2015 Review of the declaration of raise contingency Frequency Control Ancillary Services as a declared electrical service
In response to concerns raised in 2009 about Hydro Tasmania's dominance of the Tasmanian energy generation market following Frequency Control Ancillary Services (FCAS) price spikes that occurred at that time, the Regulator conducted an FCAS investigation and made an FCAS price determination. The determination, the 2011 FCAS Price Determination, expires on 31 January 2016.
In accordance with Regulation 35 of the Electricity Supply Industry (Pricing and Related Matters) Regulations 2013 the Economic Regulator is required to invite submissions on whether the declaration of raise contingency FCAS as a declared electrical service should be retained or revoked. The invitation is to be made at least six months before the determination expires ie on or before 31 July 2015.
The Economic Regulator published a Consultation Paper on 27 April 2015 outlining the circumstances that, in the Economic Regulator's view, warranted the revocation of the declaration. The Economic Regulator invited submissions on the proposal.
Submissions on the Consultation Paper closed on 15 May 2015.
The Regulator received the following submissions: Hydro Tasmania - FCAS (179Kb) Major Energy Users Inc - FCAS (37Kb)
Additionally, prior to the publication of the Consultation Paper, Hydro Tasmania made a preliminary submission
to inform the Economic Regulator's proposal.
After considering the issues raised during consultation, the Regulator decided to revoke the declaration in accordance with section 40AD(4) of the Electricity Supply Industry Act 1995. The revocation of the declaration in respect of these electrical services takes effect from 1 February 2016 on the expiry of the determination. The Regulator will, however, continue to monitor raise FCAS pricing to ensure that regulatory action can be taken if evidence is found of inappropriate pricing behaviour.
The Economic Regulator published a Statement of Reasons on 24 June 2015 outlining the reasons for the revocation of the declaration and also published a Notice of Revocation in the Tasmanian Government Gazette.