Insights

30/05/18

Australian Energy Regulatory Market Update | Period up to 25 May 2018

It has been some time since our last update, and so I’m afraid that this one is especially crammed.  

Highlights:

  • The NEG debate has moved into implementation mode with the COAG Energy Security Board issuing a number of technical papers addressing proposed implementation of the earlier design.  Some, such as requiring transparent hedging, have proved particularly contentious.  For those who have not read Danny Price vs Rod Sims on the topic, the AFR coverage is here.
  • The ACCC released a further interim gas market report, which found continuing progress and improvement but with work still to do.
  • The 16th Ministerial Energy Council met on 20 April.  The main focus was on the NEG, with some discussion about the multi-regulator Energy Security Board taking over responsibility for coordinating market planning for transmission.  The communique is here.
  • The AER continued its process of increasing reporting around profitability of DNSPs and published a draft position paper.  Quite how the measures will be used remains unclear, although the AER has indicated they will provide ‘context’ for future revenue resets.
  • Everyone loves a good roadshow and AEMO has been holding a roadshow over April and May presenting on generator registration and connection arrangements for the NEM.
  • As always, there have been a series of rule change proposals on the AEMC’s desk, including:
    • a number of the rule change proposals introduced to implement recommendations from the Finkel Review, including the “Hazlewood” obligation for large generators to provide 3-years notice prior to closing and work around the value of reliability to energy consumers;
    • improvements in the medium term supply adequacy assessment (following improvements made by AEMO to its 2-year forecasts);
    • a rule change proposal by AEMO to introduce a new compensation framework for NEM participants who incur losses during a market suspension, such as occurred during the SA black system event in 2016;
    • at the consumer end, the Federal Minister introduced a draft rule change proposal to permit meter self-reads (rather than relying on estimates) and AEMC introduced a rule preventing discounting from rates above standing offers – a move that encouraged Rod Sims to also slam the practice this week.
  • The Clean Energy Regulator published an interesting piece, highlighting that there is enough renewable projects in place, or under construction, to meet the 2020 RET.
  • Across the States:
    • IPART sought input on their financeability test (used to assess pricing decisions).  IPART applies the test as a ‘check’ on its rate of return decisions.
    • The ESC has identified the accuracy of meter estimate readings, in its annual audit of the sector.
    • In WA, the Supreme Court dismissed a judicial review application in relation to a decision by the ERA decision related to proposed revisions to the Goldfields Gas Pipeline Access Arrangement.
    • The QCA commenced an investigation into overcharging by Ergon energy of charges for large customer metering.  Such investigations have been rare in Queensland, to date.

And finally, for the regulatory tragics like us, registrations are open for the ACCC & AER regulatory conference in Brisbane.  If you are coming up to Brisbane don’t miss our annual G+T cocktail event the night before it starts and then perhaps even stay for the conference.

 

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