Welcome back for our first energy market regulatory update for 2018. We trust you enjoyed some time on the deck chair and are ready to dive into another big year in this ever-changing space.
Despite the time of year, our regulators have been busy. Key developments since the last update in December are:
- the Energy Security Board delivered its first report into the health and outlook of the NEM – they conclude that electricity bills are not affordable; reliability risks in the system are increasing, and future carbon emissions policy is uncertain;
- the Full Federal Court found for the AER in relation to a judicial review challenge by SAPN in relation to rate of return and labour costs;
- the AER is seeking input into its proposed approach to monitoring the wholesale market under its new powers;
- the AEMC published terms of references for a new biennial review to track the growth in liquidity in the wholesale gas and pipeline trading markets and in relation to whether the east coast gas market trading reforms should apply in the Northern Territory;
- the AER finalised its position on the regulatory treatment of inflation – an important network development as various resets commence;
- AEMC continued work in a number of areas around frequency support and system reliability – including publishing a progress update on its review of the frequency support market framework, as well as a rule change allowing more flexibility for AEMO when determining 'lack of reserve’ conditions;
- the Clean Energy Regulator released new information that shows Australia will meet the 2020 Renewable Energy Target; and
- in terms of state regulators – both IPART and the Tasmanian Economic Regulator released annual market monitoring reports and the ESC has sought feedback on new feed-in tariffs. The ESC process is of particular interest, as one of the few Australian regulatory processes to consider the kind of ‘value of solar’ issues regularly debated in the US.
… and with the New Year, a new version of the NER – we’re now up to 105.