The business responsible for the Callide C power station near Biloela has been hit with a $9 million penalty for breaches of the National Electricity Rules (NER). 

The Australian Energy Regulator (AER) brought civil proceedings against Callide Power Trading in the Federal Court after an explosion in a generating unit in 2021 resulting in widespread blackouts across Queensland. 

Callide Power Trading admitted that on May 25, 2021 it failed to ensure the Callide C4 generating unit met or exceeded its performance standards.

It also admitted that it failed to plan and design its facilities and ensure they were operated to comply with its performance standards.

With a maximum penalty of $10 million, today’s $9 million penalty is the highest ever imposed for a failure to comply with performance standards under the NER.

Callide Power Trading is owned 50 per cent by IG Power and 50 per cent by CS Energy subsidiary Callide Energy.

In addition to imposing the $9 million penalty, the court orderedCallide Power Trading to pay $150,000 towards the AER’s legal costs.

AER chair Clare Savage said the court’s decision reflected the seriousness of the breach by Callide Power Trading.

“In the immediate aftermath of the event, the energy supply for almost half a million customers was disrupted and the spot price for electricity in Queensland and New South Wales significantly increased. The generator itself was offline for nearly two years,” she said.

“This significant penalty reinforces the importance of generators and registered participants, who are responsible for generators, complying with performance standards to ensure the security and safety of the power system.

“Those responsible for generators must have appropriate systems, processes and protocols in place to ensure they and their operators can comply with their regulatory obligations,”

In his judgment, Justice Roger Derrington said: “Though the contraventions appear, at first blush, to be minor technical breaches, they were, in fact, serious. In broad terms, they arose as a result of a substantive failure of major infrastructure to operate with the Callide C4 unit. The consequences included the destruction of valuable equipment, the potential loss of life, loss of power to the grid, and significant, long-term and wide-ranging impacts on the National Electricity Market (NEM).”  

Mining and Energy Union Queensland District president Mitch Hughes said the union welcomed the fact that action had been taken over the incident.

“It is deeply disappointing that a lack of maintenance and oversight led to this preventable disaster, risking the lives of workers and we hope that today’s judgement sends a strong message to all companies in the industry,” he said.

A Callide Power Trading spokeswoman said the court’s judgement was consistent with the joint position agreed between the AER and CPT last year.

“CPT has worked cooperatively with the AER to resolve this matter and has agreed to pay the penalty and contribute to the AER’s legal costs,” she said.