Rule Change: Open

Overview

On 01 September 2022, the AEMC published a consultation paper on a rule change request that seeks to reduce the risks to system security and public safety and improve the reliability of supply in the Victorian declared wholesale gas market (DWGM) between winter 2023 and 2025. 
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On 01 September 2022, the AEMC published a consultation paper on a rule change request that seeks to reduce the risks to system security and public safety and improve the reliability of supply in the Victorian declared wholesale gas market (DWGM) between winter 2023 and 2025.  

The proposed rule amends Part 19 of the National Gas Rules (NGR) to require the Australian Energy Market Operator (AEMO) to: 

  • act as buyer of last resort of capacity in the Dandenong liquified natural gas (LNG) storage facility and hold a target level of LNG stock in this facility during the winter months 
  • act as supplier of last resort in relation to the use of its LNG stock. 

The proposed rule also sets out: 

  • the contractual arrangements to be put in place between AEMO and the LNG storage provider to support AEMO's roles as buyer and supplier of last resort 
  • how the costs AEMO incurs as buyer and supplier of last resort are to be recovered from market participants 
  • the accountability and transparency measures that would apply to AEMO in its capacity as buyer and supplier of last resort. 

The consultation paper sets out the context and background of the rule change request and identifies several questions and issues to facilitate consultation. 

Background 

On 08 August 2022, the AEMC received a rule change request from the Victorian Minister for Energy, Environment and Climate Action to amend Part 19 of the NGR, which covers the Victorian DWGM.  
The proponent also provided a proposed draft rule. A copy of the rule change request is available below. 

Treatment as an urgent rule change request 

The Commission considers that this rule change request is a request for an urgent rule and therefore has decided to use the expedited rule change process, if it does not receive any valid requests not to use the expedited process by 15 September 2022. 

Objections to using the expedited rule change process

Under section 304(3) of the National Gas Law (NGL), the AEMC must not make a rule in accordance with the expedited process if the AEMC receives a written request not to do so, and the reasons set out in the request are not, in its opinion, misconceived or lacking in substance.

On 15 September 2022, the Commission received one objection to not using an expedited process. The Commission considered the reasons outlined in the objections submitted and decided that the reasons provided in the requests are misconceived or lacking in substance.

The objection has been published below, along with the Commission’s reasons.

Extension

On 01 September 2022, the Commission extended (at initiation) the timeframe to make a final determination to 24 November 2022 under section 317 of the NGL. This extension was made to allow the Commission sufficient time to make any necessary changes to the rules once submissions were received and carry out additional stakeholder engagement which is expected to be necessary given the nature of the request. 

On 27 October 2022, the Commission extended the date for making the final rule determination, under section 317 of the National Gas Law (NGL). This extension was made to allow the Commission more time to investigate concerns raised by stakeholders about key elements of the proposed rule and identify potential solutions, in consultation with AEMO and stakeholders. 

Consultation process

On 01 September 2022, the AEMC published a consultation paper on the rule change request. We received 11 submissions, which can be found below. 

The AEMC also held a stakeholder information session on 02 September 2022 that provided an overview of the issues discussed in the consultation paper. The material presented can be found below. 

The AEMC held a stakeholder workshop on 28 October 2022 to discuss stakeholder views and key issues. The material presented at this workshop is available below.

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Documentation