In proceedings brought by the Australian Energy Regulator (AER), the Federal Court found that Pelican Point Power failed to comply with its legal obligation to disclose short term availability information to Australian Energy Market Operator (AEMO).
On 8 February 2017, South Australia experienced heat wave conditions which resulted in high customer demand and reduced generation capacity. In the late afternoon of that day, the power system in the region was not in a secure operating state for over 30 minutes, which required AEMO to declare a ‘Lack of Reserve Level 3’ event and direct an interruption of customer supply (also known as ‘load shedding’) in order to restore power system security.
Following an investigation into the event, the AER had concerns that Pelican Point’s conduct impaired AEMO’s ability to manage the power system.
In his decision, Justice Besanko found that the central issue in this case was the availability of gas transport to deliver gas to the power station.
“By early February 2017, it ought to have been clear to [Pelican Point] that it could reasonably expect to obtain sufficient gas transport to operate [the power station] on 8 February 2017,” Justice Besanko said.
However, the Court found that Pelican Point did not contravene the National Electricity Rules in relation to its obligation to submit medium term availability information to AEMO about its Pelican Point Power Station in South Australia.
AER Chair, Clare Savage, said that she was pleased with the Federal Court’s decision and that it reinforces the critical importance of generators providing timely and accurate information to the market operator, and the AER’s ongoing work to support power system security in the context of the energy transition.
“Generators must provide complete, accurate and up-to-date information to AEMO so it can manage the power system and ensure safe and reliable power supply to consumers,” Ms Savage said.
“Failure to do so can unnecessarily risk power system security and contribute to major market events.
“It remains one of our compliance and enforcement priorities to support power system security by focusing on generators’ compliance with obligations concerning offers, bids and capability information.
“We will continue to monitor the market, investigate conduct by generators that contributes to these events and take enforcement action where warranted.”