S&P/ASX 200 Index (ASX: XJO) energy retailers were centre stage last month when the Australian Energy Market Operator (AEMO) capped energy prices across much of Australia.
And now some of their peers could be pushing back against fees expected to be charged by the market operator.
Let's take a closer look at the battle that might be about to heat up between energy retailers and the AEMO.
ASX 200 energy retailers suffered in June
Here's how ASX 200 energy retailers performed amid the chaos last month:
- The AGL Energy Limited (ASX: AGL) share price slumped nearly 6% in June
- The Origin Energy Ltd (ASX: ORG) share price plunged 16% last month
Much of the latter's tumble was due to the withdrawal of the company's financial year 2023 guidance amid volatility in energy markets.
Meanwhile, AGL pushed back the expected restart of its Loy Yang A Unit 2 and announced its former suitor Brookfield Asset Management had sneakily snapped up 2.5% of its shares.
Energy retailers could fight against AEMO fees
Six energy retailers have considered waging a legal battle against AEMO fees following last month's cap on wholesale power prices, the Australian Financial Review (AFR) recently reported.
The unnamed companies have reportedly looked to dispute a bill that will see them indirectly compensating electricity generators. According to the publication, they would likely claim generators are being offered too much compensation.
AEMO ordered generators to produce electricity last month. It did so in a bid to keep lights on amid the cap on energy prices. The operator now plans to pay generators for energy produced and compensation for additional losses.
Most of that compensation – reported to be worth millions – will be recovered from energy retailers.
But already struggling retailers – which are generally hedged against power prices – are exposed to such compensation costs, the AFR reported. The publication says the bills will likely land on energy retailers' desks from November.
