2020 Energy Price Limits Review

Background

In accordance with clause 6.20.6 of the Wholesale Electricity Market (WEM) Rules, AEMO commissioned a review of the Energy Price Limits for the Wholesale Electricity Market (WEM) in the South West Interconnected System. 

In conducting its review, AEMO may propose revised values for the Maximum Short Term Energy Market (STEM) Price and the Alternative Maximum STEM Price and must calculate the proposed values using the methodology set out in clause 6.20.7 of the WEM Rules.

AEMO engaged Marsden Jacob Associates Pty Ltd (Marsden Jacob), an independent consultant, to assist AEMO with modelling, analysis and preparing the required documentation for the annual review of the Energy Price Limits for 2020-21.

Enquiries may be made by email to wa.operations@aemo.com.au.

Public consultation and submissions

Marsden Jacob prepared a draft report proposing revised Energy Price Limits for 2020-21. AEMO published this first draft report on 9 April 2020 for a public consultation period that was scheduled to close on 21 May 2020.

The initial analysis and modelling were completed in March 2020 when the impacts of COVID-19 were minor and not well understood. Marsden Jacob completed further analysis and modelling to consider the impacts of COVID-19 particularly in relation to fuel prices and prepared a revised draft report proposing changes to the previous proposed value for the Alternative Maximum STEM Price.

AEMO published a revised draft report on 21 May 2020 and extended the public consultation period.

In accordance with clauses 6.20.9 and 6.20.9A of the WEM Rules, AEMO requested all sectors of the Western Australian energy industry, including end-users, to make submissions on the draft report by 5:00 PM (AWST) on Friday 12 June 2020. 

AEMO received 3 submissions.

Public Workshop

AEMO held a public workshop by teleconference from 1:00 PM to 2:00 PM (AWST) on Wednesday 6 May 2020. The objective of the workshop was to discuss the first draft report.

Approval

After considering feedback and submissions on the draft report, AEMO proposed final revised values for the Energy Price Limits for 2020-21. On 21 July 2020, AEMO submitted those values in its final report, including the submissions received, to the Economic Regulation Authority (ERA) for approval.

n accordance with clause 6.20.11 of the WEM Rules, a proposed revised value for any Energy Price Limit replaces the previous value after the ERA has approved that value in accordance with clause 2.26; and AEMO has posted a notice on the Market Web Site of the new value, with effect from the time specified in AEMO’s notice.

AEMO will publish the revised values once they have been approved.