On 9 July 2026, the Australian Energy Market Commission (AEMC) published a draft determination and more preferable draft rule to improve compensation frameworks in the National Electricity Market (NEM).

The draft rule proposes a suite of amendments to improve how compensation is assessed and administered across directions, market suspension, and administered pricing. These changes would clarify existing rules, improve consistency across frameworks, and provide clearer, more predictable processes for participants.

Well-functioning compensation frameworks are critical to maintaining participant confidence during periods of market intervention. By strengthening these frameworks, the draft rule aims to support reliability and security in the NEM by ensuring participants are appropriately compensated for providing energy and other services during system and market stress events.

The draft rule largely implements recommendations from the AEMC’s 2024 review into compensation frameworks. The AEMC has also made a draft determination on other proposals from rule change requests submitted by AEMO and Tilt Renewables.

Key elements of the draft rule include:

• improving the calculation of compensation by introducing a consistent methodology across frameworks
• allowing opportunity costs to be claimed across all compensation frameworks
• introducing clearer and more consistent governance and administrative processes
• improving alignment in cost recovery arrangements and supporting information requirements.
• We welcome submissions to the draft determination by 3 September 2026.

Background

This rule change follows the AEMC’s review into compensation frameworks, initiated after the June 2022 energy crisis, where extreme market conditions led to administered pricing, directions, and the suspension of the market.

The review identified the need for clearer, more consistent, and more efficient compensation frameworks. It recommended improving transparency, aligning methodologies, and reducing unnecessary complexity across the frameworks.

Stakeholder feedback to both the review and consultation paper has informed the development of the draft rule, with broad support for improving clarity, predictability and alignment across compensation frameworks.