The Victorian government is demanding the operator of Australia's main electricity grid explain how the state came close to losing electricity during the recent extreme heatwave to ensure NSW avoided power outages, adding to calls for a wider inquiry.
As reported by Fairfax Media, Victoria was told to prepare for outages in western Victoria including large regional centres on February 10 even as the state was busy exporting surplus power to NSW and enduring heatwave conditions north of the Great Divide.
Lily D'Ambrosio, Victoria's Energy Minister, said the Australian Energy Market Operator (AEMO) told her that afternoon "they were going to risk interrupting electricity supply in western Victoria (Bendigo and Ballarat) to make sure NSW could keep the lights on".
"I made it very clear that our government would not tolerate AEMO prioritising NSW over Victorian customers," Ms D'Ambrosio said in a statement on Thursday.
Victoria is also asking for the Turnbull government to address ongoing issues of the electricity grid,
"How does AEMO operate when there is a crisis? How are these decisions made?" Ms D'Ambrosio said. "Clearly there are significant issues within Australia's energy network."
Fairfax Media understands AEMO's chairman, Tony Marxsen, made the call to the Victorian government, explaining the main transmission line needed to remain at maximum rating, and that to do so might require parts of Victoria to be sacrificed to ensure supply.
In the end, such blackouts turned out to be unnecessary but the threat remained live until hours after it was made.
Despite the potential for a rare cross-border "pain sharing" episode - including the activation of an automated overload system on the main transmission line to NSW - AEMO failed to include the incident in its special market event report released on Wednesday.
"Why wasn't this event included in their report?" Ms D'Ambrosio said.
AEMO even told a News Corporation publication Victoria's supply was not at risk during the event, comments that surprised Ms D'Ambrosio: "Why did two different AEMO spokespeople say two different things in the media?"
'Under strain'
AEMO on Thursday said in a statement that "at no point" did it ask for direct load shedding in Victoria, but conceded the state's power system "was under strain due to increased demand as a result of the hot temperatures".
"Load shedding in North West Victoria would only have occurred to protect the power system from overloading," it said. "AEMO reiterates, the Victorian power system remained secure throughout the heatwave without the need to shed load."
It declined to elaborate on what its chairman Mr Marxsen told the Victorian government.
A spokesman for federal environment and energy minister Josh Frydenberg confirmed the NSW and South Australian events - which included power outages of 90,000 households on February 8 for less than an hour - were discussed in a COAG Energy Council teleconference on February 17.
Fairfax Media understands Bendigo and Ballarat risks were specifically raised during the call.
Minister Frydenberg declined to comment specifically on the potential for Victoria cuts, noting only that AEMO is a company that was set up by the Rudd government in 2009.
"The Commonwealth's share of AEMO is only equal to any one of its seven state and territory partners," Mr Frydenberg said. "AEMO continues to do an important job in a rapidly changing market."
'Fair bit of explaining'
Bill Shorten, federal Opposition Leader, said the government had to drop its unwarranted attacks on renewable energy during the recent energy crises, and examine how AEMO performed.
"AEMO's got a fair bit of explaining to do all around the country," Mr Shorten said. "These latest revelations show that the challenge in our national energy market is not renewable energy, it's the way the whole system is fitting together."
Amid a summer of hundreds of heat records falling around the country, said it was time the Turnbull government stopped "ignoring the emergency in front of us".
"Ignoring climate change is a premeditated act of intergenerational theft, and it is a major economic and financial risk," Mr Shorten said in a speech at Bloomberg New Energy Finance in Sydney.
"If you don't have a plan for climate change, you don't have a plan for energy security."
AEMO accountability
Demands for greater accountability of AEMO are likely to grow, with Jeremy Buckingham, NSW Greens energy spokesman saying the fact power utilities have a large share of the control of AEMO is one point needing closer scrutiny.
"The lack of transparency from AEMO is unacceptable, especially when this private company is not subject to Freedom of Information requests and the power companies have 40 per cent ownership," Mr Buckingham said.
"The government should move to increase the transparency requirements of AEMO by making it subject to Freedom of Information laws," he said. "For example, the government-owned NBN Co is subject to FOI laws."
Adam Searle, NSW Labor's energy spokesman, said the state government "has been asleep at the wheel on energy policy in NSW for six years," noting how more than 1100 megawatts of gas-fired power failed to start during the peak demand day.
"Its inaction left NSW exposed to extreme risks of the kind we faced on February 10," he said.
Don Harwin, NSW energy minister, though, said his role in seeking for public moderation of power use on that day had been vindicated.
"My top priority as Energy Minister is to ensure that we maintain a secure energy supply for the people of NSW, in their homes and workplaces," he said. "That's why I have established an Energy Security Taskforce, and they will consider all relevant matters related to [the AEMO NSW] report."
