The AEMC today started consultation on rule change requests from the COAG Energy Council and the Australian Energy Council that seek to promote the development of competitive markets for new technologies which are capable of providing services in contestable and regulated markets.

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.

Both rule requests propose changes to the National Electricity Rules regarding the classification of distribution services. The classification determines which services provided by distribution network businesses are economically regulated and in what form.

In addition, the Australian Energy Council seeks to restrict distribution network businesses’ ability to earn a regulated rate of return on assets that provide network support, demand response or are located on the customer’s side of the meter. The rule change request also proposes that the threshold for the regulatory investment test for distribution businesses be reduced so that it applies to smaller projects.

A consultation paper, discussing both rule change requests, has been prepared to assist stakeholders in providing submissions on the rule change requests. Submissions are due by 9 February 2017.

The AEMC is also holding a public forum for any interested stakeholders in Sydney on 25 January 2017 to discuss the rule change requests. Expressions of interest in attending the forum can be made here.

The AEMC has also today extended the time for the making of draft rule determinations for the rule change requests to 1 September 2017. This extension is necessary given the complexity of the issues raised in the rule change requests.

Media: Prudence Anderson 0404 821 935 or DL (02) 8296 7817