On 7 April 2011, the Commission gave notice under sections 102 and 103 of the National Electricity Law (NEL) to make the Network Support and Control Ancillary Services final Rule determination and Rule as Made.

The AEMC has made the Rule as Made to introduce the term NSCAS to replace the term network control ancillary service.  The Rule also clarifies that transmission network service providers (TNSPs) have the primary responsibility for procuring NSCAS but the Rule as Made provides a safety net by giving the Australian Energy Market Operator (AEMO) the ability to acquire NSCAS for system security and reliability purposes. AEMO, following consultation with the relevant TNSPs, would be able to tender to procure NSCAS from any party, including non-Registered Participants and TNSPs.   The new arrangements for NSCAS will commence on 5 April 2012.

Background

On 13 April 2010, the Australian Energy Market Operator (AEMO) submitted a Rule change request to the AEMC in relation to NSCAS.  The Rule change seeks to implement the recommendations in AEMO's Final Determination for the review of Network Support and Control Services. AEMO was required to conduct the review under clause 3.1.4(a1)(4) of the Rules.

The proposed Rule change seeks to improve the current arrangements for the planning, acquisition, use and cost recovery of network support and control services by:

• providing a new definition of NSCAS to reflect their expanded scope and objective;
• providing greater clarity in the respective roles of AEMO and transmission businesses in planning and acquiring network support and control services; and
• allowing AEMO to acquire NSCAS from persons other than Registered Participants.

On 22 July 2010, the AEMC gave notice under section 95 of the NEL to commence consultation on the NSCAS Rule change request.  The first round of consultation closed on 3 September 2010.  Under section 96A of the NEL, the AEMC also decided not to proceed with the fast-track process as requested by the Rule proponent.

Under section 107 of the NEL the publication of the draft Rule determination was extended twice.  Firstly on 22 July 2010 as it was considered the Rule change request raised issues of sufficient complexity; and secondly on 23 November 2010 due to there being a material change in circumstances.

On 23 December 2010, the AEMC gave notice under section 99 of the NEL of the publication of the draft Rule determination, and draft Rule, for the Network Support and Control Ancillary Services (NSCAS) Rule change.  The draft Rule was the Rule proposed by the proponent with some amendments.  Submissions on the draft Rule determination and draft Rule closed on 25 February 2011.