Market Review: Open

Overview

In August 2021, Energy Ministers tasked the AEMC with a review of the National Gas Rules (NGR) and National Energy Retail Rules (NERR) in order to develop initial rules that will extend the regulatory frameworks to include hydrogen blends and renewable gases.
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In August 2021, Energy Ministers tasked the AEMC with a review of the National Gas Rules (NGR) and National Energy Retail Rules (NERR) in order to develop initial rules that will extend the regulatory frameworks to include hydrogen blends and renewable gases. 

Purpose and approach of the review

The purpose of the AEMC's review is to:

  1. Identify potential issues in the NGR and NERR that could emerge if natural gas equivalents are permitted to be supplied through natural gas distribution pipelines.
  2. Develop draft initial rules to address these issues through a consultative process.
  3. Inform jurisdictional officials of any National Gas Law (NGL) and National Energy Retail Law (NERL) changes that the AEMC considers should be made to achieve the objective of the Energy Ministers. 

The AEMC was also asked to prioritise the changes that need to be made, and whether any amendments could be deferred. The purpose of this prioritisation advice was to assist the Energy Ministers in meeting the expedited time frame that has been set for these reforms.

The AEMC has also concurrently undertaken a rule change process focused on including distribution connected facilities in the Victorian declared wholesale gas market (DWGM). The final determination responding to this request was published on 8 September 2022. More information on the rule change can be found on the project page.

The final report

This review focused on the necessary changes to the NGR and NERR that will support and implement the changes to the relevant laws recommended by jurisdictional officials. 

In doing so, the AEMC sought to identify changes to the existing regulatory frameworks that are consistent with achieving the energy objectives and supporting emissions reduction in the gas sector. 

The AEMC’s key final recommendations:

  • Enable access to pipelines and support investment by extending the economic regulatory framework.
  • Support competition through improvements to the ring fencing framework.
  • Extend the market transparency mechanisms to enable informed and efficient decision making.
  • Streamline operational arrangements for the STTM.
  • Adapt the Victorian DWGM.
  • Allow new services and commodities in the retail gas markets.
  • Enable consumers to be informed about a change in the type of gas supplied.
  • Retain the draft regulatory sandbox rules in their current form as these draft rules.

Next steps 

This final report is accompanied by recommended draft rule changes for the NGR and NERR. Under the review’s terms of reference, the AEMC is responsible for public consultation on this rule drafting.

Written submissions on the rule drafting should be lodged with the AEMC by COB Thursday 13 October 2022.

Final initial draft rules will be provided to Energy Ministers in November 2022.

The draft report

On 31 March 2022 the Commission published a draft report for consultation. This report set out the Commission’s draft recommendations for changes to the NGR and NERR that would support their extension to other covered gases, and natural gas equivalents supplied to consumers.

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Documentation

PENDING

Proposal document