The ACCC has granted new interim authorisation for an expanded range of measures allowing participants in the gas and electricity markets to work together to help safeguard Australia’s energy supply during the COVID-19 pandemic.

On April 3, the ACCC granted interim authorisation to the Australian Energy Market Operator (AEMO), allowing energy market participants to co-operate on certain measures intended to maintain secure and reliable energy supplies while the pandemic continues.

AEMO had applied for approval for a broader range of conduct, which the ACCC required more time to consider.

The ACCC has now granted interim authorisation for an expanded set of measures, including allowing market participants to share information about the operation of critical facilities and any risks to their continued operation. AEMO is also able to notify the ACCC of further types of conduct it needs to undertake in order to respond to the COVID-19 pandemic.

The ACCC has expressly excluded any conduct relating to gas availability from this new interim authorisation because at this stage it is not persuaded about the need for coordinated conduct regarding gas.

Importantly, the new interim authorisation imposes the same strict conditions as the original interim authorisation, including that AEMO report regularly on any measures taken, a ban on any contracts that would outlast the ACCC’s authorisation period, and a requirement that parties to the authorisation continue to comply with other conditions of authorisation that apply to conduct occurring under this authorisation.

“It is essential that Australian businesses and households have access to reliable and efficient energy supplies during this difficult time. There is a clear need for co-operation between industry participants to prevent any disruption to these supplies,” ACCC Chair Rod Sims said.

“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.”

“We are going to closely monitor the effect of these arrangements and assess when it is appropriate for this authorisation to be revoked,” Mr Sims said.

The need for co-operation in the energy sector during the pandemic was raised at last month’s COAG Energy Council. COAG’s newly formed Energy Coordination Mechanism, made up of government and industry leaders, will be kept informed about measures taken to secure energy supplies. The ACCC will also be informed of such measures through this authorisation.

More information is available on the ACCC public register at Australian Energy Market Operator.

Background

AEMO manages electricity and gas markets and systems across Australia to ensure a reliable, secure, affordable and sustainable energy system. Its members include government and industry participants.

Electricity industry participants that might qualify for the interim authorisation include electricity generators, retailers, network service providers, metering service providers, and many other industry specific service providers. Gas industry participants that might qualify include producers, traders, retailers, storage providers and many other industry specific service providers.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant an authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

Members of the Minerals Council of Australia (MCA) and other mining associations will be able to work together to manage critical services and supplies during the COVID 19 pandemic, after the ACCC granted interim authorisation for the arrangements today.

The COVID-19 pandemic has led to shortages and supply chain disruptions for some critical services and supplies used by the mining sector.

The interim authorisation will help ensure Australia’s mining industry continues to operate safely and efficiently, by allowing members that have been notified to the ACCC to co-ordinate on the sourcing, purchase and distribution of crucial supplies and services such as health and safety equipment, logistics, equipment maintenance and consumables like fuel and explosives.

“The COVID-19 pandemic has had a dramatic impact on global manufacturing and supply chains, which has created challenges for those sectors, such as mining, that are still operating and still in need of crucial equipment and services,” ACCC Chair Rod Sims said.

“To help address these challenges, we have authorised mining companies to co-ordinate on a limited range of activities to help ensure they can continue to operate safely and efficiently.”

The authorisation only applies to activities relating to these critical services and supplies. It will, for example, allow companies to share inventories and manage demand for these critical services and supplies, coordinate deliveries, and share details of potential suppliers of personal protective equipment (PPE), such as N95 masks needed to work in underground mines.

“Importantly, the approval does not allow mining companies to coordinate on the terms, conditions or prices in supply contracts,” Mr Sims said.

“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked.”

The authorisation applies to members of the MCA and seven other mining associations. The ACCC must be notified in advance of any arrangements made under the authorisation.

The ACCC will now seek feedback on interim authorisation, as well as the application for final authorisation, which is sought for a period of 12 months from the date of authorisation. More information, including the ACCC’s statement of reasons, a list of associations included, and the supplies and services covered by the authorisation, is available at Minerals Council of Australia.

Background

The Minerals Council of Australia’s membership includes many of Australia’s biggest mining companies. It has 51 full member companies and 29 associate member companies including mining service providers, state chambers, energy and transport companies and consultancy firms.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.