Explanatory Note: Capacity trading reform package – Final legal and regulatory framework
On 19 March 2018, the GMRG released the draft legal and regulatory instruments required to implement the capacity trading reform package for consultation and invited stakeholders to provide feedback by Friday 27 April 2018. The consultation paper and submissions received are available at Capacity Trading Reform Package Legal and Regulatory Framework – Consultation paper.
Having considered the feedback provided by stakeholders, the GMRG developed the final legal and regulatory instruments for the COAG Energy Council’s consideration and approval. The final legal and regulatory instruments were agreed by Energy Ministers out-of-session in late June 2018.
On 2 August 2018 the National Gas (South Australia) (Capacity Trading and Auctions) Amendment Bill 2018 (Amendment Bill) was tabled in the South Australian Parliament. The Amendment Bill passed the South Australian House of Assembly on 5 September 2018 and the South Australian Legislative Council on 25 October 2018. The Act was proclaimed on 22 November 2018 and became operational in the ACT, New South Wales, the Northern Territory (see the Bulletin published by the Senior Committee of Officials on the COAG Energy Council website for more detail on the application of the reforms in the Northern Territory), Queensland, South Australia, Victoria and Tasmania on proclamation. Following the proclamation of the changes to the NGL, the required amendments to the Regulations and the National Gas Rules were made, along with the initial Operational Transportation Services Code. These instruments came into effect on 22 November 2018.
An explanatory note has been developed to assist stakeholders understand the final legal and regulatory instruments. The explanatory note also provides an overview of the feedback stakeholders provided on these instruments and the GMRG’s response to this feedback.
The capacity trading reform package was originally recommended by the Australian Energy Market Commission (AEMC) in its Eastern Australian Wholesale Gas Market and Pipelines Framework Review and endorsed by the COAG Energy Council at its August 2016 meeting. In the latter half of 2016 the GMRG was accorded responsibility for leading the design and development of this reform package.
The GMRG’s final design recommendations on the capacity trading reform package were endorsed by the Energy Council in November 2017 / January 2018. The Energy Council agreed at its 24 November 2017 meeting, that the capacity trading reform package should be implemented by 1 March 2019 and the standard market timetable should be implemented by 1 October 2019.
On 19 March 2018, the GMRG released the draft legal and regulatory instruments required to implement the capacity trading reform package for consultation and invited stakeholders to provide feedback by Friday 27 April 2018. This feedback was considered by the GMRG when developing its final recommendations on the legal and regulatory instruments required to give effect to the capacity trading reform package, which were provided to the COAG Energy Council in June. On 29 June 2018, the COAG Energy Council endorsed the GMRG’s recommendations and agreed to implement the legal and regulatory instruments required to give effect to the final design of the capacity trading reform package.