Market Review: Completed
In August 2021, Energy Ministers tasked the AEMC with a review of the National Gas Rules (NGR) and the National Energy Retail Rules in order to develop initial rules that will extend the regulatory frameworks to include hydrogen blends and renewable gases.
Purpose and approach
The purpose of the AEMC review was to:
- Identify potential issues in the NGR and NERR that could emerge if the scope of the national gas regulatory frameworks is extended to hydrogen and other renewable gases
- Develop initial rules to address these issues through a consultative process
- Inform jurisdictional officials of any National Gas Law changes or National Energy Retail Law changes that the AEMC considers should be made to achieve the objective of Energy Ministers
The AEMC was also asked to prioritise the changes that need to be made and whether any amendments could be deferred. The purpose of this prioritisation advice was to assist in meeting the expedited time frame that has been set for these reforms.
The AEMC has also concurrently undertaken a rule change process focussed on including distribution connected facilities in the Victorian declared wholesale gas market (DWGM). The final determination responding to this rule change request was published on 8 September 2022. More information on the rule change can be found on the project page.
The final rules report
Under the Review’s terms of reference, the AEMC conducted consultation on the recommended draft rule changes that were published in the September 2022 final report.
This final rules report for Energy Ministers’ consideration outlines the recommended final rules to the NGR and NERR that are required to extend the regulatory frameworks to include hydrogen blends and renewable gases. It also outlines stakeholder feedback to the recommended draft rules and the Commission’s analysis on that feedback.
The Commission’s key final recommendations (as outlined in the final rules report) and recommended final rules:
- Enable access to pipelines and support investment by extending the economic regulatory framework.
- Support competition through improvements to the ring fencing framework.
- Extend the market transparency mechanisms to enable informed and efficient decision making.
- Streamline operational arrangements for the STTM.
- Adapt the Victorian DWGM (to work in conjunction with the DWGM distribution connected facilities rule change).
- Allow new services and commodities in the retail gas markets.
- Enable consumers to be informed about a change in the type of gas supplied.
- Retain the draft regulatory sandbox rules in their current form as these draft rules, once extended to covered gases, will be fit for purpose for enabling trial projects involving those gases.
In line with the terms of reference, the Commission has provided Energy Ministers with the final set of recommended rules for their approval. These rules will then be made by the South Australian Minister once the required changes to the legislation are made.
Background to the review process
This review commenced on 21 October 2021 with the publication of a consultation paper.
On 31 March 2022 the Commission published a draft report for consultation. This report set out the Commission’s draft recommendations for changes to the NGR and NERR.
A final report and recommended draft rules were published for consultation on 8 September 2022. This report provided the AEMC’s final recommendations on the policy approach to changing the NGR and NERR. It was accompanied by a set of recommended draft rules that stakeholders were invited to comment on.