Declaring the emergency
On 22 December 2022, the NSW Premier, under the Energy and Utilities Administration Act 1987 (NSW), declared a coal market price emergency from 22 December 2022 to 30 June 2024.
This enables the government to impose price caps on coal used in the NSW power sector.
The NSW Minister for Energy has powers to give directions to NSW coal-fired power stations and coal suppliers to respond to the emergency.
AER appointed as regulator
On 13 February 2023, the NSW Minister for Energy formally appointed the AER as the regulator to monitor compliance with and enforcement of the directions.
Our role is to ensure NSW coal suppliers and power stations comply with directions and enable reporting on the impacts of the market interventions.
To assist them in this, we published 2 guidance notes and a set of frequently asked questions.
Applying for a price cap review
The directions allow coal suppliers to apply to the NSW Minister for Energy for a higher price cap if their production costs with a fair margin exceed the directed price cap.
Applications to the NSW Minister must be approved by the AER.
In April 2023, we published a guidance note describing our assessment approach for production costs and fair margins. The guideline also includes the form that coal suppliers must use when submitting their application to the NSW Minister.