On 27 July 2010 the Commission published its Stage 1 final report on the Review into the role of hedging contracts in the existing NEM prudential framework. The Commission has also provided the final report to the MCE.  In summary, the Commission has recommended that:

• existing and proposed reallocation offset arrangements be continued with some enhancements through changes to the Rules and AEMO's procedures and that an appropriate prudential margin be maintained where load is offset by internal generation;
• FOAs be integrated in the NEM prudential framework, subject to AEMO establishing an appropriate prudential margin and undertaking further assessment of benefits and impact on the prudential quality of the NEM following its broader review of the NEM prudential framework; and
• AEMO investigate options to improve the MCL methodology as part of its review of the prudential framework.

Subject to a policy response from the MCE, Stage 2 of the project will involve development of the Rules to implement the recommendations in the Stage 1 report.