Compliance Quarter’s March Energy Roundup

In our March energy news update we summarise the key regulatory changes and consultations announced in March that all energy industry participants should be familiar with. This includes law changes at the national and state level as well as a raft of consultations.

By Dr Drew Donnelly, Compliance Quarter.

1.       New commonwealth Legislation

The Security of Critical Infrastructure Bill 2018 passed through both houses of Parliament on 28 March and will become law imminently. This will allow the federal government to gather information on publicly and privately-owned ‘critical infrastructure assets’ (including electricity and gas assets) all over Australia and will permit the responsible Minister to require asset owners and operators to carry out risk mitigation actions. We discuss this bill further at https://www.compliancequarter.com.au/new-restrictions-foreign-investment-energy-infrastructure/.

2.       COAG Energy Council Initiatives

Initiatives currently underway at the direction of the Council of Australian Governments (COAG) Energy Council and associated Energy Security Board (ESB) include:

·         The Gas Capacity Trading Reform Package. This package of reforms will empower the Australian Energy Market Operator (AEMO) to operate a capacity trading platform and day-ahead auction in the gas market.[1] The goal of these reforms is a more efficient allocation of excess capacity and transportation assets in the gas market. A range of amendments to the National Gas Law (NGL) associated regulation, and National Gas Rules are being consulted on. Submissions are due 5pm (AEST) 27 April 2018 and can be sent to enquiries@gmrg.coagenergycouncil.gov.au.

·         National Energy Market (NEM) Data Strategy Consultation. On 20 March, the ESB began consultation on a data strategy for the NEM. This strategy would provide consistency and better information sharing with respect to market data between different regulatory agencies.[2] The consultation proposes that the goal of the data strategy be “to facilitate access to data that supports…increased security, future reliability, affordability and lower emissions.”[3] The ESB invites comments from interested parties in by 20 April 2018. Submissions should be sent to info@esb.org.au.

·         National Electricity Law and NGL Amendment Package – Creating a Binding Rate of Return. The COAG Energy Council is consulting on a number of changes to the National Electricity Law and the NGL relating to the calculation of the rate of return on capital and the value of imputation credits used in economic regulatory decisions. Submissions are due by 13 April at energycouncil@environment.gov.au.^[4] 

3.       Australian Energy Regulator (AER) consultations and updates

Announcements from the AER include:

·         Statement of Approach to Wholesale Marketing Performance Monitoring. AER’s statement of approach outlines the approach it will take towards fulfilling its wholesale electricity market performance monitoring functions. It sets out:

o   how competition and efficiency will be defined

o   the markets to include in the analysis

o   the framework for our analysis

o   how AER will collect and use information.[5]

·         On 27 March, the announcement that AER has submitted a rule change request to the Australian Energy Market Commission seeking to strengthen Customer Hardship protections. You can read more at https://www.aer.gov.au/news-release/strengthening-protections-for-customers-in-financial-hardship.

·         On 23 March, the launching of a ‘New Reg’ approach to network regulation which will enhance customer consultation for regulatory proposals and revenue setting. To read more see https://www.aer.gov.au/news-release/consultation-launched-on-new-approach-to-network-regulation

·         On 16 March, that the revised retail exempt selling guideline came into force. To read more go to https://www.compliancequarter.com.au/revised-exempt-selling-guideline-released/.

4.       Australian Renewable Energy Agency (ARENA) Initiatives

In March, ARENA announced a series of significant investment decisions for renewable energy across Australia including:

·         $25 million to jointly fund (with the Victorian State Government) Victoria’s first large-scale, grid-connected batteries at Gannawarra solar farm.

·         $12.5 million for pilot projects and studies to integrate distributed energy resources into the electricity system.

·         Half a million for a trial to investigate the economic and commercial potential of wind farms providing frequency control to stabilise the grid (for more information see https://www.compliancequarter.com.au/opportunities-for-innovators-in-frequency-control-arena-invests-half-a-million-in-wind-farm-feasibility-study/).

5.       Australian Energy Market Operator (AEMO) consultations

·         AEMO’s Reliability Standard Guideline. AEMO is consulting on minor and technical changes to the Guideline to ensure consistence with clause 4.8.4A of the National Electricity Rules. [6] Submissions are due 24 April at RSIG_Consultation@aemo.com.au.

·         Life Support Obligations and B2B Procedures. AEMO is consulting on how information about life support customers should be communicated between retailers and distributors.^[7] Submissions should be made by 5.00pm AEST on 26 April 2018 and sent to NEM.Retailprocedureconsultations@aemo.com.au.

6.       Queensland

On 15 March, Queensland’s Parliament’s State Development, Natural Resources and Agricultural Industry Development Committee recommended that the Electricity and Other Legislation (Batteries and Premium Feed-in Tariff) Amendment Bill 2018 reported back to Parliament and recommended that the Bill be passed.[8] For further information on this Bill see https://www.compliancequarter.com.au/the-qld-electricity-and-other-legislation-batteries-and-premium-feed-in-tariff-amendment-bill-2018/.

7.       New South Wales

·         The Independent Pricing and Regulatory Tribunal (IPART) is calling for submissions on solar feed-in tariffs (for further information go to https://www.compliancequarter.com.au/solar-feed-in-tariffs-2018-19-for-nsw-call-for-submissions/).

Submissions are due by 16 April 2018 and can be lodged via an online form at www.ipart.nsw.gov.au/Home/Consumer_Information/Lodge_a_submission.

·         IPART is also conducting a Review of Safety Management system reporting requirements for network businesses in NSW. Submissions are due by 13 April. For further information see https://www.ipart.nsw.gov.au/Home/Industries/Energy/Reviews/Electricity/Review-of-Safety-Management-system-reporting-requirements.

8.       Victoria

In response to an Independent Review into the Electricity and Gas Retail Markets the Essential Services Commission (ESC) is developing a methodology for determining a reference price.^[9]The ESC has released a consultation paper and seeks input by 5 pm on 17 April 2018 at retailenergyreview@esc.vic.gov.au

This concludes our March Energy news roundup – if you’d like to discuss any aspect of this article in more detail please get in touch with the Compliance Quarter team by clicking here.