AER invites submissions on proposal to defer final RRO Guidelines

The Retailer Reliability Obligation (RRO) is supported by AER Guidelines which provide detail on how the various stages of the RRO operate. To support timely implementation of the RRO, the AER was required to make a number of its Guidelines as ‘interim Guidelines’ in the months following commencement. The Rules require each of these to be transitioned from interim to final following the rules consultation procedures.

The interim Forecasting Best Practice Guideline was transitioned to final in August 2020 as part of the AER’s work package to make the Integrated System Plan actionable.

The remaining final guidelines - the Reliability Instrument Guidelines, Market Liquidity Obligation (MLO) Guidelines, and Contracts & Firmness Guidelines - and the new AER Reliability Compliance Procedures & Guidelines, are currently scheduled by the AER for consultation and release by June 2021. That consultation was expected to include:

  • The addition, to the interim Reliability Instrument Guidelines, of guidance on the AER’s assessment of AEMO’s endeavours to prepare reliability forecasts in accordance with the latest Forecasting Best Practice Guidelines.
  • Administrative updates, but no substantive changes, to the interim Contracts and Firmness Guidelines—in particular to reflect that the National Electricity Rules will, from October 2021, treat wholesale demand response in the same way as other demand response contracts for the purposes of the RRO.
  • Administrative clarifications to, but no substantive changes to, the interim MLO Guidelines as they relate to operation of the MLO on public holidays and criteria for the potential appointment of additional MLO exchanges.
  • A minimalist approach to the new Reliability Compliance Procedures and Guidelines, setting out timeframes for the engagement on RRO compliance assessments required of the AER under the Rules, and proposed processes for any compliance audits undertaken in respect of the RRO.

The Energy Security Board’s (ESB) Post 2025 Market Design Directions paper, released on 5 January 2021, presents a number of potential changes to the RRO, and by implication to the role and nature of the AER’s Guidelines. These include: triggering arrangements (Reliability Instrument Guidelines); contracting and reporting obligations (Contracts and Firmness Guidelines, Reliability Compliance Procedures and Guidelines); and the market liquidity obligation (MLO Guidelines).

The AER now proposes to defer consultation on these four guidelines until Energy Ministers have considered the ESB’s final recommendations on the Post 2025 Electricity Market Design. This would allow further consideration of the appropriate nature and scope of consultation on Guidelines made under the current rules in the context of future directions for the RRO. The AER also acknowledges that stakeholders have numerous competing demands to participate in consultation this year.

The effect of this delay would be that the interim Reliability Instrument Guidelines, MLO Guidelines and Contracts & Firmness Guidelines would remain in place to support the current rules in the intervening period, and likely at least until January 2022. The AER would continue to monitor and enforce the RRO under relevant provisions of the National Electricity Law and Rules until any new requirements under the Reliability Compliance Procedures and Guidelines were in place.

Invitation for submissions

Stakeholders are invited to raise any concerns with the proposed deferral of consultation on final RRO Guidelines under the current Rules, by making a submission to RRO@aer.gov.au by close of business on 16 February 2021.

The AER will confirm its plans for this consultation via this website following consideration of any issues raised.

Sector: 
Segment: 
Issued date: 
2 February 2021
AER reference: 
AC 09/21
Contact: 
AER General Inquiries AERInquiry@aer.gov.au