SUN SHINES ON POWER BID­DING Reg­u­la­tor in favour of transparency in mar­ket

Townsville Bulletin - - NEWS - TONY RAGGATT busi­ness editor tony. raggatt@ news. com. au

TOWNSVILLE’S Sun Met­als zinc re­fin­ery is lead­ing fun­da­men­tal re­forms to Aus­tralia’s elec­tric­ity mar­ket aimed at mak­ing whole­sale pric­ing more trans­par­ent and, hope­fully, cut sky- high power bills.

But Queens­land Gov­ern­ment- owned gen­er­a­tors and Townsville- based power re­tailer En­ergy Queens­land, which is “strongly op­posed” to the pro­posal, have warned the costs of im­ple­ment­ing the changes could far out­weigh the ben­e­fits.

Sun Met­als, whose an­nual power bills have soared to more than $ 70 mil­lion, called on reg­u­la­tor the Aus­tralian En­ergy Mar­ket Com­mis­sion in 2015 to change trad­ing pe­ri­ods on the open mar­ket from 30- minute to five- minute set­tle­ments.

Now the com­mis­sion ap­pears to have backed Sun Met­als, stat­ing an “ini­tial po­si­tion” that five- minute set­tle- ments are in the long- term in­ter­ests of con­sumers.

There are claims Queens­land’s gen­er­a­tors have been gam­ing the mar­ket by boost­ing pric­ing at the end of the 30- minute trad­ing pe­ri­ods to more than $ 13,000 per megawatt hour.

Be­cause the 30- minute trad­ing price is av­er­aged over five- minute blocks, it has meant con­sumers such as Sun Met­als have been un­wit­tingly locked into higher prices.

Bur­dekin MP Dale Last and Sun Met­als com­plained about the late bid­ding prac­tices of gen­er­a­tors, with Mr Last say­ing in 2015 that the prac­tice was “noth­ing short of price goug­ing”.

The com­mis­sion sought to com­bat volatile pric­ing by in­tro­duc­ing re­quire­ments last year for gen­er­a­tors to jus­tify late bid­ding but is now look­ing to im­ple­ment Sun Met­als’ sug­ges­tions.

Yes­ter­day, Mr Last said com­pa­nies such as Sun Met­als were be­ing bled for cash.

“By ma­nip­u­lat­ing the whole­sale price and the bid- ding process, were charg­ing amounts up to MWh,” Mr Last said.

“We talk about sup­port­ing in­dus­try and cre­at­ing jobs but all this was do­ing was driv­ing in­dus­try and in­vest­ment out of Queens­land.”

En­ergy Min­is­ter Mark Bai­ley said he sup­ported the de­tailed AEMC con­sul­ta­tion process and would also sup­port a change that en­abled quicker and more ef­fi­cient re­sponses in a mar­ket that had sub­stan­tially changed since its in­cep­tion in 1998.

“Of course, any sub­stan­tial ( gen­er­a­tors) ridicu­lous $ 13,500/ change would need a tran­si­tional process to en­able a smooth changeover,” he said.

In a sub­mis­sion, En­ergy Queens­land says the cost im­post of the changes will be “sig­nif­i­cant and broad”.

“This is due to all par­tic­i­pants hav­ing to in­vest in re­place­ment trad­ing, set­tle­ment and billing sys­tems in or­der to main­tain busi­ness op­er­a­tions in a five- minute mar­ket,” the sub­mis­sion says.

The AEMC has ex­tend­ing the date for pub­lish­ing its draft de­ter­mi­na­tion to Septem­ber 5 to con­sider more than 40 in­dus­try sub­mis­sions.

Pic­ture: EVAN MOR­GAN

FIRED UP: Sun Met­als CEO Yun Birm Choi.

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