On 1 December 2016 the AEMC made a final rule that clarifies the Australian Energy Market Operator’s (AEMO) discretion to suspend market participants from trading in the National Electricity Market (NEM).

The final rule provides a clearer decision-making framework that AEMO must apply when exercising its discretion on whether to suspend a market participant. The final rule provides AEMO with the discretion not to suspend a market participant under external administration provided that:

• the external administrator has requested or consented to the non-suspension decision and has undertaken that the defaulting market participant will meet its relevant liabilities under the NER; and
• AEMO has taken into account the following matters:
  • whether the market participant is likely to comply with the NER;
  • for a market generator, market network service provider or a market small generation aggregator, the potential benefit of the non-suspension on reliability in the NEM outweigh the risk of removing the market participant from the market;
  • for a market participant other than the types listed above, the potential impact of the suspension on reliability in the NEM if AEMO considers this matter to be relevant; and
  • any other matters AEMO considers relevant to the decision.

Should AEMO decide not to suspend a market participant under external administration, the final rule permits AEMO to impose conditions on the market participant in connection with the non-suspension decision, and requires the affected market participant to comply with any conditions imposed. In addition, the final rule requires AEMO to publish a ‘non-suspension notice’ if it decides not to suspend a market participant under external administration.