Provided more efficient dispatch of Regulation Services (Frequency Control Ancillary Services (FCAS)) in the NEM by allowing the co-optimisation of regulation and delayed services.

Background

Hydro Tasmania proposed a Rule change that seeks to provide more efficient dispatch of Regulation Services (Frequency Control Ancillary Services (FCAS)). The function of the proposal is to put in place pricing and cost recovery provisions to give NEMMCO flexibility to more efficiently dispatch FCAS. Hydro Tasmania believes that the Rule change is sufficiently minor and has requested that it be treated as non-controversial.

On 22 February 2007, the Commission published a notice under sections 95 and 96 of the NEL commencing initial consultation on a Rule proposal for Efficient Dispatch of Regulation Services and advising of its intention to expedite the Rule making process subject to written objections.

However, consideration of submissions received in the first round of consultation and the proposal’s interrelationship with the Cost Recovery of Localised Regulation Services Rule change proposal lodged by the National Generators Forum, as well as the review of FCAS currently being undertaken by NEMMCO, led the Commission to believe that the proposal should not be expedited under section 96 on the basis that it is non controversial. The Commission considered that the public interest would be better served by not expediting the Rule making process but by undertaking the standard Rule making process. The Commission also considered that a comprehensive Rule change process would allow for a more thorough consideration of the proposal in light of the current NEMMCO review of FCAS.

On 17 May 2007 the Commission published a notice under section 99 of the National Electricity Law (NEL) giving notice of the making of the draft Rule Determination for this proposal. The draft Rule Determination is substantially the same as Hydro Tasmania’s proposal, subject to some minor drafting amendments. Submissions on the Commission’s draft Rule Determination and draft Rule closed on 29 June 2007.

On 23 August 2007, the Commission published a notice under sections 102 and 103 of the National Electricity Law (NEL) making the National Electricity Amendment (Efficient Dispatch of Regulation Services) Rule 2007 No.6 and corresponding Rule determination. The Rule to be made implements the Hydro Tasmania proposal and, other than minor drafting amendments, is unchanged from the Commission’s draft Rule. The Rule commenced on 1 January 2009.

The Commission’s consideration of the Efficient Dispatch proposal was undertaken in parallel with its assessment of Cost Recovery of Localised Regulation Services Rule change proposal submitted by the National Generator’s Forum (NGF). The Commission’s final decision on the NGF proposal was published and is available on the Commission’s website.