Extended existing temporary arrangements to a time when a permanent solution to the issue of cost recovery for regulation services specifically in the Tasmanian context is decided by the Commission.

Background

On 18 October 2006, the Commission received a Rule proposal from NEMMCO which seeks to extend the expiry date for a participant derogation which relates to the localised cost recovery of “regulation services” (as defined in Chapter 10 of the Rules) in Tasmania. NEMMCO has also requested that the Commission treat the proposal as non controversial.

On 2 November 2006, the Commission gave notice of the commencement of first round consultation under section 95 of the NEL on this proposal. The Commission also gave notice of its intention to expedite the making of the Rule on the grounds that it is non-controversial. The Commission’s decision to expedite the Rule making process was subject to the Commission receiving written objections. Submissions closed on 4 December 2006 and written objections closed on 16 November 2006.

The Commission received an objection to the expedition of the NEMMCO Participant Derogation from Aurora Energy Pty Ltd. The Commission sought comment from interested parties, by 24 November 2006, on the issues raised in the objection as it considered whether to expedite the NEMMCO Participant Derogation. In particular, the Commission sought views on Aurora Energy’s comment that “The removal of this derogation and the averaging of regulation costs across the entire NEM would not result in a material impact to market participants.” The Commission received two submissions with comments on the objection.

On 7 December 2006, the Commission gave notice under sections 102 and 103 of the NEL of the making of the National Electricity Amendment (NEMMCO Participant Derogation (Extension of Cost Recovery of Regulation Services in Tasmania)) Rule 2006 No.20 and the corresponding final Rule determination. This Rule was made under an expedited process.

This Rule extends the current participant derogation in Part 11 of Chapter 8A of the Rules to 31 December 2008. The Commission considers that this Rule will provide additional time to enable proponents to consider alternate ways to improve the transparency and efficiency of the existing permanent right.

This Rule commenced operation on 7 December 2006.