On 8 July 2024, the Australian Energy Market Commission (AEMC) received a rule change request from the Chair of the Energy Senior Officials and the Victorian Minister for Energy and Resources (the proponents) to amend the National Gas Rules (NGR). The rule change  requested the implementation of a reliability standard and related reliability tools for East Coast Gas System (ECGS).

On 20 March 2025, the AEMC initiated consultation on the rule change request.

The AEMC is seeking stakeholder feedback on building a reliability standard for the ECGS and updating associated market settings for facilitated gas markets

The Australian Energy Market Operator (AEMO) (in its 2024 GSOO) and the Australian Competition and Consumer Commission (ACCC) forecast annual and peak day gas shortfalls in the ECGS southern regions from 2026. These forecasts were made assuming gas flows from the north (Queensland) to the south (Victoria) of the ECGS.

The proponents have identified that, given these forecast shortfalls, there is increasing risk of market participants and AEMO making less efficient trade-offs between the cost of providing a reliable supply of gas and the costs associated with supply disruption.

To mitigate such risks, the request proposes to build a reliability standard for the ECGS and to update the existing market setting arrangements for both the Short-Term Trading Market (STTM) and the Victorian Declared Wholesale Gas Market (DWGM).

The proposed reliability standard is intended to support monitoring and objective identification of risks and threats to the reliability and supply adequacy in the ECGS, support the communication of those risks through a threat signalling mechanism, and guide AEMO's supplier of last resort function (as proposed in a related rule change request).

We seek stakeholder feedback on whether the proposed reliability standard and related tools will effectively address the issues raised by the proponents. We also included questions on other components of the rule change request, such as the proposed new ‘value of gas customer reliability’ (VGCR) that would inform the level of the standard, the review of market settings in the STTM and DWGM; and the proposed alignment of the Gas Statement of Opportunities (GSOO) and the Victorian Gas Planning Report (VGPR) with the reliability standard.  

Background

This rule change request is the first of four rule change requests that seek to improve the reliability and supply adequacy (RSA) of the ECGS.  

If the proposed changes are made, the reforms from the four rule change requests would build the second stage of an RSA framework, complementing the first stage changes to the NGR applied to the ECGS (stage 1).

The stage 1 changes became effective in May 2023 and expanded AEMO’s powers under the National Gas Law (NGL) to better manage gas supply adequacy and reliability risks in the ECGS from 2023.  

We included comprehensive information on stage 1 RSA reforms and an overview of the stage 2 rule change requests in our background paper, published alongside our consultation paper. The background paper also includes information on relevant features of the ECGS and the gas markets, as well as a description of the key components of the existing NEM reliability standard.  

Next steps 

Our consultation paper seeks stakeholder feedback on the rule change request by 17 April 2025.

We will host an online forum for stakeholders on 27 March 2025.

After considering feedback, we intend to issue a Directions Paper in mid-2025, which will set out some of the Commission's early views on the proposed request and any other alternative options and seek further stakeholder feedback.  

Given the complex and difficult issues raised in the rule change request, the Commission has extended the period of time for making its draft determination to 29 January 2026, and the period of time for making its final determination to 25 June 2026.