The Australian Competition and Consumer Commission today issued its draft decision on transmission service standards in the national electricity market. The ACCC is proposing to quantify and report on the impact of transmission network constraints and outages in the NEM.
The ACCC proposes quarterly reporting of two measures of market impact:
- the marginal cost of constraints (the estimated change in costs if a constraint is relieved by 1 MW) and
- the total cost of constraints (the estimated cost of completely relieving any constraints).
"These measures will provide increased transparency about transmission network service provider's (TNSP's) quality of service performance", ACCC Commissioner, Mr Ed Willett, said.
"The measures are also a first step towards creating new incentives for TNSP's to take into account the impact of their decisions on the market.
"At the moment the ACCC has a service standard incentive scheme based on outages and circuit availability. TNSP's are rewarded for exceeding and penalised for underperforming against specified targets. The limitation of this measure is that the target events do not necessarily have an impact on the market.
"In its draft decision the ACCC is proposing a process to establish a new service standards scheme in which TNSP's regulated revenues will in part be linked to market outcomes.
"Establishing such incentives is complex and needs further work to ensure the right incentives can be designed. For this reason the ACCC is proposing to develop the incentive measures in conjunction with industry through the service standards working group. The service standards working group consists of representatives from generation, retail and transmission sectors of the NEM and includes user representation".
This draft decision has been prepared by the ACCC drawing on input and advice from the service standards working group.
The ACCC has called for interested parties to make submissions 1 September 2004, before it makes a final decision. The ACCC expects to issue its final decision in October 2004.