The AEMC today published a draft report for the review of compensation arrangements following an administered price, market price cap or market floor price.

The frameworks which set out these compensation provisions are included in the national electricity rules.  Claims for compensation are unusual events; to date, only one claim has been made in the NEM. However, it is important that the compensation frameworks are transparent and effective, as this will help ensure efficient outcomes for consumers.

The draft report contains several key recommendations designed to improve the functioning of the compensation frameworks. These include:

  • new processes for determining who is eligible to claim compensation;
  • changes to the AEMC’s process for assessing compensation claims;
  • clarification of the purpose of compensation; and
  • clarification of the processes for recovering the cost of compensation from market customers.

Stakeholders are invited to provide comment on the draft report. Submissions must be received no later than 24 January 2013.