Piper Alderman launches power prices class action against Stanwell and CS Energy

A Brisbane lawyer has been on a roadtrip drumming up support for a class action against two Queensland state-owned power generators. So far 5000 businesses and consumers have signed up.

SURGING power prices in Queensland are set to be challenged in court with the two-state owned generators Stanwell and CS Energy in the firing line.

Piper Alderman has launched an energy class action against the two generators for allegedly misusing their market power to inflate energy prices.

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Piper Alderman special counsel Lachlan Lamont says the basis of the case is that the generators are using “gaming strategies” to create artificial scarcity of supply in the National Electricity Market which results in spikes in prices.

Lamont says this conduct amounts to a contravention of the competition laws which prohibits misuse of market power.

Piper Alderman says that since 2007 Australian electricity prices have increased faster than any other OECD country with Queensland prices rising faster than any other state or territory. One major manufacturer feeling the pinch of unsustainable high power prices is Rio Tinto which this week wrote down the value of its Boyne aluminium smelter by $US118m and warned the future of 1000 workers at the plant depended on cheaper energy.

Lamont has already signed up 5000 businesses and consumers to the class action and has been touring Queensland regional areas to drum up support.

He recently met with canegrowers in Bundaberg which have long been victims of high power prices. Lamont say the only solution is to break up the big generators so the market becomes more competitive.

But he points out state governments - no matter who is in power are reluctant to do that because of the “super profits” they reap from the generators. “It really is taxation by stealth,” he says. Watch this space!

Both Stanwell and CS Energy have vowed to defend the action and refuted the allegations of misuse of market power being made by Piper Alderman.

Stanwell says it has an impeccable record of compliance with all of the laws and rules which govern the National Electricity Market and the law firm has been “very selective in their publication of out-of-context snippets from detailed and complex regulatory reports.”