Western Australia’s leading electricity producer, Synergy, has allegedly over-charged industrial customers to the tune of AU$190 million according to an investigation by Western Australia’s independent economic regulator.
According to the findings of the investigation, Synergy increased wholesale prices between March 2016 and July 2017, pushing prices up by as much as AU$192 million, and household bills may also have been affected as a result.
The Economic Regulatory Authority has accused Synergy of breaking market rules stipulating that electricity be sold for the same amount it costs to produce.
Proceedings before the Electricity Review Board against the company are set to begin in "the interests of Western Australian consumers.
The ERA scoured 14,812 trading intervals by Synergy during the period and found that the producer increased its revenue by between AU$40 million and AU$102 million over the fifteen month period, which the regulator said was directly related to Synergy’s market power.
Synergy is the largest generator of wholesal energy in the Western Australia region.
The ERA said there was a likely knock-on effect on household prices, which the Australian government would have taken into consideration when determining electricity prices for retail customers.
Synergy has denied this implication.
Penalties of AU$50,000 and AU$100,000 may be issued in the case of a first time offence.
Treasurer Ben Wyatt said the allegations against Synergy were not good. "Ultimately this is what you get when you create a monster like Synergy, which I remind you all was the merger of Synergy and Verve, giving it significant market power," Mr Wyatt said.
Synergy has released a statement saying it will review ERA's findings before taking further steps.
"The investigation relates to wholesale electricity and is not related to retail tariffs which are set annually by the State Government," it said.
"There is no impact on residential consumers."
"Synergy provided significant detail and worked with the ERA throughout the process."
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