AER releases its 1 October 2016 significant price variation report: Longford gas facility shutdown

Pricing report into Longford Gas Facility shutdown signals further work on information priorities during emergency events

The Australian Energy Regulator (AER) today released its Significant Price Variation Report into the Saturday 1 October 2016, Longford Gas Production Facility shutdown that caused gas prices to spike. 

The investigation found the Longford shutdown was caused by the unusual failure of both on-site electricity generators. The majority of Victorian and some New South Wales consumers receive their gas from the Longford facility, making the task of maintaining system security and supply following an outage critical to consumers.

During this shutdown the Australian Energy Market Operator (AEMO) was able to maintain system security and supply despite several other challenging energy events.

These events included higher gas demand from South Australia’s electricity generators following the SA state-wide blackout, three days earlier, and the risk of a contingency gas event in Sydney.

We identify several follow up actions in this report, that will be explored to possibly improve accurate and timely information to stakeholders during emergency events.

To read more in depth analysis of this event you can download the full report that includes recommended follow up actions.

The AER is required to investigate and report on this event as ancillary payments exceeded  $250 000, reaching approximately $3.1 million. Gas prices reached $33.75/GJ.

The last time Longford experienced a full site electrical shutdown was in April 2004.

Sector: 
Segment: 
Issued date: 
21 December 2016
AER reference: 
AC 134/16