The AER issued four notices because it had reason to believe that CS Energy failed to follow dispatch instructions issued by the Australian Energy Market Operator (AEMO) in February and April 2014 to the generating units at the Wivenhoe Power Station and also failed to ensure that the offers submitted to AEMO for generating units at the Gladstone Power Station reflected actual capabilities to generate power at all times.

“The AER considers that the efficiency of the national Electricity Market and system security may be compromised when dispatch offers made by generators do not reflect their actual capabilities, and where generators fail to comply with the dispatch instructions given by AEMO,” AER board member Jim Cox said.

“Compliance with obligations relating to dispatch offers and instructions is an enforcement focus for the AER and we will not hesitate to take appropriate enforcement action to deal with non-compliance. In determining our response in this case, we took into account CS Energy’s cooperation, including the provision of court-enforceable undertakings. These undertakings involve CS Energy committing to various corrective actions, including reviewing operating systems and procedures and improving compliance training in this area.”

Two infringement notices related to CS Energy’s alleged failure to cease generating at Wivenhoe on two instances on 13 and 20 February 2014, resulting in over-generation by 256 megawatts (MW) and 208 MW respectively.

The other two infringement notices relate to CS Energy’s alleged failure to ensure that its generating units were capable of complying with the offers submitted to AEMO by CS Energy.

The AER was concerned that CS Energy advised AEMO in its dispatch offer that Gladstone generating units were capable of increasing or decreasing output at a particular rate when they were not.

This contributed to those units generating above the dispatch instructions issued by AEMO following receipt of the offer.