States gang up over power prices

THE eastern states have thwarted attempts to stop electricity generators exploiting the market to push up prices and electricity bills.

At a national meeting of energy ministers NSW, Queensland and Victoria joined forces to block attempts by the South Australian Government to ban the so-called "gaming" of the wholesale electricity market.

Uniting Communities advocacy manager Mark Henley said the electricity generation companies should be stripped of their profits and fined if they were found to have falsely inflated prices on the electricity spot market.

"There needs to be some strong action, including fines, because it is cheating and against the spirit of the rules," Mr Henley said.

"This fight has been going on for four years because generation capacity can be withheld from the market deliberately to force up the price," he said.

Studies have shown SA is the worst-affected state because of our small number of generation companies and heatwaves which create almost as much demand as generation capacity.

During one extreme heat day in SA this summer, electricity generators were paid the maximum allowable amount for their power, $12,500 per MWh, when the normal average price is less than $100.

These costs are then passed on to consumers.

Energy Minister Tom Koutsantonis said South Australia was bitterly disappointed that the bigger states had thwarted a national approach to preventing power companies rorting the energy market.

The Advertiser has learnt the matter was raised at the December meeting of energy ministers but rejected, including by the NSW government which owns generation assets which stood to lose from the reform.

Mr Koutsantonis said: "South Australia is doing everything it can to ensure that reforms to the energy market ease the cost-of-living pressures on electricity customers."

"NSW Premier Barry O'Farrell and his power generators are gaming the market at the expense of South Australian consumers and that simply can not go on."

Mr Henley said the role of NSW in rejecting the reform should be reviewed by Federal Government regulators.

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