On 9 November 2006, the Commission gave notice under section 102 of the NEL of the making of the final Rule determination for this proposal. The Commission confirmed its consideration that compared to the Southern Generators’ proposal, this proposal did not better meet the NEM objective and did not satisfy the Rule making test. The Commission determined not to make the proposed Rule and the reasons for the Commission’s decision are contained in the final Rule determination.

Background

The Commission received on 24 May 2006 a Rule change proposal from Snowy Hydro Limited on the Management of negative settlement residues by re-orientation. Snowy Hydro Limited also provided the Commission with two confidential attachments.

The proposal is an alternative to the Southern Generators/NEMMCO’s Rule proposal on the Management of negative settlement residues in the Snowy region.

The Commission considered the proposal under section 94 of the NEL and commenced first round consultation on the Rule proposal and the proposed National Electricity Amendment (Management of negative settlement residues by re-orientation) Rule 2006. The Commission published the notice under section 95 of the NEL of its decision to commence first round consultation on 8 June 2006 on this Rule proposal. Submissions closed on 10 July 2006.

The Commission concurrently considered five Rule change proposals and one reference for Review that relate to various aspects of network congestion management in the NEM. It was essential for this work to be co-ordinated by the Commission in order to deliver a comprehensive “Congestion Management Regime” for the market going forward. The Commission’s Congestion Management Program -  Statement of Approach (PDF) provided information and clarity about the way in which the Commission addressed the five congestion related Rule change proposals and the Congestion Management Review in an integrated manner.

Other Rule change proposals that relate to congestion management and region boundaries and the Review can be found at

• Ministerial Council for Energy proposal on the Process for Region Change
• Snowy Hydro Ltd proposal on Abolition of Snowy Region
• Macquarie Generation proposal on Alternative Snowy Region Boundary
• Southern Generators proposal on the Management of negative settlement residues in the Snowy Region
• Congestion Management Review

The Commission gave notice on 31 August 2006 under section 107 of the NEL that the period of time for the making of the draft Rule determination for this proposal had been extended by one week to 7 September 2006. The Commission was considering in its analysis of this proposal and the related proposal from the Southern Generators and NEMMCO, modelling results which it had only recently received. This consideration was difficult yet necessary to ensure a complete and comprehensive draft Rule determination was made and published. The Commission considered that it was in the interests of the public that the making of the draft Rule determination be extended by an extra week to ensure these issues were addressed. A copy of the notice can be found at the link below.

The Commission formally gave notice on 7 September 2006 under section 107 of the NEL that the time period for the making of the draft Rule determination for this proposal was extended by a further one week to 14 September 2006 in conjunction with an extension to the making of the final Rule determination for the related proposal from the Southern Generators and NEMMCO. The Commission received in the last week further submissions regarding the potential impact on reliability of supply in Victoria. The Commission considered that a further one week extension to the making of the draft determination was in the public interest as it gave interested parties the opportunity to comment and would allow the Commission to consider the submissions. The Commission requested that interested parties make submissions by 5pm, 7 September 2006.

The Commission gave notice under section 99 of the NEL on 14 September 2006 of the making of the draft Rule determination for this proposal. The Commission considered that compared with the Southern Generators’ proposal, this proposal did not better meet the NEM objective and did not satisfy the Rule making test. The Commission determined not to make the proposed Rule. The reasons for the Commission’s decision are contained in the draft Rule determination.

Requests for a hearing on the draft Rule determination were due by 21 September 2006. No requests were received.

Submissions on the draft Rule determination closed on 27 October 2006. The Commission received one submission.

On 9 November 2006, the Commission gave notice under section 102 of the NEL of the making of the final Rule determination for this proposal. The Commission confirmed its consideration that compared to the Southern Generators’ proposal, this proposal did not better meet the NEM objective and did not satisfy the Rule making test. The Commission determined not to make the proposed Rule and the reasons for the Commission’s decision are contained in the final Rule determination.