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This guidance note has been published by the AER to enable NSW 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. It describes how we will assess the Coal Supplier’s production costs, with details on the relevant cost categories and types of evidence that should be submitted. It also describes how we have defined and assessed a fair margin for the sector.

Section 8(3) of Part 2 of the Coal Market Price Emergency (Directions for Coal Mines) Notice 2023 states that a Coal Supplier’s application for a higher cap must be made, (i). in the form approved by the Regulator, and (ii) in the way decided by the Regulator. This form is included in the guidance note.

To accompany the guidance note, we have published a public report from Wood Mackenzie, commissioned by the AER, that provides an overview of coal production in NSW and identifies relevant factors to consider when assessing production costs and fair margin.