The rules and the AEMC Compensation Guidelines set out a process for market participants to claim compensation for any losses during administered pricing periods. The Guidelines set out standard timeframes, however, it will be a priority for the AEMC to process these claims as quickly as possible, as we understand the cash flow pressure businesses are facing. To lodge a claim please read the AEMC compensation guidelines and email to begin the process.

What triggers an administered pricing period?

An administered price period occurs when the rolling seven-day average of wholesale spot prices breaches the cumulative prices threshold (CPT). The CPT is now based on five-minute prices and is set at $1,359,100, which is the equivalent of the spot price being set at the MPC of $15,100/MWh, continuously, for 7.5 hours.

If an administered pricing period occurs, who can make a claim for compensation and why?

Eligible parties are scheduled generators, non-scheduled generators, scheduled network service providers, scheduled loads, ancillary service providers and demand response service providers.

These parties can claim compensation if they provided energy or other services during an administered price period and incurred a net loss. That is, their direct and/or opportunity costs exceeded their total revenue from the spot market over an entire “eligibility period” (the point in time on the day from when administered pricing starts, until the end of that trading day).

If a party decides to make a claim, what are the steps in the process and what is required from the claimant and the AEMC?

Step One: The claimant must notify the AEMO and the AEMC in writing that it is making a claim within five business days of the end of the administered price event.

Step Two: After receiving the notification to make a claim, the AEMC will publish a notice of receipt. The AEMC will then seek information from the claimant that we consider is reasonable to enable assessment of the claim. If the claim includes opportunity costs this means asking for the methodology used to determine its opportunity costs.

Step Three: The claimant subsequently provides substantiation. The onus is on the claimant to provide evidence and justification. There is no set time period for this step.

Step Four: The AEMC will commence formal assessment as soon as practicable after receiving sufficient information from the claimant. A notice will be published that formal assessment has started.

Step Five: The claimant will be notified of the outcome as soon as practical, noting that the compensation processes differ depending on whether the claimant is seeking direct costs only, or also opportunity costs.


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CONTACT: Georgina Kentwell ׀ AEMC ׀ 0411043964