The Australian Energy Regulator (AER) has published a draft System Security Network Support (SSNS) Payment Guideline (the Guideline) for consultation. This Guideline sets out how the AER will determine whether proposed SSNS expenditures in draft contracts are likely to result in prudent and efficient expenditures.
The Guideline assists transmission network service providers (TNSPs) to better understand how they can apply for AER review of significant draft SSNS contracts by providing guidance on the nature of the AER’s determination, the criteria we must have regard to, the process we will follow, and the type of information we may consider.
Have your say
We invite stakeholders to provide written submissions on our draft SSNS Payment Guideline.
We prefer to make submissions publicly available to facilitate an informed and transparent consultative process. We will treat written submissions as public documents unless otherwise requested.
Stakeholders should email any comments or written submissions to anthony [dot] weir
AER [dot] gov [dot] au (anthony[dot]weir[at]AER[dot]gov[dot]au) by close of business on Wednesday 30 October 2024.
The AER will consider stakeholder feedback in developing the final Guideline, which must be published by 1 December 2024.
Background
The Improving Security Frameworks for the Energy Transition Rule Change (the ISF Rule) published on 28 May 2024, changes the way TNSPs recover the costs of SSNS payments made for system security services. System security services include system strength, inertia, and network support and control ancillary services typically provided by a synchronous generator or battery to ensure the power system is secure as we transition to more renewable generation.
In addition to introducing a revised method for forecasting and recovering TNSP expenditures for SSNS services through a new annual transmission pricing process and revisions to the AER’s existing ex-post network support payment (NSP) pass through process, the ISF Rule:
- allows (but does not require) TNSPs to seek an ex-ante AER review that proposed expenditure for a SSNS payment, or a methodology for such a payment (as set out in a draft contract between the TNSP and SSNS provider (e.g. a generator or battery)) will likely be prudent and efficient (i.e. consistent with the operating expenditure objectives, criteria and factors, and amended NSP pass through factors)
- requires the AER to publish a guideline by 1 December 2024, setting out a process for the AER to undertake these ex-ante reviews on the prudency and efficiency of expenditure in significant draft SSNS payment contracts.
Enabling TNSPs to seek an AER review of significant draft contracts should improve TNSPs’ confidence in their ability to recover efficient costs for these services, thereby improving the efficiency of the contracting process and helping to level the playing field between network and nonnetwork solutions to meeting their system security requirements.