The Australian Energy Market Commission has decided to make a Rule in response to the Reliability Panel's Rule change request regarding Reliability Settings to apply from 1 July 2012. Amongst other things, it establishes a process of indexation to preserve the real values of the market price cap and the cumulative price threshold over time.

On 16 June 2011 the Australian Energy Market Commission (Commission) gave notice under sections 102 and 103 of the NEL relating to the making of the National Electricity Amendment (Reliability Settings from 1 July 2012) Rule 2011 No. 5 and related final determination.

The Commission's decision was to make a more preferable Rule, which differs from the proposed Rule. The reasons for the Commission's decision are set out in detail in its final Rule determination.

The Rule as Made incorporates many of the features proposed in the Rule change request, in particular the introduction of a mechanism to index the market price cap (MPC) and cumulative price threshold (CPT). However, it adopts the Consumer Price Index (CPI) rather than the proposed Intermediate (stage 2) Producer Price Index (Stage 2 PPI), and includes a requirement for a four-yearly comprehensive review of the Reliability Standard and Settings, including indexation, to be undertaken by the Reliability Panel. This will replace the previous requirement of a two-yearly review of the Reliability Standard and Settings.

The Rule as Made will commence on 1 July 2011. Indexation will commence on 1 July 2012, with the first four-yearly comprehensive review to be completed by 30 April 2014.