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Class action launched on Qld energy duopoly
Stanwell Corporation and CS Energy have been hit with a class action alleging the companies ripped off businesses and households over the past five years through “bidding games”.
Tony Zhang
The class action launched by law firm Piper Alderman will allege Stanwell and CS Energy – two coal-fired power generators – engaged in “bidding games” or trading strategies to push up power prices for their own profit.
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The action will seek to recover compensation for all electricity customers in Queensland during August 2014 to December 2019 period.
“This case is about abuse of market power. Stanwell and CS Energy have used their position to unlawfully manipulate the wholesale cost of electricity and that has driven up the prices paid by all Queensland businesses and consumers,” Greg Whyte, head of Piper Alderman’s dispute resolution and litigation team in Brisbane said.
“It’s had a devastating effect on the Queensland economy. We are trying to stop that behaviour and recoup the losses that illegal conduct has caused. For businesses. For Queenslanders.”
The claim alleges that Stanwell and CS Energy engaged in anti-competitive bidding practices or trading strategies designed to artificially create a scarcity of supply of electricity and to spike energy prices for their own profit, in contravention of section 46 of the Competition and Consumer Act 2010.
This has expended the 2.1 million electricity consumers in Queensland – thousands of dollars for households and hundreds of thousands of dollars for businesses – over the years, according to Mr Whyte.
Stanwell and CS Energy control around 70 per cent of the electricity dispatched in Queensland. The claim is expected to top $1 billion over the five-year period after the Grattan Institute had reported that energy companies cost Queenslanders about $2.3 billion from 2013 to 2017.
Allegations of market power abuse by Stanwell Corporation and CS Energy to manipulate the price of electricity have been investigated by the Queensland Productivity Commission, the Australian Energy Market Commission, the Australian Energy Regulator and the Australian Competition and Consumer Commission (ACCC) in 2017.
The ACCC, the Australian Energy Regulator and the Queensland Productivity Commission have all raised concerns about the bidding practice of Queensland generators.
The competition watchdog had previously expressed concerns about the lack of competition in the energy sector in Queensland, where the two state-owned companies have a 70 per cent market share.
Lawyers Weekly understands ACCC chairman Rod Sims has consistently called for Stanwell and CS Energy to be split into three companies to promote competition.
This was rejected by the Palaszczuk Labor government, which last year launched CleanCo, a new renewable generation company, to bid into the NEM.
The litigation is fully funded with all costs underwritten by LCM (a subsidiary of Litigation Capital Management [AIM: LIT, an Australian litigation funder).
