The Rule extends the sunset date for the National Electricity Amendment (Negative Inter-Regional Settlements Residue) Rule 2006 by one year to 30 June 2010. This avoids inefficiencies that would arise from reverting to the old recovery mechanism of auction fees before the Commission makes a determination on whether to make the MCE's proposed National Electricity Amendment (Negative Inter-regional Settlement Residue Amounts) Rule 2009. This promotes clarity, certainty and a smooth trasition between the current and any alternative inter-regional settlement residue recovery method.

Background

On 23 February 2009, the Commission received a Rule change proposal from NEMMCO.

The Rule change proposal sought to extend the sunset date applicable to the current mechanism for recovery of negative settlement residue from 30 June 2009 to 30 June 2010 in order to:

• provide participants with certainty that the mechanism for recovery of negative settlement residue would not revert to the approach that applied prior to July 2006; and
• to allow time for a managed transition to the new arrangements proposed by the Commission as an outcome of its Congestion Management Review (CMR).

The extension of the sunset date of the current negative settlement residue Rule was to be an interim measure to apply until replaced by an alternative inter-regional settlements residue recovery method.  The Commission has made a draft Rule determination regarding the proposed National Electricity Amendment (Negative Inter-regional Settlements Residue Amounts) Rule 2009 (one of the recommended Rule changes in the CMR package that is currently being assessed by the Commission)

On 5 March 2009, the Commission published a notice under sections 95 and 96 of the NEL commencing first round consultation on this Rule change proposal and advising of its intention to expedite the Rule process on the ground that it is non-controversial, subject to the receipt of written objections. The Commission was of the view that the proposed Rule was unlikely to have a significant effect on the National Electricity Market as the proposed Rule proposes to extend the existing arrangements as a transitional measure.

In relation to the Rule change proposal:

• Written objections to expediting the Rule change process under section 96 of the NEL were due by 20 March 2009; and
• Submissions had to received by 3 April 2009.

No objections or submissions were received.

On 16 April 2009, the Commission gave notice under sections 102 and 103 of the National Electricity Law (NEL) of the making of the National Electricity Amendment (Electricity Amendment (Negative Settlements Residue Recovery, Extension of Sunset) Rule 2009 No. 10 and the corresponding Rule determination. This Rule was made under an expedited process in accordance with section 96 of the NEL.

The Rule as Made extends the sunset date applicable to the current mechanism for recovery of negative settlement residues be extended by one year to 30 June 2010. The Rule as Made commenced on 16 April 2009.