Market Impact Transparency Report

The Australian Energy Regulator (AER) is preparing to release its first Transmission Network Service Standards Market Impact Transparency Report (MITR).

On 28 July 2004 the Australian Competition and Consumer Commission (ACCC) released its MITR draft decision. The draft decision reviewed various methods of measuring the market impact of transmission constraints highlighting that transmission constraints can have an adverse affect on the dispatch and pricing in the National Electricity Market.

On 1 July, 2005 the AER assumed responsibility for delivering the MITR. Initially it was intended that the first MITR would be released at that time. However, a number of issues arose regarding the calculation of the measures contained within the report which resulted in its release being delayed.

Since assuming responsibility for the MITR the AER has made significant progress in resolving outstanding issues through:

  • further research and analysis as to the construction and methodology supporting the derivation of both the Marginal Cost of Constraints (MCC) and Total Cost of Constraints (TCC);
  • conducting an independent audit on the MCC methodology and data generated;
  • conducting an independent audit of the TCC methodology and data generated; and
  • forming a working group with staff and consultants from the AER and NEMMCO to address issues associated with the calculation of the TCC.

The AER is intending to release the first MITR late 2005/early 2006. This report would contain:

  • the MCC;
  • the TCC;
  • information, prepared by transmission network service providers on line ratings; and
  • information as to the nature of transmission constraints.

Once the first MITR is released the AER will continue to investigate opportunities that increased transparency provides, including:

  • focussing on factors that cause constraints and affect their extent and severity;
  • opportunities to engage relevant parties in discussion to promote efficient behaviour; and
  • investigating the introduction of an economic incentive mechanism.
Issued date: 
1 August 2005
AER reference: 
AC 001/05