• Monitoring the Effectiveness of the Market

  • In this section

  • The Economic Regulation Authority (ERA) has obligations under clause 2.16 of the Wholesale Electricity Market Rules with respect to Monitoring the Effectiveness of the Market. AEMO has obligations to provide support to the ERA in carrying out these functions.

    Under clause 2.16.9B of the Wholesale Electricity Market Rules, where the ERA concludes that:

    (a) prices offered by a Market Generator in its Portfolio Supply Curve may not reflect the Market Generator’s reasonable expectation of the short run marginal cost of generating the relevant electricity;
    (aA) prices offered by a Market Generator in its Balancing Submission may exceed the Market Generator’s reasonable expectation of the short run marginal cost of generating the relevant electricity; or
    (b) prices offered by a Market Generator in its LFAS Submission may exceed the Market Generator’s reasonable expectation of the incremental change in short run marginal cost incurred by the LFAS Facility in providing the relevant LFAS,

    and the ERA considers that the behaviour relates to market power, the ERA must as soon as practicable, request an explanation from the Market Participant which has made the relevant STEM Submission, Balancing Submission or LFAS Submission and investigate the identified behaviour.

    Under clause 2.16.9C, the Market Participant must submit the explanation requested under clause 2.16.9B within two Business Days from receiving the request.

    Clause 2.16.9D requires the ERA to publish a Market Participant’s response to the ERA’s request for an explanation under clause 2.16.9C on the market website.

    Explanations requested by the Economic Regulation Authority

    On 26 July 2017, the ERA requested an explanation from Synergy under clause 2.16.9B of the Wholesale Electricity Market Rules. On 28 July 2017, the ERA received an explanation letter from Synergy. On 31 July 2017, the ERA published a notice to its website advising of the investigation into Synergy’s pricing behaviour.

    Previous investigations conducted by the Economic Regulation Authority

    Vinalco Energy Pty Ltd (No 1)
    Current Status: The Economic Regulation Authority has completed its investigation and published its findings.

     

    Date Relevant Details
    18/06/14 The IMO requested an explanation from Vinalco Energy under clause 2.16.9B(c).
    20/06/14 Vinalco Energy provided the explanation requested under clause 2.16.9B. The explanation is available here.
    23/06/14 The IMO advised the Economic Regulation Authority of its conclusions under clause 2.16.9B(d).
    19/12/14 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 23/12/14 to 30/04/15. The IMO’s extension notice is available here.
    29/04/15 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 30/04/15 to 30/06/15. The IMO’s extension notice is available here.
    29/06/15 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 30/06/15 to 30/10/15. The IMO's extension notice is available here.
    30/10/15 The Economic Regulation Authority has completed its investigation and published its findings. A copy of the ERA's notice is available here
    Vinalco Energy Pty Ltd (No 2)
    Current Status: The Economic Regulation Authority has completed its investigation and published its findings.

     

    Date Relevant Details
    22/07/14 The IMO requested an explanation from Vinalco Energy under clause 2.16.9B(c).
    24/07/14 Vinalco Energy provided the explanation requested under clause 2.16.9B. The explanation is available here.
    28/07/14 The IMO advised the Economic Regulation Authority of its conclusions under clause 2.16.9B(d).
    19/12/14 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 28/01/15 to 30/04/15. The IMO’s extension notice is available here.
    29/04/15 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 30/04/15 to 30/06/15. The IMO’s extension notice is available here.
    29/06/15 The Economic Regulation Authority advised the IMO that it had extended the investigation timeframe from 30/06/15 to 30/10/15. The IMO's extension notice is available here.
    30/10/15 The Economic Regulation Authority has completed its investigation and published its findings. A copy of the ERA's notice is available here