On 4 August 2022, the Australian Energy Market Commission (AEMC) made: 

• a more preferable final rule in the National Electricity Rules (NER) and 
• AEMO’s proposed rule for the National Gas Rules (NGR).

Final rule

The changes to the rules promote good regulatory practice, greater transparency, and flexible, fit-for-purpose consultation on subordinate instruments.

Key elements of the final electricity rule are:

• A new expedited process in the NER - for non-material changes. The rule introduces a new short 10-week consultation process for new and existing subordinate instruments that are unlikely to significantly impact on the national electricity market or have a significant effect on the activities of the registered participants. 
• A short new process for minor and administrative instrument changes. A new quicker and simpler process for minor and administrative instrument changes that requires two weeks consultation and the publication of a final instrument, any received comments, and reasons for making the final instrument, as soon as practicable after consultation closes. 
• Two round of consultation and revised timelines. Consultation on all material instrument changes will be according to the standard rules consultation procedures, which require two rounds of consultation. This will require a minimum of four weeks for each round of consultation and then, after consultation has closed on each round, a maximum ten-week period at the draft and final stages to finalise and publish the instruments. 
• Flexibility for when complex issues arise. Consulting parties can choose, and stakeholders can request, to switch from the expedited process to the standard process, if stakeholders consider the proposed amendments may impact the NEM, or complex issues arise. Consulting parties can also extend publication deadlines for the standard process if the matter involves issues that are unusually complex or difficult or there has been a material change in circumstances.
• Revised provisions for individual meetings. Stakeholders can request meetings at anytime within a consultation period, to discuss complex, sensitive or confidential matters. If a meeting is requested, the consulting party must either: meet with the stakeholder within a reasonable time, address the matter using a different method of consultation (such as a workshop), or explain why it is not reasonably practicable to hold the meeting or another mode of consultation. 

The Standard consultative procedures replace the Extended consultative procedures in the NGR. Where the NGR currently prescribes the use of the Extended consultative procedures, consulting parties will instead be directed to consult according to the Standard consultative procedures, which provide a flexible two-round process. 

No changes were required to the Retail consultation procedures in the National Energy Retail Rules (NERR).

The Commission has determined that the electricity and gas amending rules will commence on 4 August 2022. The changes to the consultation procedures will not affect any consultation processes that are underway before this date. 

Background

The NER, the NGR and the NERR require many matters to be specified in guidelines, procedures, methodologies and reports (called ‘subordinate instruments’). The Australian Energy Regulator (AER), AEMO, the Reliability Panel and the Information Exchange Committee, amongst others, are responsible for developing and amending these documents.

The most common consultation process in the NER is the Rules consultation procedures, which require two rounds of consultation. These apply to approximately 70 different instruments. 

The rule change request and addendum
On 7 January 2021, AEMO submitted a rule change request that aimed to ensure that consultation processes on subordinate instruments were flexible and fit-for-purpose.

AEMO proposed aligning the Rules consultation procedures with the Transmission and Distribution consultation procedures, which require one round of consultation (and removing these processes). AEMO also proposed that the Extended Consultative Procedures under the NGR should be simplified. 

AEMO also provided a rule change addendum that provided additional clarification and broadened the rule change’s scope to the Reliability Panel’s consultation process.

The Commission published a consultation paper on 16 December 2021. Submissions closed on 3 February 2022. The Commission received 24 submissions, which can be under the ‘Initiation’ tab on this page.

The draft determination
On 14 April 2022, the Australian Energy Market Commission (AEMC) made a more preferable draft rule that amends the National Electricity Rules (NER) and made the Australian Energy Market Operator’s (AEMO) proposed change to the National Gas Rules (NGR).

Submissions to the draft determination and draft rules closed on 26 May 2022. The Commission received 15 submissions, (plus a supplementary submission from Snowy Hydro), which can be viewed under the ‘Draft’ tab on this page.