The NSW Energy Minister, Matt Kean, has been granted emergency powers under the Essential Services Act 1988 to direct coal companies to provide coal to generators. These powers were granted in response to the current energy market crisis.
We haven’t been publishing much about the current energy market crisis as we, like many in the industry, have been in the thick of it. However, from today, we will publish analysis of the regulatory responses of AEMO and state Governments. So, what do the powers allow the Minister to do and do they have any teeth?
The power granted to the Minister is to direct a person to do any act or thing to increase, or facilitate the increase of, the supply or distribution of coal to a power station. The power comes from clause 4 of the Essential Services Regulation (No 2) 2022 which received sign off and came into effect yesterday.
While the power is somewhat extraordinary as it would enable the Minister to direct coal companies to do things in breach of their existing contractual obligations, a failure to follow a direction under the regulation does not come with any significant consequence. The penalty for non-compliance is a paltry 10 penalty units which equates to $1,100. That being so, an adverse finding would be deterrent in itself for any company that failed to follow the Minister’s direction.