ACCC issues paper on Murraylink conversion application

The Australian Competition and Consumer Commission today issued an issues paper in relation to the Murraylink Transmission Company's application to convert the Murraylink electricity interconnector from its status of an unregulated market network service to become a regulated network service.

"The code gives the ACCC discretion to decide whether a market network service should be converted to regulated status, but does not establish specific criteria for assessing such applications", Mr Ed Willet, ACCC Commissioner responsible for energy matters, said today. "Conversion would guarantee regulated revenues to MTC paid by electricity consumers. Alternatively, MTC revenues would be determined by the operation of the National Electricity Market. It is also the first application of its kind to be submitted to the ACCC.

"The issues paper aims to provide interested parties with guidance on the ACCC's views on its proposed approach for assessing MTC's application, given the absence of criteria in the code. The paper also seeks to facilitate discussion on key issues such as the opening asset value for the determination of transmission revenues".

The ACCC invites interested parties to consider and comment on the issues paper, in conjunction with MTC’s application, and the reports by consultants engaged by the ACCC. All documents are available on the ACCC's website.

Comments provided by interested parties will be considered in the ACCC's draft decision. The ACCC will consult with interested parties on its draft decision before issuing a final decision. An indicative timetable for the ACCC's assessment process is also available on the ACCC's website.

Background

Murraylink is a 180 kilometre transmission cable that links the South Australian and Victorian electricity grids. It currently operates as a market network service, which enables MTC to earn revenues from bidding Murraylink's transmission capacity into the NEM spot market. MTC now seeks to convert Murraylink's status under the code from a market network service to a prescribed network service. If the ACCC accepts MTC’s application, MTC will be eligible to receive a maximum allowable revenue, which would also be determined by the ACCC.