Rule Change: Completed
On 12 December 2017 the AEMC published a final rule and final determination on the Contestability of energy services rule change requests.
Overview of the final rule
The final rule, which is a more preferable rule, has the following key features:
- restrictions on DNSPs earning a regulated return on assets located ‘behind the meter’
- provisions that improve the distribution service classification framework’s ability to respond to technology changes
- a requirement for the AER to develop and publish guidelines that set out the AER’s approach to classifying distribution services.
Technology, and the increased choices it offers consumers, is changing the energy sector. In particular, technologies such as battery storage – which can provide multiple services – make it more difficult to draw the line between what is economically regulated and what is provided by contestable markets.
Against this backdrop of change, the Council of Australian Governments (COAG) Energy Council and the Australian Energy Council – an industry body representing generators and retailers – submitted rule change requests seeking to facilitate competition in the emerging energy services market as well as improving clarity and transparency of the distribution service classification framework.