The Australian Competition and Consumer Commission has issued its final determination for authorisation of changes to the National Electricity Code to deal with procedures for conducting settlements residue auctions.
The purpose of the settlement residue auction process is to provide participants in the National Electricity Market with access rights to inter-regional hedges to specified portions of the settlements residue. The settlements residue can be used to hedge price risks associated with inter-regional trade in electricity.
The code changes provide for NEMMCO to develop auction rules within specified criteria and, to conduct the auction process in accordance with these rules.
The code changes also give NEMMCO broad powers to:
- set criteria for eligibility to participate in the auction process; and
- set reserve prices in relation to each block of settlement residue sold.
"The proposal to auction settlements residue will facilitate the development of inter-regional hedging solutions which will enhance inter-regional trade in the National Electricity Market. The facilitation of national competitive trading in electricity is important to ensure that the full benefits of the National Electricity Market are realised." ACCC Chairman, Professor Allan Fels, said today.
"Whilst the ACCC has largely accepted the proposed amendments to the Code the determination does set out a number of conditions. These conditions mainly deal with the rules governing eligibility to participate in the auction process and are designed to address concerns that some market participants may be able to influence the settlements residue."
Copies of the ACCC's final determination is available on the ACCC web site: http://www.accc.gov.au or from Ms Maxine Helming on telephone (02) 6243 1246.
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