The Australian Energy Market Commission today published a Supplementary Report on Pricing for public consultation in relation to the Optional Firm Access, Design and Testing review, which was referred to the Commission by the COAG Energy Council in February 2014.
The Supplementary Report follows the Commission’s First Interim report published in July, and provides stakeholders a progress update on the access pricing element of the model.
To help stakeholders engage with this aspect of the review a prototype pricing model has been developed to improve understanding of how the pricing method could be implemented in practice. This model is available to stakeholders on request.
Stakeholders are invited to provide submissions on the Supplementary Report by Thursday 11 December.
The AEMC will also hold two workshops on the issues raised in the Supplementary Report, in Sydney on 13 November and Melbourne on 14 November. Those interested in registering for the workshops can register here for the Sydney workshop; and here for the Melbourne workshop.
The optional firm access model is intended to contribute to a market that is able to adapt to changing conditions being experienced in energy markets, particularly demand and generation patterns, to deliver better outcomes for consumers.
The model is also intended to introduce more commercial drivers on transmission businesses, and more commercial financing of transmission infrastructure, which could shift some transmission investment risk away from consumers.
At the same time, optional firm access would better enable generators to signal where they value transmission capacity. Better coordination of transmission and generation investment could minimise the cost of building and operating generation and transmission over time, and so potentially minimise prices for electricity consumers in the longer term.
For more information, including the Supplementary Report on Pricing and associated Information Sheet, please visit the project page for this review.