Rule Change: Open
On 9 April 2020, the Australian Energy Market Operator (AEMO) submitted to the Commission proposing an urgent rule be made to delay the commencement of the Five minute settlement (5MS) and Global settlement and market reconciliation (GS) rule changes by 12 months.
AEMO has proposed the delay in response to the potential impact of COVID-19 on the energy industry. AEMO suggests that a delay to 5MS and GS would free up both human and financial resources which would be under strain during this period, ensuring the ongoing supply of energy and appropriate customer support.
On 14 May 2020 the AEMC published a consultation paper seeking feedback on the proposal. Key issues the Commission are seeking feedback on include:
- How has COVID-9 impacted participant cash flows and capacity, and what would be the impact of a delay on participant cashflow and capacity?
- How would a delay impact the contract market and participant risk management?
- What would be the impact of delaying the benefits of 5MS and GS by 12 months?
- If there were to be a delay, is 12 months the most optimal delay length, or is there another delay length that is more appropriate?
- Are there any implications for other parts of the National Electricity Rules or AEMO/AER/Information Exchange Committee procedures and guidelines?
The Commission request that submissions to the consultation paper use the template provided and include as much evidence as practicable of the impact of COVID-19. Submission to the consultation paper are due by 11 June 2020. However, given the expedited timeframes, early submissions are welcomed.
Initiation of the expedited rule change process
The Commission commenced the rule change assessment under the expedited rule making process. The Commission considers this rule change request should be considered urgent as:
- The COVID-19 pandemic has caused a severe economic downturn impacting consumers ability to pay their energy bills
- The potential reduction in revenue may cause financial stress for retailers and financial contagion in the energy sector, potentially impacting the effective operation of the wholesale exchange
- The rule change proposal may defer implementation costs for some participants under cash flow stress from COVID-19.
Any objections to the proposed urgent rule change process will must be submitted by close of business 28 May 2020. Objections should relate to the use of the urgent rule change process, and not the rule change proposal itself.
Consultation paper stakeholder briefing
The project team held a briefing for all interested stakeholders on Thursday, 21 May 2020. The slides from this briefing are attached here.
The purpose of this briefing was to provide an overview of the consultation paper and explain the rule change process. Additionally, AEMO provided a technical overview of how a delay could be implemented in practice.
AEMO is working with industry on implementation of 5MS and GS and the practicalities of delaying the commencement of these rule changes on the implementation plans. For more information refer to AEMO’s latest Readiness Working Group slides available here (slides 35-44).
- 14 May 2020: Rule change process initiated on date of publication of consultation paper
- 21 May 2020: Stakeholder briefing
- 28 May 2020: Objections close to proposed rule change process
- 11 June 2020: Submissions close to consultation paper
- 9 July 2020: Final determination and or rule published: