On 30 May 2019, the Commission made a final rule that improves the administrative processes related to intervention compensation and settlement following market intervention. 

Market interventions include, for example, when directing a gas or diesel generator on to maintain system strength. Generators which have been directed by AEMO to provide services are paid compensation to ensure they are not out of pocket. Other participants affected by the intervention may also be compensated, for example, a generator whose output was constrained to minimise flow-on effects from the direction. Compensation is ultimately paid for by consumers. 

Final determination

The Commission published its final rule determination on 30 May 2019 and made a final rule which is largely the same as the rule proposed by AEMO.
The final rule:  

• streamlines the cost recovery process by aligning the timetables for compensation and settlement following an intervention. 
• extends the deadline for participants to make additional claims following an intervention which would allow participants more time to assess the impact of intervention events.  

The final rule improves administrative processes, increases transparency, and provides consistency and transparency to intervention compensation and settlement processes, while supporting the efficient operation of the power system.

The substantive parts of the final rule commence on 30 May 2019. Schedule 2 of the final rule commences on 1 July 2021 and adds a minor terminology change to streamline with the commencement of five-minute settlement.

Consultation paper

On 4 April 2019 the AEMC published a consultation paper seeking stakeholder input on whether:  

• the seven business day deadline for participants to calculate additional claims is too short, given directions have become more complex over the last two years
• directed participants should be given the same amount of time as affected participants to submit additional compensation claims
• the current intervention compensation and settlement timetables should be aligned. 

Submissions to the rule change request closed on 2 May 2019.

Expedited process

As this rule change request was considered non-controversial, the AEMC assessed the rule under the expedited rule making process. No objections were received in relation to the expedited process. 

Under an expedited rule making process, a final rule determination must be made within eight weeks of the initiation of the process.The key project dates were:

• Commencement of the rule change process: 4 April 2019 
• Submissions to the consultation paper  (4 weeks) closed: 2 May 2019 
• Publication of final determination: 30 May 2019 

Background

On 17 December 2018 the Australian Energy Market Operator (AEMO) submitted two rule change requests:

• Deadlines for additional compensation claims following market intervention
• Alignment of intervention compensation and settlement timetables.

These rule changes seek to adjust provisions relating to market intervention and settlements. As a result, they were consolidated into one rule change request.

Note: Schedule 2 of the National Electricity Amendment (Intervention compensation and settlement processes) Rule 2019 No. 5 will commence operation on 1 October 2021 as a result of the amendments made under the National Electricity Amendment (Delayed implementation of five minute and global settlement) Rule 2020 No. 10.