The Australian Energy Market Commission has initiated four rule change requests related to intervention mechanisms within the national electricity rules (NER) through the fast-track process, with three of the requests consolidated. Draft determinations on the AEMO-requested changes will be published on 18 June 2020.The rule change requests action recommendations from the AEMC’s final report of its Investigation into intervention mechanisms in the NEM. The review recommended a number of changes to the intervention framework that aim to reduce market distortion and costs to consumers while maintaining efficient price signals and incentives for investors when AEMO intervenes in the market.

The rule change requests propose changes to: 

  • remove the requirement for AEMO to exercise the Reliability and Emergency Reserve Trader (RERT) before issuing directions or instructions and replace it with a principle requiring AEMO to endeavour to minimise the costs and maximise the effectiveness of an intervention in the NEM
  • formalise the basis for recovering the cost of affected participant compensation as a result of RERT activation
  • remove the mandatory restrictions framework
  • remove the obligation on AEMO to counteract when it intervenes in the electricity market.

The AEMC decided to consolidate the later three rule change requests as they seek to address related issues. Consolidation will allow these issues to be considered through a single rule change process. 

The rule change requests are being fast-tracked as stakeholder feedback on the issues was initially sought and received in 2019 as part of the AEMC’s Investigation into intervention mechanisms in the NEM. As such, the next step in the rule change processes are draft determinations, which will be open to further stakeholder feedback. 

Media: Kellie Bisset, Media and Content Manager 0438 490 041