Pelican Point power plant owners Engie in court over February 2017 blackout

When 90,000 Adelaide homes were hit by a blackout, a gas-fired power plant sat idle. Now, the Federal Court is considering if the plant’s owners should be penalised.

Power companies cannot withhold electricity from the market because it would cost them too much to generate it, the Federal Court has heard.

“Price is not relevant,” Andrew McClelland QC said.

Representing the Australian Energy Regulator in a case against the Pelican Point gas-fired power station over the 2017 blackout in SA that affected 90,000 homes, Mr McClelland said the key issue was whether fuel was available.

Availability of a generator must be disclosed to the Australian Energy Market Operator even if this went against a company’s commercial considerations, he said.

If a generator was forced to turn on, electricity market rules made provision for a company to claim compensation, he said.

The regulator wants the court to penalise Pelican Point, owned by Engie, because one of its units at the Outer Harbor facility sat idle as temperatures soared to 42C in Adelaide on February 8, 2017.

Electricity prices spiked above $13,000/MWh — compared to that year’s average $109/MWh — and the state ran short of supply, forcing the blackout.

Mark Hoffmann QC, representing Pelican Point, said several issues meant the generator was not available.

“It’s not a simple process,” he said.

Pelican Point power station at Outer Harbor

The unit was overdue for a maintenance overhaul, eventually undertaken two months later for $40 million.

There were issues about the minimum time a generator had to run once switched on and uncertainty about availability of staff.

But an overriding issue was availability of gas because Pelican Point did not have a firm contract in place to guarantee supply, Mr Hoffmann said.

Justice Anthony Besanko, who presided over the case management hearing, adjourned the matter to April next year.