The AEMC has made a final rule under an expedited rule change process on the basis that it was a request for a non-controversial rule.

The final rule clarifies and addresses missing administrative and transitional mechanisms to facilitate the original policy intent of the Rules to implement the actionable Integrated System Planning (ISP) framework, which commenced on 1 July 2020.

Specifically, the final rule will provide the correct transitional and administrative mechanisms within the national electricity rules (NER or Rules) so that:

• the Australian Energy Market Operator (AEMO) is able to recover its national transmission planner (NTP) function fees for the 2020-21 financial year from co-ordinating network service providers (CNSPs), and CNSPs can include these fees in their transmission pricing
• there is alignment between AEMO’s budgeting process and CNSP’s transmission pricing processes, and
• there is clarity with regard to the recovery of NTP function fees in Victoria, where AEMO is the CNSP.

The final rule will commence 29 October 2020.

Background

On 21 August 2020, the AEMC received a rule change request from the Australian Energy Market Operator (AEMO) which seeks to address a number of issues relating to timing and uncertainty in administrative arrangements for the budgeting and charging of AEMO's national transmission planner (NTP) costs to transmission network service providers (TNSPs).

On 3 September 2020, the AEMC initiated the rule change request under an expedited rule change process with the publication of the consultation paper.

On 1 October 2020, submissions to the consultation closed. One submission was received.

Rule change request

The rule change request sought to clarify and address missing administrative and transitional mechanisms in the National Electricity Rules (NER or rules) to facilitate the policy intent of the recent changes to the rules to implement the Integrated System Planning framework, which commenced on 1 July 2020.

The rule change request identified four key issues related to the budgeting and charging of NTP function fees by AEMO to TNSPs:

• The previous rules did not provide for AEMO to recover in 2020-2021 the NTP function fees it expects to incur in 2020-21 (or which AEMO has already incurred in 2020-21 or in previous financial years but not yet recovered).
• The previous rules did not provide for TNSPs to include any NTP function fees in their 2020-21 transmission prices in Queensland, New South Wales, South Australia and Tasmania.
• There was a misalignment in the timing of AEMO’s budgeting process and the publication of TNSPs’ transmission pricing.
• There was uncertainty in the administrative arrangements around the recovery of NTP function fees in Victoria due to AEMO acting as both national transmission planner and TNSP.

It also proposed that NTP function fees be allocated to Co-ordinating Network Service Providers (CNSPs), rather than TNSPs.

Expedited (non-controversial) rule change  

AEMO requested that the rule change request be treated as non-controversial as the proposed changes will not have a significant effect on the NEM and are of a non-controversial nature.

The Commission decided to use an expedited process as it considered the proposed rule as non-controversial. Specifically, the rule change request was narrow in scope and did not seek to change existing policy or to introduce new policy. In addition, the proposed changes were largely of an administrative nature, designed to facilitate the original policy intent of the ISP Rule.

Key Dates

The key dates for stakeholders in this process are as follows:

• Initiation of rule change process and publication of this consultation paper: 3 September 2020
• Written requests not to use the expedited process to be received by: 17 September 2020
• Submissions to the consultation paper to be received by: 1 October 2020
• Publication of the final rule determination and final rule (if made): 29 October 2020