South Australian Numbered Acts South Australian Numbered ActsAfter Part 2 insert:
Part 2A—Retailer Reliability Obligation
Division 1—General
14C—Definitions
In this Part—
"contract position day"—see section 14K(4)(b)(i)
;
"forecast reliability gap"—see section 14G(1)
;
"forecast reliability gap period"—see section 14G(2)
;
"net contract position"—see section 14O(3)
;
"one-in-two year peak demand forecast", for a region during a specified period, means the peak demand forecast in accordance with the Rules—
(a) to occur for the region during the period; and
(b) where the likelihood is that the forecast amount will be exceeded once in any two-year period;
"peak demand", for a period in a region, means the maximum electricity demanded, in megawatts, in the region during the period, determined in accordance with the Rules;
"region" means a region of the national electricity market determined under the Rules;
"reliability gap period", in relation to a T-1 reliability instrument, means the forecast reliability gap period stated in the instrument;
"reliability instrument" means a T-3 reliability instrument or a T-1 reliability instrument;
"reporting day"—see section 14K(4)(b)(ii)
;
"T-1 cut-off day"—see section 14G(4)
;
"T-1 reliability instrument" means a reliability instrument for a forecast reliability gap made by the AER under section 14K
that relates to the T-1 cut-off day for the forecast reliability gap;
"T-3 cut-off day"—see section 14G(3)
;
"T-3 reliability instrument" means a reliability instrument for a forecast reliability gap made by the AER under section 14K
that relates to the T-3 cut-off day for the forecast reliability gap;
"trading interval" means a period prescribed by the Rules to be a trading interval for the wholesale exchange;
"wholesale exchange" means the wholesale exchange for electricity operated and administered by AEMO under this Law and the Rules.
14D—Meaning of liable entity for a region
(1) Each of the following is a liable entity for a region:
(a) a person who is a Registered participant mentioned in section 11(4)(a);
(b) a person mentioned in section 11(4)(b) prescribed by the Rules to be a liable entity for the reliability obligations;
(c) another person who has elected, under section 14E
, to assume responsibility for the reliability obligations of a person mentioned in paragraph (a)
.
(2) However, a person mentioned in subsection (1)(a)
is not a liable entity for a region—
(a) if the person is a Registered participant mentioned in subsection (1)(a)
who is prescribed by the Rules not to be a liable entity for the reliability obligations; or
(b) to the extent a person mentioned in subsection (1)(c)
has elected to assume the person's responsibility for the reliability obligations for the region.
14E—Process for non-liable persons to opt in to reliability obligations
(1) This section applies to a person—
(a) if—
(i) the person purchases electricity supplied in a region from a liable entity; and
(ii) the person's annual consumption of electricity is more than the threshold prescribed by the Rules for this section; or
(b) prescribed by the Rules to be eligible to make an election under this section.
(2) The person may elect to assume all or some of the liable entity's responsibility for the reliability obligations in relation to the electricity purchased for the period stated in the election.
(3) An election under subsection (2)
must—
(a) state the extent to which the person has elected to assume the liable entity's responsibility; and
(b) be made in the manner, form and timeframes required by the Rules.
Division 2—Reliability forecasts and instruments
14F—Annual forecast for reliability gaps
Each year, AEMO must—
(a) perform the functions stated in the Rules for the purposes of forecasting for the occurrence of reliability gaps in future years; and
(b) prepare and publish, in the manner, form and timeframes required by the Rules, information about the forecasting.
14G—Meaning of forecast reliability gap, forecast reliability gap period, T-3 cut-off day and T-1 cut-off day
(1) A "forecast reliability gap occurs when the amount of electricity forecast for a region, in accordance with the Rules, does not meet the reliability standard to an extent that, in accordance with the Rules, is material.
(2) A "forecast reliability gap period is the period during which a forecast reliability gap is forecast to occur.
(3) The "T-3 cut-off day for a forecast reliability gap is the day that is 3 years before the day the forecast reliability gap period for the forecast reliability gap starts.
(4) The "T-1 cut-off day for a forecast reliability gap is the day that is 1 year before the day the forecast reliability gap period for the forecast reliability gap starts.
(5) In this section—
"reliability standard" means the standard prescribed by the Rules for the reliability of electricity for the national electricity market.
14H—Rules must provide timetable for reliability forecasts, requests and instruments
(1) The Rules must provide for timeframes for the following matters in relation to a forecast reliability gap:
(a) the period, that ends at least the stated number of days before the T-3 cut-off day and T-1 cut-off day, during which—
(i) AEMO must make a request under section 14I
; and
(ii) the AER must decide whether to make a reliability instrument under section 14K
;
(i) ending on or before the T-1 cut-off day, during which the contract position day must be set; and
(ii) ending on or after the T-1 cut-off day, during which the reporting day must be set;
(c) the periods that apply for the matters mentioned in paragraph (a)
or (b)
if AEMO corrects a request under section 14J
.
(2) Also, the Rules must provide for the way to determine whether a request for the AER to make a T-1 reliability instrument under section 14I
is related to a T-3 reliability instrument.
(3) For subsection (2)
, the way prescribed may include the extent to which the reliability gap period and trading intervals stated in a request for the AER to make a T-1 reliability instrument must be the same as, or may be different to, the forecast reliability gap period and trading intervals stated in the T-3 reliability instrument.
14I—AEMO must request reliability instrument
(1) This section applies if—
(a) AEMO is satisfied a forecast reliability gap is forecast to occur in a region; and
(b) AEMO has published the information about the forecast that AEMO is required to publish under section 14F(b)
.
, AEMO must request the AER to consider making a reliability instrument for the region in relation to the forecast reliability gap.
(3) AEMO must make a request under subsection (2)
for a T-1 reliability instrument for a region only if the AER has made a related T-3 reliability instrument.
(4) A request under subsection (2)
—
(a) is made by giving a written notice about the request to the AER; and
(b) must be made within the period required by the Rules; and
(c) must state the following information about the forecast reliability gap:
(i) the region in which the forecast reliability gap is forecast to occur;
(ii) the first and last days of the forecast reliability gap period;
(iii) for a request for a T-3 reliability instrument—the trading intervals, during the forecast reliability gap period, for which liable entities may be required to hold net contract positions that are sufficient to meet their share of the one-in-two year peak demand forecast for the forecast reliability gap period;
Example—
The trading intervals between 4pm and 8pm each weekday during the forecast reliability gap.
(iv) for a request for a T-1 reliability instrument—the trading intervals, during the forecast reliability gap period, for which liable entities will be required to hold net contract positions that are sufficient to meet their share of the one-in-two year peak demand forecast for the forecast reliability gap period if the T-1 reliability instrument is made;
Example—
The trading intervals between 4pm and 8pm each weekday during the forecast reliability gap.
(v) AEMO's one-in-two year peak demand forecast for the forecast reliability gap period.
(5) A request under subsection (2)
—
(a) may only apply to 1 forecast reliability gap period; and
(b) may be made on more than 1 occasion in a year for different forecast reliability gap periods in the same region or in different regions.
14J—AEMO may correct request for reliability instrument
(1) This section applies if a request under section 14I
contains—
(a) a material miscalculation of figures; or
(b) a material mistake in the description of a person, period, thing or matter referred to in the request; or
(c) a defect in form.
(2) AEMO may correct the request by giving a written notice about the correction, and a correct request, to the AER.
14K—AER may make reliability instrument for a region
(1) This section applies if—
(a) AEMO makes a request under section 14I
in relation to a forecast reliability gap for a region; and
(b) where AEMO's request is for a T-1 reliability instrument for the region, the AER has made a related T-3 reliability instrument for the region.
(2) The AER must, within the period required by the Rules—
(a) consider the request; and
(b) decide whether or not to make a reliability instrument for the region in relation to the forecast reliability gap.
(3) The AER may decide to make a reliability instrument only—
(a) if the AER is satisfied—
(i) a forecast reliability gap is forecast, in accordance with the Rules, to occur in the region; and
(ii) it is appropriate in the circumstances, having regard to the criteria stated in the Rules, to make the reliability instrument; and
(b) for the region, forecast reliability gap period and trading intervals as stated in AEMO's request, without modification.
(4) A reliability instrument must state—
(a) the information mentioned in section 14I(4)(c)
, as stated in AEMO's request; and
(b) for a T-1 reliability instrument—
(i) the day (the "contract position day") on which liable entities are required under section 14R
to hold a sufficient net contract position for the reliability gap period; and
(ii) the day (the "reporting day") on which liable entities must report their net contract position as at the contract position day under section 14P
.
(5) The reliability instrument takes effect when it is published on the AER's website.
(6) The AER must publish its decision to make or refuse to make a reliability instrument, and the reasons for the decision, on the AER's website before—
(a) in the case of a T-3 reliability instrument— the T-3 cut-off day or an earlier day prescribed by the Rules; or
(b) in the case of a T-1 reliability instrument— the T-1 cut-off day or an earlier day prescribed by the Rules.
(7) If a request made under section 14I
was corrected under section 14J
, a reference in this section to the request is a reference to the request as corrected.
14L—Reliability instrument has force of law
(1) A reliability instrument has the force of law in this jurisdiction.
(2) An Act of this jurisdiction regulating the making of subordinate legislation does not apply to a reliability instrument.
14M—Failure to comply with consultation obligation does not affect validity
(1) This section applies if the Rules require the AER to undertake stated consultation before making a reliability instrument under section 14K
.
(2) Failure to comply with the obligation does not invalidate or otherwise affect a reliability instrument.
Division 3—Reliability obligations
14N—Application of Division
(1) This Division applies to a person if—
(a) the AER made a T-1 reliability instrument for a forecast reliability gap in a region; and
(b) the person is a liable entity for the region to which the instrument applies; and
(c) the person is a liable entity on—
(i) the contract position day; or
(ii) in circumstances for which a later day is prescribed by the Rules—the later day.
(2) In this Division—
(a) a reference to a matter is a reference to the matter for the region to which the T-1 reliability instrument applies; and
(b) a reference to the reliability gap period is a reference to the forecast reliability gap period stated in the T-1 reliability instrument; and
(c) a reference to the stated trading intervals is a reference to the trading intervals stated in the T-1 reliability instrument; and
(d) a reference to the contract position day or the reporting day is a reference to the contract position day or reporting day stated in the T-1 reliability instrument.
14O—Meaning of qualifying contract and net contract position
(1) A "qualifying contract of a liable entity is a contract or other arrangement to which the liable entity is a party—
(i) is directly related to the purchase or sale, or price for the purchase or sale, of electricity from the wholesale exchange during a stated period; and
(ii) the liable entity entered into to manage its exposure in relation to the volatility of the spot price; or
(b) of another type prescribed by the Rules to be a qualifying contract.
(2) However, a qualifying contract does not include a contract or arrangement mentioned in subsection (1)(a)
that is prescribed by the Rules to be an excluded contract for the reliability obligations.
(3) A liable entity's "net contract position" during a particular period is—
(a) the number of megawatts of electricity to which the liable entity's qualifying contracts under subsection (1)
relate for the period; and
(b) adjusted in accordance with the Rules to account for the likelihood that, despite the qualifying contracts, the liable entity retains exposure in relation to the volatility of the spot price during the period.
(4) In this section—
"spot price" means the price for electricity purchased from the wholesale exchange in a region determined in accordance with the Rules.
14P—Obligation to report net contract position
(1) The liable entity must give the AER a report about the liable entity's net contract position for the stated trading intervals during the reliability gap period as at the contract position day—
(a) that complies with subsection (2)
; and
(b) on or before the reporting day stated in the T-1 reliability instrument.
Note—
Subsection (1)
is a civil penalty provision: See the definition of "civil penalty provision" in section 2AA(1).
(a) include the information required under the Rules; and
(b) be prepared and given in the manner and form required by the Rules.
(3) The liable entity must not provide information in a report the liable entity knows is false or misleading in a material particular.
Note—
Subsection (3)
is a civil penalty provision: See the definition of "civil penalty provision" in section 2AA(1).
14Q—Adjustment of net contract position after contract position day
A liable entity may adjust the liable entity's net contract position for a stated trading interval during a reliability gap period after the contract position day for the purposes of sections 14R
and 14S
in accordance with the Rules.
14R—Obligation to have contracted sufficiently for one-in-two year peak demand forecast
(1) This section applies if the peak demand is more than the one-in-two year peak demand forecast for the reliability gap period during a stated trading interval in the reliability gap period.
(2) The liable entity must comply with the obligation that the liable entity's net contract position for the trading interval is not less than the liable entity's share of the one-in-two year peak demand forecast for the trading interval determined in accordance with the Rules.
Note—
Subsection (2)
is a reliability obligation civil penalty provision: See the definition of "reliability obligation civil penalty provision" in section 2AA(1a).
(3) For subsection (2)
, the liable entity's net contract position for a trading interval is—
(a) if the liable entity has adjusted its net contract position under the Rules—the liable entity's net contract position for the trading interval as at the day provided under the Rules; or
(b) otherwise—the liable entity's net contract position for the trading interval as at the contract position day.
14S—Obligation to maintain net contract position
The Rules may require a liable entity to maintain its net contract position for the stated trading intervals in the reliability gap period during the period that—
(a) starts on the contract position day; and
(b) ends when the reliability gap period ends.
Division 4—AEMO as procurer of last resort
14T—AEMO may recover costs for procurer of last resort function
(1) The Rules may provide for a cost recovery scheme that allows AEMO to recover the costs AEMO incurs as the procurer of last resort for a region.
(2) AEMO is the procurer of last resort for a region if—
(a) a T-1 reliability instrument is made for a forecast reliability gap in a region; and
(b) AEMO performs its function under the Rules of entering into contracts to secure the availability of electricity reserves in relation to the reliability gap period stated in the instrument in the region.
(3) The cost recovery scheme under the Rules may provide for AEMO to recover the costs from the liable entities for the region who breach section 14R(2)
or an obligation under the Rules mentioned in section 14S
during the reliability gap period.
(4) However, a liable entity is not liable to more than $100 000 000 under the cost recovery scheme in relation to a reliability gap period in a region.