Opportunity costs claim
Status of compensation claim: Final decision made
Overview
On 22 June 2022, the Australian Energy Market Commission (AEMC) received notification of a claim for compensation under clause 3.14.6 of the National Electricity Rules (NER) from Origin Energy Electricity Limited (Origin) following the application of the administered price cap during an administered price period in Queensland, New South Wales, South Australia, and Victoria between 12 June 2022 and 15 June 2022.
Origin is claiming compensation for opportunity costs incurred in operating Uranquinty Power Station Units 11-14 (NSW), Quarantine Power Station Unit 5 (South Australia), and Mortlake Power Station Units 11 and 12 (Victoria) during the administered price period.
Origin provided initial information in support of its claim on 6 September 2023.
Commencement of formal assessment
On 16 May 2024, the AEMC formally commenced assessment of the opportunity costs claim made by Origin under clause 3.14.6 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.
Consultation
In accordance with the NER, the AEMC published its draft opportunity cost methodology on 27 June 2024 for Origin’s opportunity costs claim. The AEMC concurrently assessed compensation claims for both EA Ecogen and Origin, 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 25 July 2024.The AEMC received one submission, which is published below, as well as confidential supplementary information from Origin.
In accordance with the NER clause 3.14.6(r), the AEMC is required to consult with the claimant before making its final decision. In satisfying this requirement, the AEMC provided a draft decision to Origin on 15 August 2024. The draft decision is not published as it is intended to facilitate consultation between the claimant and the AEMC only.
Final decision
On 12 September 2024, the AEMC published its final decision regarding Origin’s compensation claim for opportunity costs incurred during the 14 June and 15 June 2022 trading days.
For more information, see the final decision document published below.
Note: Origin requested confidentiality for specific elements of its compensation claim, asserting that the information is commercially sensitive. In accordance with that claim, the published decision document redacts the confidential information to protect those interests while maintaining transparency to the extent possible
Direct costs claim
Status of compensation claim: Final decision made
On 22 June 2022, the Australian Energy Market Commission (AEMC) received notification of a claim for compensation under clause 3.14.6 of the National Electricity Rules (NER) from Origin Energy Electricity Limited (Origin) following the application of the administered price cap during an administered price period in Queensland, New South Wales, Victoria and South Australia between 12 June 2022 and 22 June 2022.
Origin is claiming compensation for direct costs only incurred in operating Roma Power Station and Mt Stuart Power Station during the administered price period.
Origin provided information in support of its claim on 4 August 2022.
Commencement of formal assessment
On 15 September 2022, the AEMC commenced formal assessment of the direct cost claim made by Origin under clause 3.14.6 of the NER.
Under the NER, the AEMC has 45 business days to make a final decision in relation to this claim. The statutory notice of commencement is published below.
The AEMC extended the timeframe for making a final decision on Origin's direct cost claim until 15 December 2022 due to the complexity of assessing the claim. The statutory notice of extension is published below.
Final decision for direct cost compensation
On 15 December 2022, the Commission published its final decision stating that Origin is entitled to compensation in respect of its compensation claim for direct costs following the application of the administered price cap during an administered price period in Queensland, New South Wales, Victoria and South Australia in June 2022. The amount of compensation that Origin is entitled to is $1,232,024.
For more information, see the final decision document published below.
Note: Origin 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.