The Australian Energy Market Commission today called for submissions on a draft determination to introduce new rules governing how generators sell electricity into the wholesale market.
Proposed changes to the bidding in good faith provisions in the National Electricity Rules would provide greater certainty to market participants about appropriate market conduct and bidding in the National Electricity Market.
The draft changes introduce:
- a prohibition against making false or misleading offers, which will be supported by a requirement for any variations to offers to be made as soon as practicable; and
- a new obligation that generators provide the Australian Energy Regulator with reports explaining reasons for last-minute electricity price rebids if they happen.
Under the changes, if last minute rebids are made in response to changed market conditions, then the reasons for those decisions will need to be made transparent to the regulator.
More reliable and timely information would be available to market participants and the regulator to help manage compliance with bidding rules.
AEMC Chairman, John Pierce, explained that while rebidding promotes efficient outcomes for consumers by enabling electricity supply to adjust to changed market conditions, there is a need for a strong governance and accountability framework around how rebids are made.
“Some last minute bidding behavior can lead to inefficient market outcomes if other market participants cannot respond to changed prices in time,” Mr Pierce said.
“At the same time, we recognise generators need flexibility to respond to changed market conditions when making rebids.
“We have balanced these considerations in the draft rule which is a proportionate response to the issues at hand.
“We expect the new arrangements will lead to more efficient wholesale price outcomes in the short term, and create investment signals that better reflect underlying conditions of supply and demand, in the long term interests of consumers.”
The Commission is seeking submissions on the draft determination from interested stakeholders. An extended consultation period of eight weeks means submissions are due on 11 June, with a final determination scheduled for 23 July this year.
The Commission also intends to hold a public forum in Brisbane on 18 May, with further details to follow in due course.
The original Bidding in Good Faith rule change request was submitted by the South Australian Minister for Mineral Resources and Energy.