Energy company fined $200k, ordered to repay $1.13m
Queensland energy company CS Energy has paid $200,000 in fines and repaid $1.13 million after a number of incidents from two power stations which could have resulted in widespread blackouts.
The Australian Energy Regulator penalised CS Energy for failing to ensure it could provide frequency control ancillary services.
This service helps manage the stability of the power system which therefore prevents disruption of electricity supply to customers.
CS Energy allegedly failed to ensure it was able to comply at all times with its contingency FCAS offers at certain units at Callide B power station on August 25 2018 and Gladstone power station in November 2019 and January 2020.
CS Energy was not capable of complying with its offers due to settings at certain units at the power stations.
CS Energy has also repaid $1.13 million in payment for these services it received to the Australian Energy Market Operator.
An AER spokeswoman said the payment of the fine did not constitute an admission of liability as only a court could determine if there was a breach.
AER chairwoman Clare Savage said it was a basic principle businesses should not keep payment for services they were unable to deliver in line with their offers.
“Inaccurate information about FCAS offers undermines AEMO’s ability to manage frequency deviations that is critical to supporting the integrity of the power grid,” Ms Savage said.
“CS Energy and other FCAS providers must have robust systems and processes in place to ensure it is at all times able to comply with its FCAS offers and that customers pay only for services that are provided.
“The AER will continue to monitor FCAS providers and take action against businesses who do not comply with these crucial obligations.”
CS Energy has made changes to its processes and systems so that it does not make offers for contingency FCAS at Callide B and Gladstone power stations when these settings are in place.
CS Energy self-reported the instances where it had offered contingency FCAS to the market that were not fully delivered.
CS Energy CEO Andrew Bills said CS Energy worked hard to be a responsible and compliant market participant, and was extremely disappointed that the incidents relating to the Callide and Gladstone power stations had occurred.
“We believe that market regulation is working as it is designed and that CS Energy has acted safely and with integrity for the benefit of the power system as a whole,” Mr Bills said.
He said the non-compliance occurred due to a combination of systems and human error and did not impact system stability.
“CS Energy has since improved its systems, processes and training in response to these events and has implemented remedial actions to minimise the risk of these or other issues arising again.”