Regulator seeks penalties over Broken Hill blackouts, alleges Transgrid breached market rules

The Australian Energy Regulator has launched Federal Court proceedings against New South Wales network operator Transgrid, following an investigation into a major blackout event that left thousands of customers in Broken Hill and surrounding regions without power for two weeks.

As Renew Economy has reported, the power went out in the Broken Hill region late on the evening on Wednesday, October 16 last year when seven towers along the only transmission line linking it to the main grid were blown down, and the link failed.

One of the ageing diesel back-up generators was also offline, unbeknownst to authorities, and the other struggled to cope and kept on tripping or being forced offline at regular intervals, resulting in 12,700 properties being left without power intermittently until 31 October 2024.

Compounding the problem, the mining city‘s own big battery – a 50 MW, 50 MWh facility built by AGL Energy and commissioned earlier last year with the specific purpose of being able to provide back up power in such occasions – was unable to do its thing, due to restrictions of its connection agreement.

See: “We were told to stand down:” Why it took nine days to connect Broken Hill’s back up battery in blackout

Broken Hill also has a large wind farm, the 200 MW Silverton facility, and a 50 MW solar farm, which were also forced off line at the time because of the transmission failure, the restrictions on the battery and the nature of their Generation Performance Standard requirements.

The Australian Energy Regulator (AER), which launched an investigation in the weeks after the event in October 2024, said on Wednesday that it has instituted civil proceedings against Transgrid as a result of its findings, and is seeking “pecuniary penalties, declarations and costs.”

The AER alleges Transgrid breached the National Electricity Rules by failing to arrange for management, maintenance and operation of its network to minimise the number of outages between June 2022 and October 2024.

• The regulator also alleges that Transgrid failed to arrange for power to be restored as soon as possible between in the wake of the blackout event, and failed to ensure its system complied with its NSW transmission operator’s licence over the 2024-25 financial year.

Further, the AER alleges that Transgrid failed to institute and maintain a compliance program for the generators in the period between mid November 2022 and 27 October 2025.

The notice does not refer specifically to the failure to have the AGL battery connected and ready to support the grid – and, as the matter is now before the Court, the regulator has stressed it will not be making any further comment on the case.

But a NSW parliamentary committee looking into the blackouts has since recommended that grid connection rules be reviewed. The hearing heard from AGL that the battery – had it been properly permitted and authorised – could have swung into operation in an instant.

In the event, it took AGL just over a day to check off on the technical details, but it wasn’t until October 26 that it was finally given permission by the Australian Energy Market Operator and network company Transgrid to switch on its back-up capabilities.

AGL’s head of battery operations David Bowly said that when the battery was connected, it clearly made a difference as it was able to respond quickly to sudden changes of demand, and helped to stop further trips of the diesel generator and yet more outages. But he says it was only allowed to operate at one tenth of its capacity.

AER chair, Clare Savage, said on Wednesday that it was “absolutely critical” that network service providers were prepared to adequately manage and maintain electricity supply to their customers.

“The power disruptions in October 2024 had far-reaching and serious impacts across the Broken Hill region, especially given its geographical isolation,” savage said.

“Today’s filing of court proceedings follows a thorough and complex investigation requiring significant legal and technical expertise, and close collaboration with the NSW Independent Pricing and Regulatory Tribunal.

In a statement, a Transgrid spokesperson said on Wednesday that the network company – which oversees one of the biggest transmission networks in Australia – takes its obligations to provide a safe, secure and reliable electricity supply “very seriously.” 

“Since the extreme weather event last year, we have worked closely with local and state government stakeholders on securing a sustainable, long-term solution for energy security and reliability for communities in Far West NSW,” the statement says. 

“We have worked collaboratively and transparently with the AER and IPART over the past year and will continue to facilitate the best possible outcomes for consumers as we work to provide long-term, sustainable energy solutions for the people of NSW.  

“As the matter is before the Court, it would not be appropriate for Transgrid to comment further,” the spokesperson says. 

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