Power profit case thrown out
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The Federal Court has dismissed Australia's largest energy-related class action.
Justice Sarah Derrington has ruled against claims of market manipulation by two Queensland government-owned electricity generators, Stanwell Corporation and CS Energy, dismissing
The case, brought by energy users, alleged the companies had artificially driven up prices through strategies aimed at exploiting their dominance in the National Energy Market (NEM).
Central to the case was the practice of “short-notice rebidding”, where bids to supply electricity are altered just before dispatch.
The claimants argued this caused price spikes during periods of high demand, including heatwaves and outages.
The court, however, found no evidence of unlawful conduct or misuse of market power.
“Stanwell and CS Energy did not take advantage of their market power,” Justice Derrington, said in her judgement.
She explained that while both companies had pursued profit-maximising strategies, their actions were consistent with legitimate competitive behaviour.
The judge noted that their rebidding activities, aimed at optimising revenue, were permissible under the National Electricity Rules.
Documents provided during the trial revealed the companies sought to increase revenue through well-timed bids during peak demand.
However, the court dismissed allegations that these strategies were secretly coordinated or intentionally delayed to stifle competition.
Justice Derrington found that such claims were unsupported by evidence and emphasised the inherent unpredictability of trading conditions in the NEM.
The judgement also pointed to broader industry practices, noting that short-notice rebidding was common among various electricity generators, not just the defendants.
Evidence showed that other operators, including smaller competitors, engaged in similar behaviours, indicating a widespread response to market conditions rather than an abuse of power by Stanwell and CS Energy.
Despite claims that the rebidding strategies created artificial scarcity and inflated prices, the court found no substantial harm to competitors or proof of sustained price increases.
On the contrary, the evidence suggested that market forces often countered these price movements, restoring balance.
Legal costs remain unresolved and will be addressed in a hearing scheduled for March 2025 unless the parties reach an agreement beforehand.
For now, the court's decision provides a clear affirmation of the lawful limits of profit-seeking in the NEM.
