The Australian Energy Market Commission today made stronger rules to deter false or misleading late rebids by generators when they sell electricity into the wholesale market.
The new rules prohibit generators from making false or misleading offers. If rebids are made at the last minute in response to changed market conditions, then the generator must keep a record of the reasons for those decisions.
The rule changes also provide the AER with better tools to manage compliance with bidding rules and take enforcement action in cases of false or misleading rebidding.
AEMC Chairman, John Pierce, explained that in most circumstances, rebidding promotes efficient outcomes for consumers by enabling electricity supply to adjust to changed market conditions. However, there is a need for a strong governance and accountability framework around how rebids are made.
“Some last minute bidding behaviour can lead to inefficient market outcomes if participants are deliberately delaying when rebids are made and effectively withholding information from the market,” Mr Pierce said.
“At the same time, we recognise that to be effective the market needs flexibility to respond to changed market conditions.
“We have balanced these considerations in the 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 signals that better reflect underlying conditions of supply and demand, in the long term interests of consumers.”
The new rules come into effect from 1 July 2016.
The Bidding in Good Faith rule change request was submitted by the South Australian Minister for Mineral Resources and Energy.
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