The Australian Energy Market Commission has published a final rule to increase clarity, consistency, administrative efficiency and transparency in the framework for the granting of prudent discounts on electricity transmission network charges in Victoria. 

The more preferable final rule addresses concerns raised by both the rule change proponent and stakeholders.

The final rule does this by making changes to the obligations governing both the Australian Energy Market Operator (AEMO) as the transmission network service provider, and the declared transmission service operators (DTSOs) which own and operate transmission network assets in Victoria.

Victoria is considered an “adoptive jurisdiction”, meaning AEMO’s declared network functions apply, including entering into agreements with DTSOs to provide transmission services. The prudent discount framework allows certain transmission customers to apply for reduced charges where this would avoid them inefficiently by-passing the transmission network. 

Under the final rule:

  • AEMO would no longer need a relevant DTSO’s consent to agree to provide a prudent discount.
  • AEMO and the relevant DTSO would no longer be required to negotiate on prudent discount proposals in good faith with each other.
  • the relevant DTSO would need to provide any information that AEMO reasonably requires to consider a prudent discount request.
  • AEMO would need to apply to the Australian Energy Regulator for cost-recovery approval for a prudent discount that AEMO either has agreed to provide or has proposed to agree to provide. This obligation would apply if AEMO sought to recover most of or the entire value of that discount from other customers.

The rule change request was submitted by the Honourable Lily D'Ambrosio MP, Minister for Energy, Environment and Climate Change, Minister for Solar Homes, who requested that the rule change proceed under an expedited process.

Media: Kellie Bissett, Media and Content Manager, 0438 490 041