Electricity generators have been labelled "greedy" and "opportunistic" by a small power company, in a blistering attack on the industry.
Queensland-based energy retailer LPE is begging its current customers to leave — and stopped accepting new customers — amid enormous wholesale electricity prices.
"There's no justification for the way that the markets are behaving at the moment," LPE boss Damien Glanville said.
Power plants — such as coal-fired and gas-fired generators — sell electricity into the wholesale market.
Retailers purchase the energy before reselling it to homes and businesses.
The Australian Energy Market Operator (AEMO) on Wednesday afternoon suspended the normal operations of the wholesale market.
Instead, generators will be paid a pre-determined price and can be compensated if that price does not cover their costs.
Smaller retailers were largely at the mercy of soaring markets over recent weeks, and have been acutely impacted.
"The generators are the ones that are making all the money and the consumers are the ones that suffer," Mr Glanville told 7.30.
"What we're seeing is opportunistic, money-making schemes from generators.
"And the generator sits back and laughs because he gets paid no matter how bad he behaves.
Industry body the Australian Energy Council sought to downplay concerns about the behaviour of generators.
"Retail and wholesale energy prices are closely monitored and reviewed by regulators," a spokesman said.
'Sustained increase' in wholesale prices
Wholesale electricity prices along the east coast have soared this year, from a daily average of less than $100 per megawatt-hour to more than $700.
"We have had significant peaks in electricity wholesale prices before," Victoria University researcher Kelly Burns said.
"But we've never seen this sort of sustained increase, and also the drivers coming from so many different angles."
Coal-fired power stations still produce most of Australia's electricity, but many of these have been offline recently for repairs and maintenance.
More expensive gas-fired power plants have filled the gap.
"The reliance on the gas-fired generators … combined with the high international gas price is really the predominant driver of the spikes [in prices] … that we're seeing at the moment," Dr Burns said.
Small retailers struggling to compete
Several small retailers have been telling their customers to leave or declining to accept new clients.
ReAmped teamed up with a comparison site to offer $100 gift cards to customers who depart, while other retailers, such as Nectr, paused signing up customers.
Retailers pay for wholesale electricity daily, which at recent high prices is significantly denting their cash reserves.
"I wake up this morning, and the average cost for my customers' energy yesterday was 80 cents a kilowatt-hour," Mr Glanville told 7.30 last week.
"You have financial mechanisms [to insure against high wholesale prices] but there's still a cashflow mismatch that small retailers can't support.
"You could arguably say competition in the energy market is now officially dead."
LPE is winding back its retail arm to focus on other parts of its energy business, such as providing solar energy to apartment and townhouse complexes.
Chief executive Damien Glanville said about two-thirds of his customers had heeded calls to leave, and pleaded with remaining customers to depart.
"I don't want to charge you what I need to charge you for me to be successful," he said.
Concerns over blackouts
Over the weekend, weeks of sustained high wholesale prices triggered a government-imposed price cap of $300 per megawatt-hour.
At that lower price, some generators pulled their supply, which threatened to cause blackouts in Queensland and New South Wales this week.
The electricity market operator has used its powers to force those electricity plants to keep running.
EnergyAustralia, which owns coal and gas-fired generators, on Tuesday said it was "with the regulators to ensure our plants are operating when required".
"Overall costs for supplying power have increased for many reasons," a spokesperson said.
"Despite this, EnergyAustralia is working with [the electricity market operator], and we are doing all we can to supply our customers with reliable power and help to keep the lights on."
