Electricity Market Reform – legislative delay

WEM Information

Nov 15
Electricity Market Reform – legislative delay

Social media is reporting that key Bills, central to intended reforms identified in the Electricity Market Reform, will not pass through either house during the final weeks of the current Parliament prior to it going into ‘caretaker mode’ in preparation for the State Election in March 2017.

If the current Government is returned then the EMR programme will continue, albeit with some adjustment to internal timetables.  If the Government is not returned then the position is less clear, as Labour has not, to date, outlined it’s position on the EMR.

Practically, this means virtually no change to regulated gas network companies, who will continue to be regulated by the Economic Regulation Authority (ERA).  The Wholesale Electricity Market will continue to operate under the current WEM Rules.  However, Market Participants eager to understand operational market changes recommended by the EMR, the impact and cost of new processes and trading systems will now have to wait until after the election to understand what changes, if any, will be made to the intended reforms and when and how this will again impact their operating practices.

Most effected by this situation is Western Power.  The PUO states that ‘it was intended that these Bills would be passed by late November 2016 to allow Western Power to commence the regulatory process under the national regulatory framework from December 2016 and for the Australian Energy Regulator’s determination to apply from 1 July 2018‘.   Now, with the Bills not passing in time, the Western Power will continue being subject to the current State-based regulatory framework in accordance with the Electricity Networks Access Code 2004 (Access Code), with review and approval managed by the ERA.

There are some timing difficulties associated with this and the Minister for Energy is proposing to make amendments to the Access Code to allow Western Power’s next access arrangement review within the current regulatory framework to occur in a timely manner. A consultation paper has been released by the PUO to enable public consultation on the proposed amendments. Submissions on the proposed amendments are due by 12 December 2016.