Rule Change: Open

Overview

On 4 August 2022, the Australian Energy Market Commission (AEMC) published a draft determination and a more preferable draft rule that clarifies both the ability of the Australian Energy Regulator (AER) to establish a revenue determination for an Intending Transmission Network Service Provider (TNSP) and the process for doing so, in response to a rule change request submitted by Marinus Link Pty Ltd (MLPL). 
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On 4 August 2022, the Australian Energy Market Commission (AEMC) published a draft determination and a more preferable draft rule that clarifies both the ability of the Australian Energy Regulator (AER) to establish a revenue determination for an Intending Transmission Network Service Provider (TNSP) and the process for doing so, in response to a rule change request submitted by Marinus Link Pty Ltd (MLPL). 

Under the draft rule, an Intending TNSP is defined as a registered participant who intends to provide prescribed transmission services. This includes both: 

  • a person registered as an Intending Participant intending to construct a new regulated transmission project, and  
  • any existing Market Network Service Provider (MNSP) that intends to re-classify its network services as prescribed transmission services to become a TNSP. 

The draft rule supports timely and efficient investment in electricity transmission infrastructure 

Our draft rule clarifies that a revenue determination can be established for Intending TNSPs. This provides regulatory certainty, reducing the risk of delays to investment decisions on major transmission projects. The draft rule benefits consumers by supporting timely and efficient investment in electricity transmission infrastructure to enable the transition of the NEM. 

Our more preferable rule 

The Commission considers that under the current Rules, the AER has the ability to make revenue determinations for Intending TNSPs. While the AER has this ability, there are regulatory gaps in making revenue determinations for Intending TNSPs that need to be clarified. Our more preferable draft rule addresses these regulatory gaps. 

Our draft rule aligns with the general intent of MLPL’s proposal. Our draft rule is a more preferable rule as it: 

  • does not broadly apply all of Chapter 6A to Intending TNSPs as proposed by MLPL because the issue being addressed in this rule change request is to establish a revenue determination for an Intending TNSP while Chapter 6A contains provisions dealing with the broader economic framework,  
  • makes other amendments to Chapter 6A to address gaps in the current framework to clarify how a revenue determination can be established for an Intending TNSP. 

The Commission intends to hold a workshop on 18 August 2022. Please register here for this workshop.  

Stakeholders are invited to make written submissions on the draft rule by 15 September 2022

We propose that the draft rule be implemented on 3 November 2022, one week after the publication of our final determination for this rule change. 

Marinus Link Pty Ltd’s rule change request 

On 3 March 2022, Marinus Link Pty Ltd submitted a rule change request that sought to address the following issues that it claimed were a barrier to enabling MLPL’s final investment decision for Project Marinus. 

  • While a TNSP that has completed a RIT-T process for an actionable Integrated System Plan (ISP) project can submit a contingent project application (CPA), the CPA does not apply for Intending TNSPs who do not have a revenue determination. 
  • To obtain a revenue determination under the current National Electricity Rules (NER), a participant must be registered as a TNSP (not be an Intending TNSP) and already provide prescribed transmission services. MLPL considered that the AER does not have the power to make a revenue determination for an Intending TNSP that is not yet providing prescribed transmission services. 

To address these issues, MLPL proposed to amend Chapter 6A of the NER to allow the AER to establish a revenue determination for an Intending TNSP. Stakeholders generally supported MLPL’s rule change request, but raised some issues with it. 

Issues such as cost allocation related to Project Marinus or other regulated transmission assets in Commonwealth waters are out of scope of MLPL’s rule change request. Reviewing the current cost allocation approach and suitability of those arrangements for inter-regional transmission is a current priority for the Energy National Cabinet Reform Committee. 

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