On 15 September 2011, the Commission published its final Rule determination for the STTM Brisbane Hub Rule change request submitted by the Australian Energy Market Operator (AEMO). This determination includes a Rule as Made which addresses some technical aspects related to the implementation of the STTM at the Brisbane hub.

Commission's decision

The Commission has decided to make a Rule that reflects AEMO's proposal.

The Commission has decided to make a Rule as it considers that AEMO's proposal is likely to contribute to the achievement of the National Gas Objective. In particular, the Rule as Made is likely to lead to price, reliability and security of supply benefits to consumers of natural gas as it will allow:

• the STTM to commence operation at Brisbane without substantial implementation costs associated with changing the timing of the start of the Brisbane gas day from 8:00am to 6:30am;
• gas users in the Queensland retail gas market to register as Self Contracting Users (SCUs), providing them with the opportunity to contract for gas supply directly with pipeline operators and producers and also allowing them to participate in the STTM at Brisbane. This may increase competition in the Queensland retail market and the STTM at Brisbane; and
• transmission-connected STTM Users to offer contingency gas services at the STTM at Brisbane, enhancing the reliability and security of supply of natural gas.

The Rule as Made reflects the intent of AEMO's proposed Rule with some amendments. The most significant of these amendments is that the Rule as Made does not oblige the AEMC to complete a review of the timing of the start of the gas day across all STTM hubs within five years of the commencement of the STTM at the Brisbane hub. This is because there are existing arrangements within the National Gas Law to allow for such a review to occur if required.

Background

On 4 April 2011, AEMO submitted the Rule change request. In making the request, AEMO sought to address some technical aspects related to the implementation of the STTM at the Brisbane hub.

The STTM is a wholesale market for trading natural gas. STTM hubs have been operating in Sydney and Adelaide since September 2010 and an STTM hub is scheduled to start operating in Brisbane from 1 December 2011. 

On 16 June 2011, the Commission gave notice that it had initiated a ‘fast-track' process for the Rule change request. The Commission undertook a ‘fast track' process as it was satisfied that AEMO had adequately consulted with the public on the nature and content of the Rule change request prior to its submission.

On 23 June 2011, the Commission released a draft Rule determination, including a draft Rule, and invited submissions by 4 August 2011. One submission was received from AEMO.