said.

Mr Koutsantonis said SA, as the Australian Energy Regulator’s lead legislator, was preparing to pass new Bills ensuring greater market and gas pipeline transparency ahead of another meeting of state and federal energy ministers in August.

Finalising a new capacity mechanism remains the top priority. The new system would reward power producers for having capacity available to generate power, rather than just for the electricity they produce.

Mr Koutsantonis labelled it the “most important energy reform in the past 20 years”, while Mr Bowen said its implementation was progressing “at pace”.

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