National Electricity Rules Chapter Summaries
To assist you with orientating yourself within the National Electricity Rules particularly the current rules, you can access summaries of the content in each chapter below:
- Chapter 1: Introduction
- Chapter 2: Registered Participants and Registration
- Chapter 2A: Regional Structure
- Chapter 3: Market Rules
- Chapter 4: Power System Security
- Chapter 4A: Retailer Reliability Obligation
- Chapter 5: Network Connection Access, Planning and Expansion
- Chapter 5A: Electricity Connection for Retail Customers
- Chapter 6: Economic Regulation of Distribution Services
- Chapter 6A: Economic Regulation of Transmission Services
- Chapter 6B: Retail Markets
- Chapter 7: Metering
- Chapter 8: Administrative Functions
- Chapter 8A: Participant Derogations
- Chapter 9: Jurisdictional Derogations and Transitional Arrangements
- Chapter 10: Glossary
- Chapter 11: Savings and Transitional Rules
Chapter 1: Introduction
This Chapter is introductory, including rules of interpretation and information on numbering of, and reference to, provisions, service of notices, and Australian Energy Market Operator Rule funds.
Chapter 2: Registered Participants and Registration
This Chapter establishes the various categories of Registered Participants and the registration requirements for each category (including eligibility criteria and unit classification requirements). It also contains provisions on the registration process, transfer of registration, ceasing to be a Registered Participant, and on how the Australian Energy Market Operator is to determine participant fees.
Chapter 2A: Regional Structure
This Chapter provides for the Australian Energy Market Commission to determine, and for the Australian Energy Market Operator to publish, the regions of the National Electricity Market. In this Chapter:
- Part A provides a framework for applicants to propose changes to the regions of the National Electricity Market to address congestion problems, and for the Australian Energy Market Commission to make changes to these regions, including consider and consult on proposed changes and make determinations, and
- Part B sets out procedures for the implementation or regional changes by the Australian Energy Market Operator.
Chapter 3: Market Rules
This Chapter contains the main body of rules that govern the operation and administration of the National Electricity Market. It sets out provisions relating to:
- market design principles
- prudential requirements for participation in the market
- establishment and operation of the spot market
- network losses and constraints
- the Australian Energy Market Operator’s responsibilities for matters including:
- operation of the National Electricity Market, including the spot market, day to day operation of the power system, and the procurement of services to support power system security and quality of supply
- administering the medium and short term Projected Assessment of System Adequacy program relating to power system security and reliability of supply
- developing, maintaining and publishing Market Management System Access Procedures, and
- the Reliability and Emergency Reserve Trader function, to maintain power system reliability and system security using reserve contracts
- central dispatch and spot market operation
- determination of prices, including spot prices, prices for ancillary services, and intervention pricing declared by the Australian Energy Market Operator
- acquisition of ancillary services that are essential to the management of power system security, facilitate orderly trading of electricity and ensure that electricity supplies are of acceptable quality
- market intervention by the Australian Energy Market Operator and compensation for such intervention
- requirements for the provision of market and participant information by, and to, the Australian Energy Market Operator, including information about existing and proposed generation projects, distributed energy resources, demand side participation, network congestion, available capacity of generators, adequacy of electricity supply, the operation of the spot market, requirements for ancillary services, settlements residue auctions, an Electricity Statement of Opportunities
- conditions and procedures for the Australian Energy Market Operator to:
- apply an administered price cap for each region of the National Electricity Market to protect and sustain electricity trading during periods of sustained high prices, and
- declare the spot market to be suspended in a region, in extreme conditions, including payment of compensation
- settlement of payments due for transactions under Chapter 3
- the Participant Compensation Fund, and
- settlement residue auctions, including auction eligibility and rules.
The Schedule to this Chapter sets out requirements for providing bid and offer validation data to the Australian Energy Market Operator.
Chapter 4: Power System Security
This Chapter provides the framework for achieving and maintaining a secure power system, and specifies the conditions under which the Australian Energy Market Operator can intervene in the processes of the spot market and issue directions to Registered Participants in order to maintain or re-establish a secure and reliable power system.
This Chapter deals with:
- concepts relevant to power system security, including the concepts of satisfactory, reliable and secure operating states, credible and non-credible contingency events, protected events, power system security, and the technical envelope
- power system security responsibilities and obligations of the Australian Energy Market Operator, network service providers and market customers
- power system frequency control responsibilities and obligations of the Australian Energy Market Operator and generators, including in relation to enabling inertia network services and system strength services
- control and maintenance of power system voltage
- protection of power system equipment
- cooperation between the Australian Energy Market Operator and network service providers in relation to power system stability
- obligations relating to protection of the secure operation of the power system, including the Australian Energy Market Operator’s management of conditions or events that could impact the secure operation of the power system
- responsibilities of the Australian Energy Market Operator, generators, scheduled network service providers and market participants for power system security related market operations
- power system operating procedures for transmission and distribution networks
- power system security support, including remote control and monitoring devices and operational control and communication facilities
- use of nomenclature standards agreed or determined by the Australian Energy Market Operator, and
- establishment of, and compliance with, performance standards.
Chapter 4A: Retailer Reliability Obligation
This Chapter creates a mechanism to assist in the maintenance of reliability in the National Electricity Market to ensure that the power system has sufficient generation, demand response, and network capacity to supply customers with the energy that they require. In this Chapter:
- Part A is introductory
- Part B sets out the requirements for the Australian Energy Market Operator in making a ‘reliability forecast’
- Part C sets out the process for the Australian Energy Market Operator to request a reliability instrument and for the Australian Energy Regulator to decide whether to make the reliability instrument
- Part D specifies which entities are liable under the Retailer Reliability Obligation, including how non-liable entities can ‘opt in’ to manage their obligation directly and how entities that enter the market after the contract position day are treated
- Part E covers how liable entities can use qualifying contracts to comply with the Retailer Reliability Obligation
- Part F deals with compliance with the Retailer Reliability Obligation
- Part G places a market liquidity obligation on generators, which operates between the making of a T-3 reliability instrument and the making of a T-1 reliability instrument by the Australian Energy Regulator, and
- Part H details a separate voluntary book build mechanism run by the Australian Energy Market Operator to help liable entities secure contracts with new resources after a T-3 reliability instrument has been made.
Chapter 5: Network Connection Access, Planning and Expansion
This Chapter regulates the connection to, and the planning and expansion of, the power system. In this Chapter:
- Part A is introductory
- Part B provides a framework for connection and access to a transmission network or a distribution network and to the national grid (however, connection of retail customers, including micro embedded generators, is covered in chapter 5A)
- Part C addresses the network related issues following the negotiation of a connection agreement under Part B, namely the design of connected equipment, inspection and testing, commissioning and disconnection and reconnection, and
- Part D deals with the planning and expansion of networks and the national grid.
Schedules to this Chapter provide more detailed technical information, including on
- system standards that are necessary or desirable for the safe and reliable operation of facilities and equipment
- network performance requirements to be provided by, or coordinated between, network service providers
- conditions for the connection of generators, network users and market network services
- information requirements for primary transmission network service providers, and for making and responding to enquiries and applications for connection, annual forecasting and planning, and demand side engagement
- terms and conditions of connection agreements and network operating agreements, and
- negotiation principles for negotiated transmission services and large dedicated connection assets.
Chapter 5A: Electricity Connection for Retail Customers
This Chapter regulates the provision of electricity connection services by distributors to retail customers (including those with micro embedded generation such as rooftop solar panels). In this Chapter:
- Part A is introductory
- Part B deals with model standing offers (requiring approval by the Australian Energy Regulator) to provide basic and standard connection services
- Part C sets out a regulated framework for the negotiation of connection contracts that are not standing offers
- Part D deals with applications for connection services
- Part E deals with connection charges
- Part F deals with the formation and performance of connection contracts
- Part G deals with the resolution of disputes between retail customers and distributors, and
- the Schedule sets out minimum content requirements for connection contracts.
Chapter 6: Economic Regulation of Distribution Services
This Chapter deals with the classification and economic regulation of distribution services. In this Chapter:
- Part A is introductory
- Part B confers power on the Australian Energy Regulator to classify distribution services, to determine the forms of control for distribution services, and to make distribution determinations
- Part C sets out the building block approach to the regulation of services classified as standard control services
- Part D regulates the prices that may be charged by distribution network service providers for the provision of services classified as negotiated distribution services
- Part DA deals with the preparation of, requirements for and approval of, connection policies
- Part E sets out the procedure and approach for the making of a distribution determination
- Part F regulates cost allocation
- Part G contains the distribution consultation procedures
- Part H deals with ring-fencing
- Part I deals with tariff classes and tariffs
- Part J deals with billing and settlements
- Part K deals with prudential requirements, prepayments and capital contributions
- Part L deals with dispute resolution
- Part M deals with the disclosure of transmission and distribution charges
- Part N provides for services provided by, or in connection with, dual function assets to be the subject of distribution determinations, and
- Part O sets out the requirements to prepare annual benchmarking reports.
Chapter 6A: Economic Regulation of Transmission Services
This Chapter deals with the classification and economic regulation of transmission services. In this Chapter:
- Part A is introductory
- Part B states the general obligation of the Australian Energy Regulator to make transmission determinations for transmission network service providers in respect of prescribed transmission services
- Part C regulates the revenues that may be earned by transmission network service providers from the provision by them of transmission services that are the subject of transmission determinations
- Part D has been deleted
- Part E sets out the procedure and approach for the making of a transmission determination by the Australian Energy Regulator
- Part F contains provisions regarding the disclosure, use and protection of information
- Part G contains provisions regarding cost allocation
- Part H contains provisions regarding the transmission consultation procedures
- Part I contains provisions regarding Transmission Ring Fencing Guidelines
- Part J regulates the prices that may be charged by transmission network service providers for the provision of prescribed transmission services and establishes principles to be applied by providers in setting prices that allow those providers to earn the whole of the aggregate annual revenue requirement
- Part K has been deleted, and
- Part L sets out the requirements to prepare annual benchmarking reports.
Chapter 6B: Retail Markets
This Chapter deals with retail support obligations between distributors and retailers in respect of shared retail customers. In this Chapter:
- Part A deals with billing and payment, including incidental matters like adjustment of, and changes to, network charges, tariff reassignments, disputes and interest, and
- Part B establishes a credit support regime in respect of outstanding service charges, with a prescribed form of unconditional undertaking for credit support included in the Schedule.
Chapter 7: Metering
This Chapter deals with metering requirements. Market participants are obliged to establish, and register with the Australian Energy Market Operator, metering installations in respect of electricity connection points that measure electricity use. This Chapter provides a detailed regime for the administration of metering installations and the disclosure and use of metering data. In this Chapter:
- Part A is introductory
- Part B sets out the roles and responsibilities of financially responsible market participants, metering coordinator and the Australian Energy Market Operator
- Part C deals with the appointment of a metering coordinator and metering coordinator default arrangements
- Part D sets out metering installation requirements
- Part E deals with metering data services and the metering database, metering register requirements, disclosure of NMI information and metering data provision to retail customers
- Part F deals with security of, and rights to access, metering installations, services provided by metering installations, energy data held in metering installations and metering data from metering installations
- Part G deals with procedures to be established, maintained and published by the Australian Energy Market Operator including the metrology procedures and service level procedures, and
- Part H sets out the business-to-business (B2B) framework, which provides for a standard form of communications between businesses for certain services related to small customer meters.
Schedules to this Chapter deal with:
- metering register information
- accreditation and registration of a metering provider, metering data provider and embedded network manager
- types of metering installations and accuracy requirements
- metering installation minimum services specification requirements, and
- metering installation inspection and testing requirements.
Chapter 8: Administrative Functions
This Chapter describes some of the key processes and obligations associated with the administration of the Rules and deals also with augmentations. In this Chapter:
- Part A is introductory
- Part B deals with dispute resolution
- Part C deals with the obligations of registered participants to maintain confidentiality
- Part D deals with monitoring and reporting
- Part E deals with the structure and responsibilities of the Reliability Panel
- Part F sets out the Rules consultation procedures
- Part G deals with funding for the Consumer Advocacy Panel
- Part H deals with augmentations to the declared transmission system of an adoptive jurisdiction, with principles to be reflected in agreements relating to contestable augmentations set out in the Schedule, and
- Part I deals with the Australian Energy Regulator’s responsibilities for developing, maintaining and publishing a methodology for calculating values of customer reliability.
Chapter 8A: Participant Derogations
This Chapter contains the derogations that have been granted to particular participants.
Chapter 9: Jurisdictional Derogations and Transitional Arrangements
This Chapter contains the jurisdictional derogations that apply to each participating jurisdiction. This Chapter prevails over all other Chapters of the Rules.
Chapter 10: Glossary
This Chapter contains the definitions of terms used throughout the Rules.
Chapter 11: Savings and Transitional Rules
This Chapter sets out:
- savings provisions which operate to preserve, in whole or in part, an existing Rule that would otherwise cease to have effect because of a new Rule or amendments to an existing Rule
- transitional provisions which regulate the operation or coming into effect of a new Rule or amendments to an existing rule, for a finite period, and
- application provisions which provide exactly how a new Rule will apply and how an old Rule will cease to apply.
The provisions in this Chapter are in chronological order, by the date on which the relevant amending rule was made.