Transmission use of system – pricing methodology (Victoria)

16/09/2020
Market Network Service Provider
StageDiscussion Paper
ConvenorAEMO NSP
Initiated16/09/2020
Accepting submissions?Yes
Submissions close29/09/2020

Notice of initial stage of consultation

National Electricity Rules

Date of Notice: 16 September 2020

This notice informs stakeholders and all other interested parties (Consulted Persons) that AEMO is commencing its consultation on the amendments to the Approved Amended Pricing Methodology for Prescribed Shared Transmission Services for 1 July 2014 to 30 June 2019.

This consultation is being conducted under clause S6A.4.2(f) of the National Electricity Rules (NER) which requires AEMO to, as and when required by the AER, “submit to the AER (1) a proposed pricing methodology (PM) relating to shared transmission services that are prescribed TUOS services or prescribed common transmission services.

What does the PM cover?

Clause S6A.4.2(f) limits the PM to shared transmission services that are prescribed TUOS services or prescribed common transmission services

This means that in terms of the annual allowable revenue that AEMO is permitted to recover, the PM allows recovery of costs that are in the nature of prescribed TUOS services costs and prescribed common transmission services

AEMO intends to develop the PM in consultation with stakeholders prior to submitting it to the AER for its consultation process. When approved, the new PM will apply from 1 July 2022 for a period of 5 years.

The PM covers the way in which recoverable costs (revenue) are to be recovered from each network user (connection point). Consequently it deals with how allowable revenue is distributed to network users in terms of the three types of prices chargeable at each connection point (locational, non-locational and common service). 

The costs that make up the revenue that is recovered by AEMO is dealt with in the Revenue Methodology. The delineation is shown in the diagram below.

Enforceable Undertaking 

The current Pricing Methodology nominally ended on 30 June 2019 but its validity has been extended to 30 June 2021 and is in the process of being further extended until 30 June 2022 to allow time for both AEMO and the AER to conduct their consultations.

The Consultation Process 

The consultation process is outlined below. Dates are indicative and subject to change. 

Process stage Date
 Initial consultation (Issues paper)  Submissions due by 5pm 29 September 2020
Issue consultation paper & engage stakeholders 26 October – 27 November 2020
Feedback to stakeholders 8 February 2021
Submit proposed PM to AER May 2021

Pricing Methodology Forum

AEMO would like to hold a virtual stakeholder forum. Further information regarding agenda, options for dates will follow shortly.

Invitation to Make Submissions and Publication

AEMO invites written submissions on the Issues Paper and in particular, provide answers to the questions raised. AEMO also invites stakeholders to raise any other issues related to the subject matters relevant to the Pricing Methodology that should be debated.
All submissions will be published on AEMO’s website, other than confidential content.

If relevant, please identify any parts of your submission that you wish to remain confidential and explain why. AEMO may still publish that information if it does not consider it to be confidential but will consult with you before doing so.  

Please note that material identified as confidential may be given less weight in the decision-making process than material that is published. 

Closing Date and Time 

Submissions in response to this Issues Paper should be sent by email to pricing.methodology@aemo.com.au to reach AEMO by 5.00pm (Melbourne time) on 29 September 2020

All submissions must be forwarded in electronic format (both pdf and Word). Please send any queries about this consultation to the same email address.  

AEMO is not obliged to consider submissions received after the closing date and time. However, it retains the right to do so at its absolute discretion. 

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