As part of its functions, the Australian Energy Market Operator (AEMO) is a Victorian electricity transmission network service provider. Its next five-year (2022–27) regulatory control period commences on 1 July 2022 to 30 June 2027. Under the National Electricity Rules, AEMO is required to submit its 2022–27 proposed pricing methodology as and when required by the AER.
On 19 April 2021 AEMO submitted its proposed pricing methodology to the AER for the 2022–27 regulatory control period.
On 12 October 2021 we released our draft decision on AEMO's transmission revenue determination for the 2022–27 period.
On 14 December 2021 AEMO submitted its revised proposal for the 2022–27 regulatory control period.
On 29 March 2022, the AER approved AEMO’s proposed Undertaking under section 59A of the National Electricity Law to calculate prices for shared transmission services in accordance with the terms of its revised proposed pricing methodology for the 2022–27 regulatory control period, for the period commencing 1 July 2022 and ending on 30 June 2023. We note AEMO’s revised pricing methodology accepts all aspects of the AER’s draft decision.
On 29 April 2022 we published our final decision on AEMO's transmission revenue determination for 2022–27.
Background
On 1 April 2014 the AER made its final decision approving a pricing methodology and negotiating framework for AEMO's 2014–19 regulatory control period and specifying a negotiated transmission service criteria.
On 12 June 2019 AEMO submitted an Undertaking to the AER under section 59A of the National Electricity Law to continue to set prices for shared transmission services as per the pricing methodology already approved for the period 1 July 2014 to 30 June 2019. This would allow AEMO more time to consider the impact on transmission network services and prices of the many recent changes to the way in which electricity is produced, supplied and consumed in the Victorian declared shared network and across the National Energy Market. The AER approved AEMO’s proposed Undertaking to apply to 30 June 2021. In June 2020, AEMO proposed to extend this Undertaking by an additional year due to the disruption caused by COVID-19. Consistent with the Undertaking the approved pricing methodology for the 2014–19 regulatory control period will apply until 30 June 2022.
Updates
On 31 January 2023, the AER published its final decision on transmission pricing methodologies with amendments for system strength pricing (approved amended pricing methodology). The approved amended pricing methodology supersedes the pricing methodology approved in the AER’s 29 April 2022 final determination. All other aspects of the determination remain as per the AER’s 29 April 2022 final determination.