PERTH (miningweekly.com) – The Australian Competition and Consumer Commission (ACCC) has released interim compliance and enforcement guidelines for the gas industry on the new Gas Market Emergency Price order.
Parliament before Christmas passed the federal government’s Energy Relief package, which includes a temporary price cap of A$12/gigajoule of uncontracted gas for a period of 12 months, a 12-month price ceiling on domestic coal of A$125/t in New South Wales and Queensland, and A$1.5-billion in targeted bill relief for businesses and households.
The plan also pledges long-term action to secure Australia’s energy future, including a new Capacity Investment Scheme and the continuing roll-out of projects under the Rewiring the Nation Fund.
“Our guidelines are intended to support the gas industry with their obligations to comply with the new laws, so the country experiences the intended benefits from these emergency measures,” ACCC chairperson Gina Cass-Gottlieb said.
“While our primary objective is to achieve compliance with these laws, we are ready to exercise our enforcement powers in response to any alleged contraventions, particularly if we become aware of conduct that may be intended to circumvent the price cap.”
The maximum penalty for a company that breaches the emergency price order is the greater of A$50-million or three times the value of the benefit obtained, or, if that value cannot be determined, 30% of the company’s turnover during the period it engaged in the conduct.
The price cap generally does not apply to supply contracts entered into before December 23, 2022 but may apply if a price provision in an agreement for supply in 2023 is varied. The price cap does not apply to sales of gas intended for international export.
The Australian Petroleum Production & Exploration Association (Appea) has welcomed the guidelines, with CEO Samantha McCulloch saying the industry had waited nearly a month to get details on the implementation and the practical issues around the implementation of the price cap.
She said during a doorstop interview that the industry body would be working through the guidelines to determine if it provided the clarity needed by the industry to move forward.
“The industry wants to comply, we want to continue to supply gas under the new regime, what we need is the detail of what the new rules of the game are and that’s what we’ve been seeking from the ACCC. We had been raising our concerns and questions with the ACCC and the Treasury last year, and we welcome now getting this guidance and we’ll be working through the detail of that,” she added.
McCulloch reiterated the warning that the implementation of the gas cap could spook foreign investors.
“What the government has done is sent a signal to all industries that it can intervene without consultation, without notice, and regulate prices in what were functioning markets. This should be a concern, and it is a concern, not just for the Australian gas industry, but for all industries, and what we’ve done is sent a signal to international investors that Australia is no longer a safe and stable destination for investment.”