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, which provides powers to the NSW Minister for Energy to issue directions to respond to the emergency. On 23 December 2022, the NSW Minister for Energy issued directions to NSW coal-fired power stations and coal suppliers. These directions were amended on 30 January 2023, and subsequently revoked and replaced with revised directions on 16 February 2023. The current directions are available on the NSW Gazette website.
AER appointed as regulator
On 13 February 2023, the NSW Minister formally appointed the AER as the regulator for the purposes of the directions. As regulator, the AER is tasked with monitoring compliance and enforcement of the directions to ensure NSW Coal Suppliers and Power Stations comply with direction and enable reporting on the impacts of the market interventions. To assist in this, we published two guidance notes to assist directed entities to understand their compliance obligations:
- Guidance note - NSW Coal miner compliance with coal market price emergency directions
- Guidance note - NSW Power station compliance with coal market price emergency directions
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 made in a form and manner approved by the AER. We are currently developing industry guidance for this, which we will publish in due course.