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Rule Change

News Topic ID
19

AEMC Initiated Rules - Minor Changes 2020

16 January 2020

On 16 January 2020, the AEMC gave notice under the National Electricity Law and the National Energy Retail Law of its intention to initiate the Minor Changes 2020 rule change proposal under the expedited rule making process.  These rules are being initiated by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules and the National Energy Retail Rules to improve their quality.  As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders. 

Any written objections to the expedited process must be received by 30 January 2020. The Commission invites parties to provide submissions on the proposal by 13 February 2020. 

Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7817

Minor changes 2019

21 November 2019

On 21 November 2019, the AEMC made the National Electricity Amendment (Minor Changes) Rule 2019 No. 9, the National Gas Amendment (Minor Changes) Rule 2019 No. 4 and the National Energy Retail Amendment (Minor Changes) Rule 2019 No. 1. These Rules were made by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules (NER), National Gas Rules (NGR) and the Energy Retail Rules (NERR). As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders.

Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7800

AEMC Initiated Rules - Minor changes 2019

10 October 2019

On 10 October 2019, the AEMC gave notice under the National Electricity Law, National Gas Law and National Energy Retail Law of its intention to initiate the Minor changes 2019 rule change proposal under the expedited rule making process.  These rules are being initiated by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules, National Gas Rules and National Energy Retail Rules to improve their quality.  As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders. 

Any written objections to the expedited process must be received by 24 October 2019. The Commission invites parties to provide submissions on the proposal by 7 November 2019.

Final rule to fast-track approval processes for network investors

26 April 2019

The AEMC has made a final rule to remove barriers  so that network businesses can speed up their investments in time-critical projects.  

The final rule released today will support earlier answers being provided to network businesses which need to know if the costs of contingent projects will be recovered. This may also allow time-critical projects to progress more quickly – particularly those which have been identified as priority projects in the Australian Energy Market Operator’s Integrated System Plan.

Contingent projects are major network infrastructure assets which have been pencilled in to long-term investment plans. Contingent projects are flagged in network revenue proposals, and approved by the Australian Energy Regulator (AER) in revenue determinations. When a network business has met the requirements to request cost recovery from consumers for one of these projects, it submits a contingent project application to the AER. Currently,  network businesses cannot submit a contingent project application for approval in the last 90 business days of a regulatory year.

The final rule allows transmission and distribution network businesses to submit a contingent project application at any time during a regulatory control period up until the last 90 business days of the second last  year of a regulatory control period.

Contingent project applications would continue to be prevented from being submitted in the final year of a regulatory control period, and the 90 business days before the end of the second last year of a regulatory control period. This is because there needs to be a regulatory year left in the regulatory control period for revenue to be adjusted.

The final rule does not affect whether and when a network business can recover costs from consumers for a contingent project. It brings AER consideration and approval of a contingent project forward three to four months if the application is submitted prior to the second last year of a regulatory control period. 

The final rule was made in response to a rule change request from Energy Security Board Chair, Dr Kerry Schott AO. The request followed a meeting of the COAG Energy Council in December 2018, where Ministers agreed on an approach to deliver the priority transmission projects identified in the Australian Energy Market Operator’s Integrated System Plan as soon as possible, including rule changes to streamline regulatory processes.

As the rule change request was considered non-controversial, the AEMC followed an expedited rule making process. The new rule starts on 2 May 2019.

Media: Prudence Anderson, Communication Director, 02 8296 7817; 0404 821 935
 

Wholesale demand response technical working group discussion notes now available

26 April 2019

The AEMC has published discussion notes from the second meeting of the technical working group, which is helping to inform the AEMC’s assessment of three rule change requests related to facilitating wholesale demand response in the National Electricity Market (NEM).

Members of the group are experts from consumer groups, large consumers, network businesses, retailers, technology providers, market bodies and AEMO. The attendees of the meeting are listed below.

Member

Organisation
Mark Byrne Total Environment Centre
Bridgette Carter Bluescope
Dan Cass The Australia Institute
Nabil Chemali Flow Power
Chris Cormack AEMO

Alex Cruickshank		 Oakley Greenwood (representing Lance Hoch, Oakley Greenwood)
Emma Fagan Tesla
Joel Gilmore Australian Energy Council
Rebecca Knights South Australia Government
Matt Lady AER
Craig Memery Public Interest Advocacy Centre
Ben Pryor ERM Power
Jenessa Rabone AGL
Claire Richards Enel X
Jon Sibley ARENA
Georgina Snelling EnergyAustralia
Ben Verdon Energy Queensland

At the meeting on 15 April 2019 the group discussed potential options for facilitating wholesale demand response in the national electricity market and the issues that could arise from each option including:

  • potential regulatory changes that would require retailers in the NEM to offer standardised demand response products to customers
  • baselines for wholesale demand response including:
    • details on the design objectives for baselines 
    • three high level approaches for determining baselines (categorised according to whether settlement and baselines are undertaken centrally or not)
  • whether demand response can be treated equivalently to generation, particularly in relation to scheduling in the wholesale market.

These rule change requests are being progressed as part of the Commission’s broader Reliability work plan.  A draft determination on the rule change request is due to be published in July 2019.

Media: Prudence Anderson, Communication Director, 02 8296 7817; 0404 821 935 
 

New AEMC rules for stronger regulation of covered gas pipelines

14 March 2019

The Australian Energy Market Commission today made a final determination to implement a range of improvements to how transmission and distribution gas pipelines are regulated across Australia. 

These new rules follow a COAG Energy Council rule change request based on recommendations in the AEMC’s recent review of Parts 8-12 of the National Gas Rules to address concerns that customers may be paying more than necessary for gas pipeline services. 

The new rules are designed to help gas pipeline users negotiate lower prices and better deals. This will make it cheaper to move gas around the market, helping to keep gas and electricity prices for consumers as low as possible.

Specifically, the rules:

  • set out a new process for determining which services will have reference tariffs set by the regulator. Reference tariffs are the prices that pipeline operators can charge their customers
  • clarify how regulators calculate efficient costs so reference tariffs can be set at more efficient levels
  • strengthen reporting obligations to support more balanced negotiations. Pipeline owners will be required to provide more relevant, timely and accessible information for pipeline users through the Natural Gas Bulletin Board or on the pipeline owners’ websites
  • give stakeholders, including pipeline users, more input into regulators’ decisions
  • set a clear trigger for pipeline users to start arbitration if negotiations fail.

As some decision processes are currently underway, we have developed an implementation plan that allows the phased introduction of some of the rules to support a smooth transition.

Most provisions of the final rule will commence on 21 March 2019.

The AEMC fast-tracked this rule change as we had already consulted extensively on the issues and recommendations during the Parts 8-12 review. 

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817

Background

How covered gas pipelines are regulated

Covered gas pipelines are pipelines that are regulated by the Australian Energy Regulator (AER) or, the Economic Regulation Authority of Western Australia (ERA). 

They are regulated under a negotiate-arbitrate framework. Pipeline owners and pipeline users negotiate the terms, conditions and prices for access to pipeline services. 

Access arrangements set out the prices and terms and conditions which are approved by the regulator. These access arrangements serve as benchmarks for negotiations between pipeline owners and users. 

Negotiation is supported by information disclosure and regulatory decisions. Arbitration can be used if a deal cannot be agreed. 

Covered pipelines are subject to either:

  • full regulation, where the AER or ERA must approve a full access arrangement that sets out reference tariffs, terms and conditions, or
  • light regulation, where pipeline owners must comply with information provision requirements to support negotiations or alternatively seek regulatory approval for a limited access arrangement.

Review into the scope of economic regulation applied to covered gas pipelines

The COAG Energy Council requested the AEMC to undertake a review of Parts 8-12 of the National Gas Rules which set out how covered gas transmission and distribution pipelines are regulated. These parts include rules on the access arrangement process, information disclosure, revenue and price calculations, access terms and conditions, and an arbitration framework. 

In our final report in July 2018, the AEMC recommended a package of reforms to rebalance negotiating power between pipeline users and owners when negotiating gas transportation contracts. 

In addition to this rule change, we recommended:

  • the COAG Energy Council proposes law changes to the South Australian Parliament related to the dispute resolution process 
  • a review of the test used to determine whether a pipeline is subject to light or full regulation, as set out in parts of the National Gas Law and rules. This review is being carried out by the COAG Energy Council
  • regulators and AEMO update guidelines, systems and procedures to reflect changes to gas rules and law.

Consultation starts on streamlining the regulatory process for priority transmission projects

24 January 2019

The AEMC today published a consultation paper on a proposed rule change from Dr Kerry Schott AO, Chair of the Energy Security Board, to streamline the regulatory process for two priority projects identified in the Australian Energy Market Operator’s Integrated System Plan.

The inaugural Integrated System Plan, published in July 2018, forecasts where and when network investment needs to happen to support the large amount of new generation connecting to the grid in the coming years.  The plan has a list of priority transmission projects which includes minor upgrades to the interconnectors joining QLD-NSW and VIC-NSW.

The Energy Security Board considers these upgrades should be done before the likely retirement of the Liddell generator in NSW in 2022.

To meet this timeframe, Dr Schott proposes an amendment to the National Electricity Rules to reduce the time between the completion of the cost-benefit assessment (known as the regulatory investment test or RIT-T) for these projects, and when the Australian Energy Regulator makes its determination on whether the transmission businesses can recover the cost of the projects.

The rule change proposal does not remove any steps in the regulatory process, but saves time by allowing the AER to start a post-regulatory investment test step before the previous one has been completed.

As the AEMC considers this to be a non-controversial rule change proposal, we are proceeding under an expedited process, with a final rule due in March 2019.

Subject to any objections to the expedited process, there will only be one round of consultation. Objections to the use of the expedited process must be lodged by 7 February 2019.

Submissions on the consultation paper are due by 21 February 2019.

This rule change request is part of the AEMC’s recommended reforms to the transmission framework  set out in our final report for the Coordination of generation and transmission investment review published in December 2018.

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817

Related Articles

Embedding the Integrated System Plan in the regulatory framework

Security and reliability action plan 2019

Draft rule to enable metering coordinators to deactivate communications on smart meters

20 December 2018

The AEMC has made a draft rule to allow metering coordinators to deactivate the communications on already-installed advanced meters if requested by a customer.

Metering coordinators would first need to ensure the customer has sufficient information so they can make an informed decision when choosing to deactivate their meter.

Under the AEMC’s Competition in metering rules which started in December 2017 all new and replacement meters for small customers (households and small businesses) must be an advanced "type 4" meter unless:

  • there is no telecommunications network in the area to support a type 4 meter, or
  • a metering coordinator accepts a customer’s request to not have a type 4 meter at the time of installing a new meter.

In these circumstances, an advanced meter with the communications deactivated – known as a "type 4A" meter – can be installed. This means that the meter is no longer able to be read remotely or provide "smart" functions like demand response. 

Currently, if a customer moves into a house or business premises with an advanced meter already installed and wants the communications deactivated, there is no provision under the National Electricity Rules for the metering coordinator to undertake this task. The Australian Energy Council proposed a rule change so that this particular type of customer request can be addressed by the retailer and their appointed metering coordinator.

Under the draft rule, metering coordinators will be allowed to deactivate the communications on an installed type 4 meter when requested by a small customer. Metering coordinators can use their discretion to accept a small customer’s request for deactivation, but only if the metering coordinator or retailer has first given the customer the information they need to make an informed decision. This information includes the upfront costs, indicative ongoing expenses associated with a type 4A meter that will be payable by the customer and the differences in functionality between a smart meter and a deactivated meter.

Stakeholder submissions on the draft determination and rule are due by Thursday 7 February 2019.

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817

BACKGROUND

What are advanced meters?

Advanced meters (known in the NER as "type 4" meters) help customers get the most out of new technologies like rooftop solar, storage and energy efficient appliances. For example, smart meters enable "demand response". This is when consumers are paid to use less energy by switching off appliances or drawing power from their solar panels or battery storage instead of the grid. This helps the power system cope with extreme events, such as heatwaves, to avoid blackouts. 

These meters can also be remotely read which means that manual quarterly meter reads are no longer required. This results in lower cost for consumers as well as a greater variety in billing options for both retailers and consumers.

Advanced meters can also give information about energy consumed by new "smart" appliances – making it easier for consumers to move their use to off-peak times if they choose.

What is the role of the metering coordinator?

Metering coordinators are engaged by retailers to manage the installation and maintenance of meters for their customers. The retailer is the point of contact for the customer and provides instructions to the metering coordinator for any metering work needed by the customer. The metering coordinator will work with the designated metering provider and metering data provider to carry out this work as required.

Industry workshop to help consumers upgrade to smart meters

13 December 2018

A joint market bodies workshop by the AEMC, AER and AEMO to make it easier and faster for consumers to upgrade to smart meters was held in Adelaide last week.

Around 45 industry and government representatives attended the workshop, including retailers, network businesses, metering businesses, Master Electricians Australia, the National Electrical and Communications Association, ombudsmen and state government officials. 

The workshop focussed on improving the meter installation process in situations where it is difficult to isolate the meter, such as in some older apartment blocks. There was broad consensus that a lack of coordination and information sharing is making it difficult for those doing the work to identify and fix problems early in the process.

Participants at the workshop agreed on a set of actions, including a potential  rule change request to the AEMC to streamline the process for undertaking planned outages in situations where many customers will be affected. 

AEMO will also consider opportunities for more information sharing about individual meters through its NMI standing data review. This review is currently looking at standardising and simplifying the metering data that AEMO holds and makes available to industry.

The workshop followed the AEMC’s rule made last week that sets new deadlines for retailers to install electricity meters. The new rule, which starts in February, will address many of the delays that some homeowners and small businesses have been experiencing when they seek to upgrade or install a new meter.

Media: Bronwyn Rosser, Communication Specialist, 0423 280 341, (02) 8296 7847

BACKGROUND

New deadlines for installing electricity meters

Almost 600,000 smart meters have been installed in NSW, South Australia, Queensland, ACT and Tasmania, since changes were made by the AEMC to enable consumers to request smart meters directly from their retailers.

While this roll-out has been smooth for the vast majority of consumers, in some cases retailers have been too slow to have new meters installed, causing issues for homeowners particularly in cases where this prevents them from moving into their new homes. 

In December 2018 the AEMC made a rule that gives customers more control over when their electricity meter will be installed or upgraded. Retailers will have to provide new smart meters by a date agreed with customers. If no timing is agreed, retailers must install new meters within six working days after a property has been connected to the network.

If customers want to swap their old meter for a smart meter, retailers will have to agree on an installation time with the customer. If they cannot reach agreement, the retailer must make sure the work is done within 15 business days. Replacing a faulty meter must also be done within 15 business days. 

Failure to meet these deadlines could result in fines of up to $100,000 for each incident, and $10,000 for each day of delay.

It is part of the AEMC’s consumer action plan to help give consumers more control over their energy bills.

Victoria

As a result of a separate Victorian government rollout, almost all Victorian consumers already have advanced meters that were installed by distribution businesses. The Victorian government has made significant derogations from the metering provisions in the national rules.

Benefits of smart meters

Smart meters help get the most out of new technologies like rooftop solar, storage and energy efficient appliances. For example, smart meters enable ‘demand response’. This is when consumers are paid to use less energy by switching off appliances or drawing power from their solar panels or battery storage instead of the grid. This helps the power system cope with heatwaves and avoid blackouts. Smart meters can also give information about energy consumed by new ‘smart’ appliances – making it easier for consumers to move their use to off-peak times if they choose.

AEMC fast tracks draft rules to improve regulation of covered gas pipelines

06 December 2018

The Australian Energy Market Commission has published a draft determination to implement a range of improvements to the regulation of covered gas pipelines. The draft determination follows a COAG Energy Council rule change request based on recommendations in the AEMC’s recent review into the scope of economic regulation applied to covered pipelines. 

Today’s draft rules aim to address concerns that customers may be paying more than necessary for gas pipeline services. The draft rules should help pipeline users negotiate lower prices and better terms for their gas transportation agreements, resulting in lower gas prices for customers. 

Specifically, the draft rules would make access arrangements more relevant to a wider range of used and useful pipeline services. Also, the changes would help regulators make better informed decisions on setting reference prices.  This would enable prices to be set at more efficient levels and contract terms to be more balanced. 

Reporting obligations would also be strengthened to support more balanced negotiations. Pipeline owners would be required to provide more relevant, timely and accessible information for pipeline users through the Natural Gas Bulletin Board or on the pipeline owners’ websites. 

Additionally, the draft rules would give stakeholders, including pipeline users, more input into regulators’ decisions on access arrangements. 

The Commission has also considered how the draft rule would be implemented and its interaction with access arrangements and the implementation of non-access arrangement amendments. 

As we consulted extensively on the issues and recommendations contained within the rule change request through our recent review, a fast track process is being used for this request, with no first round of consultation.

Stakeholders are invited to make submissions on the draft determination by 31 January 2019 (the consultation period has been extended to eight weeks to allow for the Christmas period). A final determination is due in March 2019.

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817
 

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