ACCC agrees to limited energy market cooperation, but warns against price collusion
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Following on from the Australian government offering offshore oil and gas explorers a simplified application process to suspend and extend existing work programs, the Australian Competition and Consumer Commission (ACCC) is taking steps to safeguard the country’s energy supply.
The ACCC has granted the Australian Energy Market Operator (AEMO) an interim authorisation that allows energy market participants to co-operate on certain measures.
These include allowing market participants to share information about the operation of critical facilities and any risks to their continued operation.
The AEMO, which manages electricity and gas markets and systems across Australia, will also be able to notify the ACCC of further measures it needs to undertake in order to respond to the COVID-19 pandemic.
However, the ACCC has specifically excluded any conduct relating to gas availability from this new interim authorisation as it does not think there is a need for coordinated conduct from energy companies regarding gas.
Its new interim authorisation also requires the AEMO to report regularly on any measures taken and bans any contracts that would outlast the ACCC’s authorisation period.
“It is essential that Australian businesses and households have access to reliable and efficient energy supplies during this difficult time,” ACCC chair Rod Sims said.
“There is a clear need for co-operation between industry participants to prevent any disruption to these supplies.
“However, it is important to note that this co-operation cannot extend to making agreements about energy prices or to sharing confidential information about pricing or profits. It will also only take place during the COVID-19 pandemic.”
The ACCC’s move to allow co-operation is not limited to the energy sector.
Over the last month, the competition regulator has allowed private and public hospitals, private health insurers, smaller lenders and oil companies to co-operate during the COVID-19 pandemic.
It also gave 11 major banks the green light in March to coordinate their efforts to assist small businesses.