On 23 July 2026, the AEMC made a draft determination and rule allowing the Australian Energy Market Operator (AEMO) to accept cash as credit support in the Declared Wholesale Gas Market (DWGM) and the Short Term Trading Market (STTM), up to a limit of $10 million per participant in each market. 

The draft rule would increase flexibility for participants to provide credit support, lowering barriers to entry and reducing costs. It would also increase competition in the gas markets, benefiting consumers, and streamlining credit support requirements across the gas and electricity markets.

The draft rule would also introduce new protection measures, in addition to the existing National Gas Law (NGL) displacement provisions, to mitigate any risks to AEMO and participants that could arise from allowing cash as credit support.

We are seeking stakeholder feedback on the draft determination and rule by 3 September 2026.

The draft rule would allow cash as credit support in the DWGM and the STTM

Under the National Gas Rules (NGR) prudential framework, market and trading participants (participants) must provide credit support to AEMO when they are a net debtor to AEMO. This allows AEMO to manage financial risks associated with a participant defaulting and being unable to pay its outstanding settlement. Currently, participants can only provide credit support in the form of a bank guarantee or letter of credit, and cash is not allowed as credit support.

Delta Electricity (Delta) considers that while historically, participants did not face barriers in obtaining bank guarantees, there has been an increasing trend of financial institutions no longer providing credit support to participants with exposure to fossil fuels like coal and gas fired electricity generation and coal mining. For this reason, Delta perceives that there is a risk that participants, while being a profitable and solvent business, may be unable to provide credit support to AEMO.

The Commission’s draft rule is to allow participants to provide cash as credit support in the DWGM and STTM. This would increase flexibility for participants to meet their prudential requirements and allow them to choose the option that suits them best in order to provide credit support. The draft rule largely replicates a similar rule change made by the AEMC allowing AEMO to accept cash as credit support in the National Electricity Market (NEM), with some gas market-specific adjustments to ensure that the draft rule addresses our assessment criteria and promotes the National Gas Objective (NGO).

The draft rule would mitigate clawback risks associated with allowing cash as credit support 

Allowing cash as credit support exposes AEMO and other participants to clawback risks. A clawback risk could arise if a participant went into liquidation or administration, and the appointed liquidator sought to clawback any cash provided as credit support by that participant to AEMO.

The draft rule would introduce new measures to sufficiently mitigate clawback risks without introducing unnecessary complexities or adverse consequences. These include:

• Clarifying that the NGR default procedures, including the provision and use of cash credit support, fall within the Corporations Act displacement provisions in the NGL
• Granting AEMO a first ranking charge, return rights and set off rights over cash provided as credit support
• Limiting the amount of cash each participant can provide as credit support to $10 million in the DWGM and the STTM separately
• Requiring participants receiving net payments from AEMO (typically net gas sellers) to bear any clawback costs incurred by AEMO

Background

On 28 July 2025 the AEMC received a rule change request from Delta to amend the National Gas Rules. This request follows from a similar rule change made by the AEMC on 26 June 2025 Allowing AEMO to accept cash as credit support in the NEM up to a limit of $20 million, which will commence on 1 November 2026.

On 26 March 2026 the AEMC published a consultation paper to seek stakeholder feedback on Delta’s proposal. We received eight submissions, broadly supporting allowing cash as credit support in the gas markets, while also noting that associated risks would need to be mitigated. Our draft determination and draft rule has considered stakeholder feedback.