AER working to improve compliance outcomes in gas and electricity

The Australian Energy Regulator has released its ‘Quarterly Compliance Report: National Electricity and Gas Laws’ for the quarter ending 31 December 2012. The report summarises the AER’s compliance monitoring and enforcement activities in the wholesale electricity and gas markets.

Of particular note, the AER concludes a project relating to the quality of data for the gas short term trading market (STTM). This gas market commenced on 1 September 2010 with hubs at Sydney and Adelaide, with a hub added at Brisbane on 1 December 2011. The project aimed to reduce the amount of missing, late or incorrect data submitted by STTM pipeline operators. Failure to provide timely and accurate information to the STTM can lead to inefficient pricing and market outcomes, resulting in random wealth transfers between participants.

Over the past two years, the AER’s work to improve data quality included: 

  • meeting with the Chief Executives of the four major pipeline operators to clarify their responsibilities
  • following up all data failures and reporting each failure publically
  • seeking commitments from industry participants to improve processes for providing data and following up on those commitments
  • commencing audits of STTM pipeline operators regarding compliance with the information and data obligations and
  • taking enforcement action, including issuing an infringement penalty.

The AER’s efforts to improve the quality of pipeline data, and companies’ positive response to those efforts, have led to a marked reduction in the number of STTM data errors. Following concerning levels of errors from market start, the AER is pleased to announce that there were no such errors in the final two quarters of 2012.

While this project is now closed, the AER will continue to monitor pipeline data through its regular compliance work to ensure future compliance, and the complementary process of auditing STTM facility operators will continue throughout 2013.

“The AER acts vigilantly and innovatively in its compliance and enforcement roles to ensure that energy market participants comply with the market rules. This project represents one of many successful initiatives carried out by the AER to improve compliance across the industry,” AER Chairman Andrew Reeves said.

The quarterly report also covers a range of other AER compliance activities, including: compliance matters for the Victorian gas market, such as the delayed publication of the ex post price by the Australian Energy Market Operator (AEMO); continued improvement in the quality of rebidding information submitted by electricity generators; and a compliance matter with respect to NSW electricity transmission investment. It also reiterates the importance of timely and accurate electricity generator availability data.

Issued date: 
26 February 2013
AER reference: 
NR 003/13