Rule Change: Completed
Overview
On 16 May 2024, the Australian Energy Market Commission (AEMC) made a more preferable final rule that expands the transmission ring-fencing framework to include negotiated transmission services.
The final rule commences on 23 May 2024.
The final rule addresses a gap in the scope of the Australian Energy Regulator’s (AER’s) Transmission Ring-Fencing Guidelines (the Guidelines). This has prevented the AER from addressing the risk of discriminatory conduct associated with the provision of negotiated transmission services.
The final rule:
- Empowers the AER to specify obligations on TNSPs to ring-fence their provision of negotiated transmission services from non-regulated transmission services under its Guidelines.
- Clarifies that the AER has flexibility when deciding whether to specify any obligations that would apply to negotiated transmission services.
- Provides the AER with flexibility to determine the categories of negotiated transmission services to which obligations will apply.
- Requires the AER to amend and publish its updated Guidelines within nine months of the rule commencement date.
The final rule seeks to improve the effectiveness of competition in the market for contestable transmission services, and thereby improve the efficiency of the connection process in the long-term interests of consumers.
The Commission has made one change from the draft to final rule in terms of reducing the implementation timeframe from twelve to nine months, reflecting stakeholder views about the urgent and critical nature of the issue.
Background
On 18 July 2023, the AEMC received a rule change request from the AER to amend the National Electricity Rules (NER) to expand the transmission ring-fencing framework to include negotiated transmission services.
The AEMC progressed this rule change under a fast-track rule making process based on the previous consultation undertaken by the AER on the nature and content of its proposal.