The Australian Energy Market Commission have recently called for submissions on a second draft determination to introduce new rules governing how generators sell electricity into the wholesale market.
The proposed rules would address the deliberate withholding of information from the market through late rebidding. Under these rules, generators would be required to make any change to their offers to supply electricity as soon as possible after circumstances change.
Where an enforcement action is brought, the proposed rules would provide a court with a clear standard of conduct on rebidding and allow it to consider patterns of conduct such as deliberate and systematic late rebidding by generators.
Overall, the change to the rules would mean more timely and reliable information would be available to market participants, encouraging greater confidence in the market. This in turn should mean more efficient prices for hedging contracts and more efficient price outcomes generally for consumers.
In addition, the rules would require generators to keep records of the reasons for last minute price rebids so they can explain their actions to the Australian Energy Regulator (AER) on request.
These proposed rules represent a measured approach to late rebidding, taking into account the materiality of the problem of deliberate withholding information from the market.
The Commission is seeking submissions on the second draft determination from interested stakeholders. A consultation period of six weeks means submissions are due on 29 October, with a final determination scheduled for 10 December this year.