Synergy price fiddle probe
Synergy 'price fiddle' probe

State-owned energy provider Synergy is under investigation by WA's economic watchdog over alleged market manipulation.

The Economic Regulation Authority probe comes after claims the utility tried to exploit supply constraints to sell into the Albany market at inflated prices.

The claims were initially investigated by the Independent Market Operator before being referred to the ERA.

Electricity supplies to Albany and parts of the Great Southern have been hanging by a thread for almost six months because of bungling by Western Power.

A transformer owned by Western Power that connected Albany to generators in Collie broke down in September 2012 but the network operator has failed to replace it.

In the meantime, another transformer failed in February, meaning only one base-load power station was still able to supply the town. That power station is Muja AB, the much- maligned coal plant that was controversially refurbished by the Barnett Government.

In a sign of Albany's fragile energy supplies, it is understood an unplanned outage at Muja AB last month caused brownouts in the Great Southern.

Muja AB is run by Vinalco, a wholly owned subsidiary of Synergy.

While details of the investigation are unclear, it is understood the ERA is looking into whether Synergy sold power to Albany at a price five to six times the prevailing market rate.

If proved, the actions could contravene WA's electricity market rules, which place a strict cap on the prices generators can sell their energy into the market.

A Synergy spokesman would not be drawn on whether it was being investigated by authorities but said the utility had raised some "pricing" concerns of its own.

Those concerns are believed to relate to the fact Muja AB is forced to sell its power below the cost of production.

"Vinalco has raised concerns with the market operator in relation to unintended pricing matters that have resulted during a portion of the period it has been obligated to dispatch to ensure security of supply," he said.

"The Muja AB machines are being run within their technical parameters and no long-term issues are envisaged."

The West Australian

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