On 25 June 2026, the AEMC published a final determination and more preferable final rule that introduces a supplier of last resort (SoLR) mechanism into the National Gas Rules (NGR).  

This final rule is part of a set of four rule changes that together form the stage 2 RSA reforms.  

This mechanism will be available to help address threats to gas reliability and supply adequacy in the ECGS. The mechanism provides guidance in the NGR on how the east coast gas system (ECGS) trading function in the National Gas Law (NGL) can be used by the Australian Energy Market Operator (AEMO). The ECGS trading function was established through the stage 1 reliability and supply adequacy (RSA) reforms in 2023.  

In making the final rule, the AEMC has been informed by stakeholder submissions to the consultation paper and draft determination. Continuous engagement with industry participants and AEMO has also been critical to refining the draft rule into the final form of the SoLR mechanism.  

The key features of the final rule are that it:  

• Enables AEMO to procure supply‑side and demand‑side services to address threats to gas reliability and supply adequacy in the ECGS.  
• Requires AEMO to use competitive tendering to seek out potential demand and supply responses to identified reliability threats.  
• Includes other key design features to guide AEMO and industry participants on its use.
• Provides AEMO with a cost constraint for its expenditure on SoLR service contracts (escalated by CPI over time).  
• Establishes clear preconditions and triggers for the SoLR mechanism.
• Sets out how the SoLR mechanism operates once a tier 3 threat has been identified and communicated under the tiered risk or threat signalling framework.
• Implements a demand-based cost recovery and proceeds distribution process.
• Enhances transparency and accountability to industry participants.

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 sought to implement 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 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.

On 26 February 2026, the AEMC published a draft determination and more preferable draft rule to introduce a SoLR mechanism into the NGR.  

Stakeholders provided their feedback on the draft determination and draft rule by Thursday 23 April 2026.