To oblige NEMMCO to set dispatch price to VoLL within 3 dispatch intervals of shedding load after a contingency event.

Background

On 17 March 2008 the Commission received a Rule change proposal from the Australian Energy Regulator (AER) relating to the obligation imposed on NEMMCO under clause 3.9.2 of the National Electricity Rules to set the dispatch price to the value of lost load (VoLL) following the shedding of interruptible load as a result of a contingency event.

The Rule change proposal would remove the obligation on NEMMCO to set the dispatch price to VoLL following automatic load shedding. It is contended that this would help to minimise the risks to system security in cases where extreme market conditions exist that have resulted in automatic load shedding.

The Rule change proposal was considered under section 94 of the National Electricity Law (NEL).

On 24 April 2008, the Commission published a notice under section 95 of the National Electricity Law (NEL) advising of its intention to commence the Rule change process and initial consultation on this Rule proposal.

The Commission invited interested parties to provide submissions on the Rule change proposal by 22 May 2008.

On 31 July 2008 the Commission gave notice under section 99 of the NEL of the making of the draft Rule determination and draft Rule on the AER's Rule change proposal relating to Setting VoLL following the shedding of interruptible load.

The Commission’s draft determination, reflected in the draft Rule, is to make the substantive changes proposed by the AER.

The Commission invited interested parties to provide submissions on the draft Rule determination and draft Rule by 15 September 2008.

The Commission also published a mark-up of the Rules incorporating the draft Rule.

On 22 October the Commission published a notice under section 107A of the NEL to extend the period for making its final Rule determination and final Rule for this Rule change proposal to 21 November 2008.

The Commission considered that a specific issue raised in a submission by the NGF to the draft Rule determination required further consultation in relation to the draft Rule determination.

The specific issue on which the Commission invited submissions was whether it would be appropriate for the final Rule to provide that the dispatch price be set to VoLL when the load restoration process, following automatic load shedding, is halted due to a lack of available generation capacity. Further details can be found below in the Commission’s explanatory note on its request for submissions on this issue.

The Commission invited interested parties to make submissions on this specific issue. The due date for submission was 6 November 2008.

On 20 November 2008, the Commission published a notice under section 102 and 103 of the NEL of the making of the National Electricity Amendment (Setting VoLL Following the Shedding of Interruptible Load) Rule 2008 and associated Rule determination. The Rule commenced on 20 November 2008.

The Rule adopts the Commission’s draft Rule to remove the requirement for NEMMCO to set the dispatch price to the maximum permitted price (VoLL) following automatic load shedding.