On 8 July 2024, the Australian Energy Market Commission (AEMC) received a rule change request from Energy Senior Officials and the Victorian Minister for Energy and Resources to amend the National Gas Rules.

The rule change request identifies limitations with the current east coast gas system (ECGS) trading function, which the Australian Energy Market Operator (AEMO) can currently 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 proposes a comprehensive arrangement of rules designed to support a supply-side and demand-side last resort (SoLR) 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 AEMC also intends to consider 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).

We are seeking feedback on the policy options discussed in the consultation paper

The paper considers the overarching problem presented in the rule change request and interactions with related reforms. We are seeking feedback on the following key areas:  

• the problem raised in the rule change
• policy options for the proposed SoLR mechanism
• key design features
• preconditions and triggers
• operating a SoLR mechanism  
• administered demand response
• cost recovery and proceeds distribution  
• providing transparency and accountability  
• implementation.

The AEMC welcomes feedback on any aspect of this paper. Submissions close on 30 October 2025.

The AEMC hosted an online information session for stakeholders on 1 October 2025, a copy of the slides can be found below.

Background

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.

Next steps

30 October 2025 – submissions to the consultation paper close 
Early 2026 – publication of the draft rule determination