The AEMC has released a consultation paper on an urgent rule change request from the Australian Energy Market Operator to simplify the process for setting prices if the spot market is suspended. This rule change will proceed under the expedited rule making process so it can be in place in time for next summer. 

AEMO suspends the spot market when the market cannot operate as normal, for example, if there is no electricity supply due to a black system event. In these situations, AEMO must determine the prices which generators are paid, and customers receive, while the issues which led to the suspension are being resolved.

Currently, AEMO must move sequentially through four pricing regimes to set the prices that apply during periods of market suspension. To simplify this process, the rule change request seeks to:

  • reduce the number of suspension pricing regimes available and simplify the decision-making process for applying them
  • harmonise the price-scaling provisions applicable during periods of market suspension with other price scaling provisions in the National Electricity Rules, and
  • allow AEMO to revert to dispatch pricing while the market is suspended, if conditions allow.

A market suspension is extremely rare, and has only happened twice in the history of the national electricity market. This rule change request relates to a number of recommendations made by AEMO in its final incident report for the Black System event which occurred in South Australia on 28 September 2016.

Subject to any objections to the expedited process, there will be only one round of consultation. Stakeholder submissions on the consultation paper are due by 12 September 2017.

Publication of the final rule determination is due by 10 October 2017