The AEMC today has made a final rule to improve and streamline administrative processes related to compensation and settlement, following an AEMO intervention in the market.

An example of an intervention could be when AEMO directs a gas or diesel generator to switch on in order to maintain system strength. 

Generators which have been directed by AEMO to provide services are paid compensation to ensure they are not out of pocket. Other participants affected by the intervention may also be compensated, for example, a generator whose output was constrained to minimise flow-on effects from the direction. Compensation is ultimately paid for by consumers. 

This new rule aligns the timetables for intervention compensation and settlement following an intervention, thereby streamlining the process used for recovering associated costs. It also extends the deadline for participants to make additional claims following an intervention, which will allow participants more time to assess the impact of intervention events.  

The final rule increases transparency and consistency of the processes that AEMO need to administer following a market intervention.

The rule change request was submitted as two separate rule change proposals, which were consolidated and considered as one proposal. As the rule change request was considered non-controversial, the AEMC followed an expedited rule making process. The substantive parts of the final rule start today.

While this rule change request only examined administrative changes to the compensation and settlement framework, the Commission is continuing to examine larger questions about interventions, including the underlying issues behind interventions, through its Investigation into intervention mechanisms and system strength in the NEM. 

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817