Rule Changes: Open

Contestability of energy services

Reference:
ERC0206
Stage:
Consultation on Draft Determination
Proponents:
COAG Energy Council
Project Leader:
Ben Davis
Date initiated:
15-Dec-2016
Overview

On 29 August 2017, the AEMC published a draft rule and draft determination on the Contestability of energy services rule change requests. Submissions to the draft determination are due by 31 October 2017.

On 29 August 2017, the AEMC published a draft rule and draft determination on the Contestability of energy services rule change requests. Submissions to the draft determination are due by 31 October 2017.

The AEMC held a public forum on 27 September 2017 to allow stakeholders to provide feedback to the Commission regarding the draft rule and draft determination. Presentations made at the public forum are available below. 

The Commission did not release draft savings and transitional rules with the draft determination on 29 August 2017. The Commission published a consultation paper on 19 September 2017 setting out draft savings and transitional rules.

Note: the s. 99 statutory notice published on 29 August 2017 stated that submissions to the draft determination were due by 10 October 2017. This was an error, submissions are due by 31 October 2017.

Overview of the draft rule

The draft rule, which is a more preferable rule, contains the following key features:

  • Introduces restrictions on DNSPs earning a regulated return on assets located “behind the meter”
  • Introduces provisions that improve the distribution service classification framework’s ability to respond to technology changes
  • Introduces a requirement for the AER to develop and publish guidelines that set out the AER’s approach to classifying distribution service.

Background

Technology, and the increased choices it offers consumers, is changing the energy sector. In particular, technologies such as battery storage – which are able to provide multiple services – make it more difficult to draw the line between what is economically regulated and what is provided by contestable markets.

Against this backdrop of change, the Council of Australian Government Energy Council and the Australian Energy Council – an industry body representing generators and retailers – submitted rule change requests seeking to facilitate competition in the emerging energy services market as well as improving clarity and transparency of the distribution service classification framework.

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Documentation