On 26 February 2026, the AEMC published a draft determination and more preferable draft rule that introduces a supplier of last resort mechanism (SoLR) into the National Gas Rules (NGR).

This mechanism aims to help address threats to gas reliability and supply adequacy in the ECGS. The SoLR mechanism provides guidance  on how the ECGS trading function in the National Gas Law (NGL) would be used by the Australian Energy Market Operator (AEMO). In doing so, the draft rule provides greater clarity and certainty for AEMO, industry participants, governments and gas consumers.

We are seeking feedback on the draft determination and draft rule by Thursday 23 April 2026.

About the draft rule

The key features of the draft rule are that it: 

• Removes the current $35 million trading fund and associated rules.
• Introduces a SoLR mechanism that would enable AEMO to procure a range of supply and demand-side services to address identified threats to gas reliability and supply adequacy in the ECGS.
• Clarifies that the SoLR mechanism is one of a suite of tools available to AEMO to address threats to gas reliability, and should only be used after industry responses are exhausted. 
• Links the preconditions for establishing SoLR contracts and the trigger for activating SoLR contracts to the tiered risk or threat signalling framework set out in the ERSAA draft rule.
• Describes how AEMO would operate the SoLR mechanism, including using a competitive tendering process.
• Provides a price limit on the maximum amount AEMO should pay to providers of SoLR services contracted following the tender process. 
• Sets out the method for recovering costs and distributing any proceeds from the use of the SoLR mechanism.
• Requires AEMO to publish a set of notices to inform market participants when AEMO establishes, activates and ceases to use the SoLR mechanism.
• Requires AEMO to make, review and update relevant ECGS procedures and guidelines.

Background

On 8 July 2024 the AEMC received a rule change request from Energy Senior Officials and the Victorian Minister for Energy and Resources to amend the NGR.

The rule change request identified several limitations with the current ECGS trading function, which AEMO can use to trade in gas or to purchase pipeline, compression or storage services. This includes that the current arrangements lack guidance for AEMO on using the $35 million trading fund associated with the function, and provide few 
guardrails to check its use.

The request proposed rules designed to support a last resort function for AEMO to intervene in the ECGS to address threats to reliability and supply adequacy that market participants have been unable to resolve.

The Commission has also considered the potential impact of any changes made in response to this request on the interim arrangements for the Dandenong LNG storage facility in the Victorian declared wholesale gas market (DWGM).

This rule change request is one of four rule change requests that seek to improve the reliability and supply adequacy (RSA) of the ECGS.

The changes proposed by the four rule change requests intend to build the second stage of an RSA framework, complementing the first stage changes to the NGR applied to the ECGS (stage 1).

Information on stage 1 RSA reforms and an overview of the stage 2 rule change requests is in our background paper published in March 2025. The background paper also includes information on relevant features of the ECGS and the gas markets.

Since the lodgement of the stage 2 RSA rule change requests, governments have continued to work on reforming the gas sector. Of most relevance to this draft determination is a third reform package for the RSA framework (the LT RSA reforms).

The AEMC published a consultation paper on 25 September 2025, a copy can be found below. The period for making submissions to the consultation paper closed on 30 October 2025.

Next steps

13 March 2026 – AEMC online information session (jointly with ERSAA) 
23 April 2026 – Submissions to the draft determination close