On 8 August 2019 the AEMC made a final rule to amend nine areas of the National Electricity Rules (NER) to help implement five minute settlement and global settlement. 

The final rule improves wholesale market operations under five minute settlement, clarifies global settlement arrangements and improves information provision requirements. 

The final rule 

In relation to the operation of the wholesale market under five minute settlement, the rule:

• Provides AEMO with the flexibility to calculate Marginal Loss Factors using either 30 minute or shorter resolution data.
• Allows AEMO to accommodate fast-start inflexibility profiles in pre-dispatch.
• Removes the requirement for the Reliability Standard and Settings Guidelines to be amended as part of the transitional arrangements for five minute settlement.

Regarding global settlement, the rule:

• Clarifies that non-contestable unmetered loads are to be assigned to the Transmission Node Identified (TNI) or Virtual Transmission Node (VTN) that is most appropriate, as opposed to the same (single) TNI/VTN.
• Clarifies that no retailer has financial responsibility at a transmission / distribution boundary point.
• Clarifies that all customer loads are market loads.
• Clarifies that Unaccounted for energy (UFE) will not be allocated to distribution-connected generators.

Regarding information provision, the rule:

• Removes the requirement on AEMO to run a Rules Consultation process when amending the Spot market operations timetable for minor or administrative changes.
• Amends the period during which metering data providers must send AEMO data, for publishing information for market customers on their potential UFE financial liability before global settlement commences.

The final rule is in response to a rule change request submitted by AEMO. The final rule is generally consistent with AEMO’s rule change request, but varies in some minor aspects.

Commencement of the rule

The final rule commences on:

• 12 August 2019 for amendments to the spot market operations timetable and amendments to transitional arrangements in the NER relating to the Five minute settlement and Global settlement and market reconciliation rules.
• 1 July 2021 for amendments to the NER that relate to commencement of the Five minute settlement rule.
• 6 February 2022 for amendments to the NER that relate to the commencement of the Global settlement and market reconciliation rule.

The rule change request

On 15 March 2019 the AEMC received a rule change request from AEMO relating to the implementation of the Five minute settlement and Global settlement and market reconciliation (Global settlement) rules. The rule change sought to amend six areas of the NER. 

On 13 May 2019 the AEMC received an addendum to the Five minute settlement and global settlement implementation amendments rule change request from AEMO. The addendum identified three further areas of the NER that AEMO sought to have amended as part of the rule change request. The AEMC assessed all nine proposed amendments as part of the same (single) rule change request. 

Expedited rule making process

The rule change request was considered non-controversial and the AEMC followed an expedited rule making process. No objections to the expedited process were received.

The AEMC received six stakeholder submissions to the rule change request. 

Background on Five minute settlement rule and Global settlement rule

Information on the Five minute settlement rule and Global settlement rule are available on the AEMC’s website below:

https://www.aemc.gov.au/rule-changes/five-minute-settlement
https://www.aemc.gov.au/rule-changes/global-settlement-and-market-reconciliation

Note, as a result of the amendments made under the National Electricity Amendment (Delayed implementation of five minute and global settlement) Rule 2020 No. 10:

- Schedule 2 of the National Electricity Amendment (Five minute settlement and global settlement implementation amendments) Rule 2019 No. 7 will commence operation on 1 October 2021;
- Schedules 3 to 5 of the National Electricity Amendment (Five minute settlement and global settlement implementation amendments) Rule 2019 No. 7 will commence operation on 1 May 2022.