Overview 

On 19 May 2022, the AEMC made a final rule that introduces a principles-based reporting framework for the Australian Energy Regulator (AER) to report on significant price outcomes. The final rule comes into effect on 29 September 2022.

The final rule amends clause 3.13.7 of the National Electricity Rules (NER) by replacing the prescriptive reporting requirements relating to significant variations between forecast and actual spot prices, and spot prices or ancillary service prices above $5,000/MWh or $5,000/MW. 

The new principles-based framework requires the AER to:

• Report on significant price outcomes in the spot market (includes ancillary services markets).
• Outline criteria for determining significant price outcomes in a new Significant price reporting guideline, having regard to high price events and any other matter considered appropriate.
• Report on the contributing factors to significant price outcomes, including available capacity, network availability and offer, bidding and rebidding behaviour, with the flexibility to include any other relevant factors.
• Publish a single report in a timely manner that collates significant price outcomes for each calendar quarter, with the flexibility to issue more frequent standalone reports for particularly significant price events.

The Commission is satisfied that the final rule will, or is likely to, contribute to the achievement of the national electricity objective (NEO) for the following reasons:

• Expanding the scope of the AER to report on a wider range of more relevant significant price outcomes will increase information transparency for policymakers, market participants and energy users.
• Enabling the AER to determine and amend significant price criteria in a new guideline will increase the usefulness and relevancy of reports as they will accommodate a range of market, technological, policy and other changes.
• Regulatory burden will be reduced by improving resource efficiency through targeted reporting on more relevant price outcomes and factors, with the ability to collate price events into a single quarterly report.

Consultation process

On 24 March 2022 the AEMC published a consultation paper. We received three submissions which can be found below.

The Commission adopted an expedited process in assessing this non-controversial rule change request. No objections to using this process were received.

Rule change request

On 21 December 2021 the AEMC received a rule change request from the AER proposing to replace the prescriptive reporting requirements under clause 3.13.7 of the NER with a new principles-based reporting framework for significant price outcomes.