Synergy sues NewGen over $16.9m 'mistake'

State-owned electricity provider Synergy is taking the owners of NewGen Kwinana power station to court in a bid to claw back $16.9 million it claims it paid them “by mistake”.

According to a writ lodged in the Supreme Court of Western Australia, the Electricity Generation and Retail Corporation has named the plant’s owners EIT Kwinana Partner, Summit Kwinana Power and NewGen Power Kwinana as parties to the action.

In the writ, Synergy claims the three companies owe amounts totalling $16.944 million under a tradable purchase agreement it signed with Western Power in 2005.

Synergy alleged the amounts, allegedly exchanged between December 2012 and 2018, were paid by mistake and the trio was “unfairly enriched” as a result.

Now, Synergy wants the funds returned, as well as interest and the coverage of any legal costs associated with the action.

The court action comes just months after the court of appeal overturned an 18-month old ruling which required Synergy to pay the companies a fee for the period in which the 320-megawatt gas-fired generator was in reserve.

It is understood the owners were to be paid to provide additional generation capacity to keep the grid stable.

The two parties disagreed over when the payments should be made, with NewGen believing it was entitled to funds for the entire period capacity was made available and Synergy insisting the payments should be made only when capacity was requested.

The dispute hinges on the reading of WA’s electricity market rules.