Class action: Stanwell, CS Energy accused of price manipulation
A class action launched by Queensland pastoralists on behalf of 40,000 customers accusing state-owned energy generators of creating massive artificial price hikes has failed.
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The largest energy class action in Australia accusing two Queensland state-owned electricity generators of manipulating the price brackets of their wholesale power packages to create massive artificial spikes in energy market prices for their own profit, has failed.
The case has been ongoing in the Federal Court for almost four years against state-owned generators CS Energy and Stanwell, who dominate Queensland’s power generation.
The class action was initiated by Ronnie and Nick Adamson from the Stillwater Pastoral Company, on behalf of 40,000 customers who paid for electricity in Queensland between January 2015 and January 2021.
It was the subject of an eight-week hearing in June, before Justice Sarah Derrington delivered her judgment on the overall proceeding.
Justice Derrington referred to one of the 13 rebidding incidents put forward by lawyers for Stillwater Pastoral Company during the hearings - February 18, 2016.
At 3.26pm, CS Energy moved 250 megawatts from the $299.95 band to $13,800 price band. During the next dispatch interval, the 250 megawatts was moved from the $13,800 price band back down to one of the lowest price bands.
“The effect of the rebid was the reduced supply [of electricity] in the mid-tier price band and forced the National Electricity Market Dispatch Engine [NEMDE] to look for additional supply in the higher price bands,” Justice Derrington said.
As a result, the electricity price spiked to over $12,000 per MWh in the first interval after the rebids, and by 4pm that day the price was still $2843.40 per MWh.
The allegation put forward by Stillwater Pastoral Company on behalf of consumers was that Stanwell and CS Energy employed “short notice rebidding” and deliberately delayed placing rebids so other generators were unable to mount a competitive response.
However, in outlining the reasons for her judgment Justice Derrington said other generators did compete.
“I have accepted that Stanwell and CSE hoped they would cause price spikes over the summer period to improve increased contract prices,” she said.
“But the evidence established that throughout the conduct period, price spikes were an expected outcome predicted by the National Electricity Market Dispatch Engine.
“Although Stanwell and CSE did submit late rebids, such rebids were neither prohibited nor is there evidence that they were targeted at responses by other generators.”
In her findings, Justice Derrington concluded that Stanwell and CS Energy did not “take advantage of their market power by engaging in the short notice rebidding”.
She further ruled that the energy generators did not “take advantage of their market power for the purpose of deterring or preventing [others] from engaging in competitive conduct in the market”.
When considering whether the alleged conduct by Stanwell and CS Energy constituted a contravention of section 46 of the Commonwealth’s Competition and Consumer Act, Justice Derrington concluded it did not.
Justice Derrington therefore dismissed the case, and a further hearing will be held in March next year to determine costs.
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