Watchdog finds WA power generators could be reaping illegal profits

ABC NEWS (Australia)

The state's economic watchdog says the cost of electricity is being driven up by tens of millions of dollars by some Western Australian power producers that are charging more than they're allowed. The authority has singled out Bluewaters Power, the largest privately owned generator in WA, which is now facing a five million dollar fine.

Transcript

00:00How the electricity grid operates is a mystery to many, but those keeping an eye on it have

00:08found power generators could be reaping more profit than they're allowed.

00:13The consequences of market power basically is that consumers pay more.

00:16In Western Australia, generators are paid to ensure they can provide electricity when

00:21required and are only allowed to sell the electricity at cost.

00:25But according to WA's economic watchdog, that rule is being breached more and more frequently.

00:31The overall impact of generators mispricing their energy in the past two years has been

00:40an overall market impact of $110 million.

00:43In the most recent case, Steve Edwell alleges the state's largest privately owned generator

00:48Blue Waters Power has increased the cost of electricity by $30 million over eight months

00:55and is proposing a $5 million fine.

00:58Blue Waters is disputing the findings, saying the company was facing coal and water shortages

01:03and actually lost significant profits as a result of reduced production.

01:08Alinta is also accused of driving up costs by $66 million in eight months, which it's

01:14also disputing.

01:15One thing both the regulator and industry do agree on is the market and the rules have become

01:20increasingly complex with the uptake of renewable energy.

01:24Nationally, the rules are different, but the Australian energy regulator says there are

01:28some providers driving up prices to maximise profits, which, while legal, can be inefficient

01:34and harmful for consumers.

01:36The regulator says it's part of the reason why electricity prices can remain high despite

01:41increasing renewable generation.

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