On 9 September 2010, the Australian Energy Market Commission (Commission) gave notice under sections 102 and 103 of the National Electricity Law (NEL) of the making of the final Rule determination and final Rule for the "Victoria Generator Technical Performance Standards Derogations" Rule change request.

The final Rule removed most of the Victorian generators technical performance standards derogations from Schedule 9A3 of the National Electricity Rules (Rules).

Background

In December 2006, the Commission made a Rule that aimed to resolve issues relating to the performance standards of generators connected to transmission or distribution networks.  This Rule established a transitional process which required incumbent generators to register their actual technical capabilities with National Electricity Market Management Company (NEMMCO), now Australian Energy Market Operator (AEMO). This process was completed by 30 June 2007.  The registration process is set out in rule 4.16 of the National Electricity Rules (Rules) which established the technical performance standards for the relevant generating unit.  The technical performance standards were resolved between AEMO and the relevant generators in accordance with the requirements under rule 4.16.

Schedule 9A3 of Chapter 9 of the Rules sets out the jurisdictional derogations relating to the technical performance standards for Victorian generators. 

On 30 December 2009, the Minister for Energy and Resources, Victoria (Proponent) submitted a Rule change request to the Commission seeking to remove most of the Victorian generator technical performance standards derogations from Schedule 9A3 of the Rules.

In the Rule change request, the Proponent submitted that these derogations are "inconsistent with the capabilities that the generators have registered with AEMO [established under rule 4.16 of the Rules]". While these jurisdictional derogations remain in force, they take precedence over the technical standards that have been registered with AEMO, even though the accepted technical performance standards have already been established under rule 4.16 of the Rules.

In the Rule change request, the Proponent submitted that "in November 2007 the Australian Energy Regulator (AER) asked the Victorian Government to remove the technical performance derogations for Victorian generators from the NER [Rules]. The AER made this request as a result of its investigation into the events of the 16 January 2007 Victorian bushfires. In its 2007 report the AER found that the bushfires caused widespread load shedding to occur in Victoria and that during a disturbance to the power system it was possible for generators to trip without breaching their respective jurisdictional derogations."

In the Rule change request, the Proponent also submitted that "[t]he AER considers that since all generators have now registered the capability of their plant and equipment, the Chapter 9 derogations should be removed."

The derogation clauses proposed to be removed for each of the relevant generating unit are set out in the table in section 4 of the Rule change request document.

On 11 March 2010, the Commission published a notice under section 95 of the National Electricity Law to commence initial consultation on this Rule change request.  The Commission also published a Consultation Paper to provide guidance to stakeholders who will be preparing first round submissions to inform the draft Rule determination.

On 17 June 2010, the Commission gave notice under section 99 of the NEL of the making of the draft Rule determination and a draft Rule for the Rule change request. The Commission invited written submissions or comments in relation to the draft Rule determination and draft Rule by 30 July 2010.