On 27 April 2017, SA Power Networks submitted to the AER a waiver application under clause 5.2 of the Electricity ring-fencing guideline 2016 (Guideline). The South Australian Government has asked SA Power Networks to undertake a project to set up and operate 200MW of temporary generation by 1 December 2017. The temporary generation will provide backup in the event of load shedding until the South Australian Government’s new permanent generator is operational. SA Power Networks submitted that the waiver is required in order to deliver this project by the proposed operational date without breaching the Guideline.
The AER’s draft decision proposes to grant SA Power Networks a waiver until 1 June 2020 from its obligations in relation to legal separation, separation of staff, offices and branding and the requirement to include ring‑fencing obligations in agreements with service providers, on condition that the generation capacity:
- is used only for the purpose of avoiding load shedding for NEM operational purposes when there is no alternative generation available
- is operated only at the direction of AEMO or the South Australian Energy Minister, and
- is fully funded by the South Australian Government, which also receives all revenues from the project.
Submissions from interested parties on SA Power Networks' application and our draft decision closed on Friday 9 June 2017.
On 21 June 2017, the AER decided to approve SA Power Networks' waiver application as summarized above. Our decision and reasons are available under 'Final decision'.