AER takes action against EnergyAustralia to protect competitive markets

EnergyAustralia has paid penalties of $160,000 following the issue by the Australian Energy Regulator (AER) of eight infringement notices for alleged breaches of the record keeping requirements of the National Gas Rules.

The penalties relate to EnergyAustralia’s alleged failure to comply with the record keeping requirements for day-ahead auction participants in the gas market.

The day ahead auctions scheme commenced in March 2019. The scheme provides access to contracted but unused capacity on gas pipelines by way of mandatory auctions and was designed to improve competition in the gas market.

The AER alleges that EnergyAustralia failed to make contemporaneous records for material renominations relating to the use of gas pipeline transportation services.

AER Chair Clare Savage said that energy companies that do not follow the rules can expect enforcement action from the regulator to protect market integrity.

“Record keeping requirements inform AER monitoring of gas markets, protect against market misconduct and ensure that gas markets are functioning competitively for the long term benefit of consumers.

“We will continue to monitor compliance with these requirements, and take enforcement action against businesses which do not comply with these crucial rules," Ms Savage said.

Under the day ahead auctions scheme, gas shippers must keep records of material renominations that they submit to pipeline operators, and must make these records contemporaneously.  The records must be provided to the AER upon request.

“It’s really important that energy companies keep up to date records of why they need to materially change the amount of gas they had nominated as needing on a given day,” Ms Savage said.

“In the absence of these records, renominations could be misused by market participants to manipulate auction outcomes,” Ms Savage said.

Notes to editors

The payment of these infringement notices does not constitute an admission of liability by EnergyAustralia.

The AER can issue an infringement notice where it has reasonable grounds to believe a business has contravened a civil penalty provision of the National Gas Rules.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future.

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland.
  • We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.
Issued date: 
8 October 2020
AER reference: 
NR 36/20
AER Media 0466 409 921