On 15 March 2012, the AEMC gave notice under sections 102 and 103 of the National Electricity Law of the making of the “Expiry of Reliability and Emergency Reserve Trader” final rule and final rule determination.

The Commission’s final rule postpones the expiry of the RERT for four years until 30 June 2016. The final rule also removes the need for the Reliability Panel to review the RERT a year prior to its expiry.

Background

The Reliability Panel submitted the rule change request on 1 July 2011. It sought to postpone the expiry of the RERT by one year, from 30 June 2012 to 30 June 2013 as a transitional measure and allow the RERT to expire from the NER on 30 June 2013. It also sought to remove from the NER the requirement for a Reliability Panel initiated review of the RERT mechanism.

The rule change request required two amendments to the NER. To postpone the expiry date of the RERT required an amendment to clause 3.20.1, which contained the sunset date of the RERT. Subsequently, removing the obligation on the Reliability Panel to review the RERT mechanism required the deletion of clause 3.20.9 from the NER.

The proponent's rationale for the rule change was that the market has performed adequately and sufficient supply had been achieved without the RERT, even during times of uncertainty in the market, therefore it is no longer required. However, the proponent considered that the expiry date should be extended by one year to allow those that would be affected adequate notice of the change.

The proponent initially requested that its rule change request be fast-tracked owing to the substantial consultation undertaken by the Reliability Panel. However, the AEMC considered that the Australian Government's proposed carbon price legislation was a sufficient policy change since consultation was undertaken, therefore it followed the standard rule making process.