On 26 May 2020, the AEMC received a rule change request from the COAG Energy Council that sought to clarify the applicability of the National Electricity Rules during periods of market suspension and provide AEMO with flexibility to prioritise arrangements for system security during periods of market suspension. On 17 June 2021 the AEMC made a final determination to not make a rule given that it is clear that all Rules apply during a period of market suspension unless otherwise stated within the Rules. 

Final Determination

The Commission’s final determination was not to make a final rule. The Commission is not satisfied that the proposed rule will, or is likely to, contribute to the achievement of the NEO. The Commission’s decision is consistent with stakeholder feedback to the draft determination – including from both AER and AEMO - which was unanimous in its support of the Commission’s position. 

In relation to the proposal to clarify the Rules applicability during a period of market suspension, the Commission is of the view that the Rules are clear that all Rules apply during a period of market suspension unless otherwise stated within the Rules. Further, the Commission is of the view that attempting to clarify this within the Rules itself could create a precedent where the Rules applicability needs to be explicitly set out as to what Rules do and don’t apply during any varied market and system condition. 

In relation to providing AEMO with flexibility to prioritise system security obligations over other NER requirements during a period of market suspension, the Commission considers that circumstances have changed since the Commission’s recommendations made in the Black system event (BSE)Report. In particular, AEMO has implemented the recommendations made by the AER in its Black system Compliance Report. Secondly, given the AER takes into account all relevant facts and circumstances in any compliance review, the Commission considers that the existing enforcement regime is more appropriate than attempting to foresee extreme or rare events and amending the Rules to accommodate such events. 

Background

This final determination follows the COAG Energy Council submitting a rule change request to the Commission on 26 May 2020. The rule change request stemmed from a recommendation made by the AEMC in the final BSE Report. This request sought to clarify the applicability of the NER during a period of market suspension. It also aimed to provide AEMO with appropriate flexibility to prioritise system security during such events.