The Australian Energy Market Operator (AEMO) has asked suppliers to provide financial statements for the past four quarters, as part of its new financial transparency policy.
AEMA’s policy is meant to provide greater transparency to the energy sector, but there is a significant risk that it will create a new class of companies that could exploit the lack of financial reporting by suppliers.
For some energy companies, financial statements are critical to profitability.
In 2017, a total of 3,826 energy companies provided financial statements to the AEMO.
The disclosure requirements are based on the following five criteria: A financial statement is required by law or regulation, it is accurate and complete, and it is in writing.
Energy providers must disclose: The amount of financial assets, liabilities, profits and net financial losses, and their fair value, to AEMA.
If there are no identifiable sources of income or expenses, the financial statements should include a statement that the financial statement contains information that may be disclosed in a separate statement.
It should also include a description of the nature of the financial relationships and financial relationships between the parties.
An independent auditor must verify that the statements accurately reflect the information contained in the financial information.
And if the information is inaccurate, it must be corrected or replaced.
When does the policy take effect?
AEP will be releasing the full list of financial statements, which are due to be published on Tuesday, June 20.
But the transparency policy applies to all energy companies who are not part of the big three – AEML, Ausgrid and ANP.
As a result, there will be a significant delay in the transparency of the industry, as there are a number of other energy providers that will need to submit their financial statements.
These include: New South Wales Energy and Infrastructure Union (NSWEU) member utilities: Ausgrid, AusPower, AusInd, AusWest, AusGas, AusEnergy and AusWest Energy.
Brisbane Power and Water: AusPower and AusInd.
Western Australian Power: AusInd and AusGas.
Victoria Energy: AusWest and AusEnergy.
NSW Energy: AEMI and AusPower.
Queensland Energy: Energy East, AusEast and AusWind.
South Australia Energy: Power and Environment Queensland.
WA Energy: SA Power and AusEast.
Northern Territory Energy: NT Energy and AusExchange.