AGL Energy Limited has been served with class action proceedings relating to part of its National Energy Market (NEM) operations.

The proceedings allege breaches of the Competition and Consumer Act in relation to bidding in the South Australian region of the NEM.

The NEM covers Australia’s eastern and south-eastern states, with five physically connected regions — Queensland, New South Wales (which includes the ACT), Victoria, Tasmania and South Australia.

In an announcement to the ASX, AGL said it took its “compliance obligations seriously and intends to vigorously defend the proceedings”.

The class action comes in the wake of broader discussion about the energy market, with prices going up significantly, and an unprecedented federal government-backed intervention in the market last year. 

The Australian Energy Regulator (AER) confirmed last month that consumers can expect a significant price rise come July 1.

The AER said prices would increase by between 20 and 25 per cent.

The decision will directly affect about 600,000 customers in South Australia, New South Wales and south-east Queensland, who are on “default offers”.

At the time, AER chair Clare Savage said the price increases were much lower than previously expected.

“But still obviously [a] significant price rise for customers and difficult news at a time of cost-of-living pressure,” she said.