Status of compensation claim: Final decision made.
Overview
On 30 June 2022, Sunset Power International Pty Ltd (trading as Delta Electricity) (Delta) submitted a claim for compensation to the Australian Energy Market Commission (AEMC) under clause 3.14.6 of the National Electricity Rules (NER).
The claim pertains to the administered price period between 12 June 2022 and 23 June 2022, during which time the administered price cap was applied in Queensland, New South Wales, South Australia, and Victoria.
Delta's compensation claim is limited to opportunity costs incurred in operating the Vales Point power station during the administered price period.
Delta provided initial supporting information for is claim on 6 December 2022. Since then, it has submitted additional documentation, including responses to information requests from the AEMC.
Commencement of formal assessment
On 8 June 2023, the AEMC formally commenced an assessment of Delta's opportunity cost claim under clause 3.14.6(k) of the NER. The statutory notice of commencement is published below.
Under the NER, the AEMC has:
- 35 business days to publish the claimant’s proposed methodology for determining its opportunity costs, the draft opportunity cost methodology the AEMC proposes to use in determining those costs, and an invitation for written submissions to be made to the AEMC on the draft opportunity cost methodology.
- 35 business days after submissions close the AEMC to publish its final decision on the methodology for determining the claimant’s opportunity costs, whether compensation should be paid by AEMO in relation to the claim, and if so, the amount of compensation that should be paid.
On 30 November 2023 and 7 February 2024, the AEMC extended the timeframe for publishing the final decision, under clause 3.14.6(t) of the NER due to the complexity of the claim. The statutory notices for extension are published below.
Consultation
In accordance with the NER, the AEMC published its draft opportunity cost methodology on 14 September 2023 for Delta’s opportunity costs claim. The AEMC concurrently assessed compensation claims for both Delta and Snowy Hydro Limited, and the draft opportunity cost methodology addresses both claims.
The AEMC invited stakeholders to submit their feedback on the draft opportunity cost methodology. Submissions closed on 13 October 2023. The AEMC received three submissions related to Delta’s claim, which are published below.
In accordance with the NER 3.14.6(m), the AEMC is required to consult with the claimant before making its final decision. In satisfying this requirement, on 13 December 2023 the AEMC provided a draft decision to Delta. We received a submission from Delta on our draft decision on 18 January 2024. The draft decision is not published as it is used to support consultation between the claimant and the AEMC only.
Final decision
On 16 May 2024, the AEMC published its final decision regarding Delta Electricity's compensation claim under clause 3.14.6 of the National Electricity Rules (NER). The claim sought compensation for opportunity costs incurred during the administered price period between 12 June 2022 and 23 June 2022, when the administered price cap was applied in Queensland, New South Wales, South Australia, and Victoria.
The Commission determined that Delta Electricity is not eligible for compensation. For more information, see the final decision document published below.
Note: Delta made a claim for confidentiality in respect of specific elements of its claim. The basis for seeking confidentiality is that the information is commercially sensitive. The decision document, therefore, redacts this confidential information.