Regulation Impact Statement Updates

Official website for publishing regulatory impact analysis information for regulatory decisions announced by the Australian Government, COAG and COAG Councils.

Threshold for Participant Compensation Following Market Intervention

25th September 2019

COAG Consultation Regulation Impact Statement – Australian Energy Market Commission

On 15 August 2019, the Australian Energy Market Commission (AEMC) released the draft rule determination for the National Electricity Amendment (Threshold for Participant Compensation Following Market Intervention) Rule 2019 (draft determination). The AEMC has also released the corresponding Draft National Electricity Amendment (Threshold for Participant Compensation Following Market Intervention) Rule 2019 for consultation.

The draft rule determination relates to the compensation framework which ensures that participants who have been directed by Australian Energy Market Operator (AEMO) to provide services are not "out-of-pocket". This framework also compensates participants affected by the intervention in order to put them in the position that they would have been in but for the direction or reliability and emergency reserve trader (RERT) activation.

On 17 December 2018, AEMO submitted a rule change request which seeks to amend the $5,000 per trading interval threshold below which compensation is not payable to affected participants, and below which additional compensation cannot be claimed by directed participants.

The AEMC has determined to make a more preferable rule which will:

  • Amend the National Electricity Rules (NER) so that the $5,000 threshold for additional compensation claims by directed participants will be applied per direction, rather than per trading interval; and
  • Make no change to the application of the $5,000 threshold to affected participant compensation payments.

The draft determination has been assessed by the Office of Best Practice Regulation as compliant with requirements for a Council of Australian Governments Consultation RIS.

Submissions are invited by close of business, 26 September 2019. More information on the consultation process, including how to make a submission, can be found here.

Please note: the draft determination is web accessible in PDF only and any accessibility queries should be directed to the Australian Energy Market Commission.

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