On 20 March 2025, the AEMC published a consultation paper that seeks stakeholder feedback on a proposal to establish a reliability standard in the east coast gas system (ECGS). The consultation paper arises from a rule change request submitted by Energy Ministers in July 2024, which noted that the implementation of a reliability standard and facilitated market settings would facilitate more timely, informed and efficient market-led responses to reliability and supply adequacy (RSA) threats in the ECGS and improve how the Australian Energy Market Operator (AEMO) currently exercises its RSA function in the ECGS.
This rule change is one of four proposed rule changes under the Stage 2 RSA reforms. Collectively, the rule changes seek to establish specific tools within the existing RSA framework for the ECGS. The other three rule change requests include:
- ECGS supplier of last resort mechanism
- ECGS notice of closure for gas infrastructure
- ECGS projected assessment of system adequacy
The rule change identifies that under current arrangements, inefficient decisions about how to respond to reliability supply adequacy threats over the short, medium and longer term, may be made by market participants, AEMO and policy makers. The costs of these inefficient decisions would ultimately be borne by gas consumers.
In response to this issue, the rule change recommends the AER establish a reliability standard for the ECGS that reflects the value gas customers place on reliability (VGCR) to allow gas market participants and AEMO make better informed decisions about the trade-offs between reliability costs and supply interruption costs. The AER would be responsible for developing a VGCR methodology and periodically reviewing the VGCR methodology and VGCR estimates.
The AER made a submission to the consultation paper on 12 May 2025.