The approvals that the Regulator is required to make under section 43G of the Electricity Supply Industry Act 1995, which relate to certain financial risk contracts that must be offered by Hydro Tasmania, are effected through the Wholesale Contract Regulatory Instrument issued by the Regulator.
The legislation does not allow the Regulator to change the approvals in
the Instruments. The Regulator can only
make or revoke approvals. Prior to making
or revoking an approval the legislation requires the Regulator, to conduct a
pricing investigation to provide information to enable the Regulator to
determine where to make or revoke an approval.
Wholesale Contract Regulatory Instrument pricing investigation (February 2021)
Release of the Wholesale Contract Regulatory Instrument and Final Investigation Report
On 18 March 2021, the Regulator finalised its investigation and published a new Wholesale Contract Regulatory Instrument, which took effect on 19 March 2021. The Regulator also released its Revocation of Approvals and Final Investigation Report in relation to its pricing investigation.
The approvals and new Instrument are in effect for the period 19 March 2021 to 30 June 2024.
Notice of intention to conduct a pricing investigation and release of consultation paper
From 1 October 2021 the National Electricity Rules will require five-minute settlement periods for spot prices in the National Electricity Market. This change affects regulated contracts.
The Regulator conducted a pricing investigation in September 2019 and made new approvals which are contained in the Instrument which took effect on 1 October 2019. The Regulator conducted another investigation to address additional issues identified with the change to five-minute settlement periods.
The Regulator issued a Notice Of Pricing Investigation and issued a Consultation Paper.
Consultations closed on 28 February 2021. A submission was received from Aurora Energy.
Wholesale Contract Regulatory Instrument pricing investigation (September 2019)
Release of the Wholesale Contract Regulatory Instrument and Final Investigation Report
The approval and new Instrument is in effect for the period 1 October 2019 to 30 June 2024.
Notice of intention to conduct a pricing investigation and release of consultation paper
From 1 July 2021 the National Electricity Rules will require 5 minute settlement periods for spot prices in the National Electricity Market. This change will impact on regulated contracts.
The Regulator conducted a pricing investigation in late June 2019 and made new approvals which are contained within a new Instrument and which provided an interim solution to this issue. The Regulator subsequently conducted another investigation to identify and implement a longer-term solution. The investigation was limited to addressing this single issue.
No submissions were received in response to the Consultation Paper. However, there was consultation with all relevant market participants during the investigation.
Wholesale Contract Regulatory Instrument Pricing Investigation (July 2019)
Release of the Wholesale Contract Regulatory Instrument and Final Investigation Report
The new Instrument is in effect for the period 2 July 2019 to 30 June 2024.
Notice of intention to conduct a pricing investigation and Consultation Paper
The change in the National Electricity Rules to a 5 minute settlement period in the electricity spot market from 1 July 2021 meant that the new arrangements were not consistent with the approval and declaration made by the Economic Regulator on 30 November 2017.
The objective of the investigation was to inform the Economic Regulator whether or not to revoke the approvals made on 30 November 2017 (as set out in the Instrument effective from 1 December 2017), and whether or not to make new approvals
No submissions were received in response to the Consultation Paper. However, there was consultation with all relevant market participants during the investigation.
Wholesale Contract Regulatory Instrument Pricing Investigation (November 2017)
Release of the Wholesale Contract Regulatory Instrument and Final Investigation Report
The Wholesale Contract Regulatory Instrument is in effect for the period 1 December 2017 to 30 June 2024.
Release of the Wholesale Contract Regulatory Instrument and Final Investigation Report
An issue was identified with the operation of the Wholesale Contract Regulatory Instrument (the Instrument). Depending on market conditions in Victoria, there was potential for the Instrument to calculate negative prices for regulated baseload cap contracts in Tasmania. This potential was subsequently realised with negative regulated baseload cap prices being calculated during November 2017. Such an outcome was considered inconsistent with the underlying intent of the Instrument to deliver regulated contract prices that are broadly reflective of competitive market outcomes.
To correct this issue, the Regulator decided to conduct a pricing investigation to revoke the existing Instrument and make a new Instrument and on 9 November 2017 issued a
notice of intention to conduct a pricing investigation in relation to the Instrument and issued a
Consultation Paper. Consultation closed on 23 November 2017.
Submissions were received from:
Wholesale Contract Regulatory Instrument Pricing Investigation (March 2017)
Release of the Wholesale Contract Regulatory Instrument and Final Investigation ReportOn 23 March 2017, the Regulator finalised its review and published the
Wholesale Contract Regulatory Instrument, which took effect on 24 March 2017. The Regulator also released its
Final Investigation Report in relation to its Wholesale Contract Regulatory Instrument Pricing Investigation.
The Wholesale Contract Regulatory Instrument is in effect for the period 24 March 2017 to 30 June 2024.
Draft Report Following the completion of the Regulator's pricing investigation in December 2016, an inconsistency, originating from the commencement of the Instrument made on 6 November 2013, was identified between the Instrument and the wholesale pricing model which gives effect to the approved pricing methodology set out in the Instrument.
To correct this inconsistency the Regulator decided to conduct another pricing investigation to revoke the existing Instrument and make a new Instrument.
On 2 March 2017, the Regulator announced its intention to conduct an investigation and released a Consultation Paper inviting interested parties to make a submission. Consultation closed on 16 March 2017.
Submissions were received from:
Aurora Energy Wholesale 2017 (216Kb)
Hydro Wholesale 2017 (210Kb)
Wholesale Contract Regulatory Instrument Pricing Investigation (December 2016)
Final Versions of the Wholesale Contract Regulatory Instrument, Electricity Wholesale Contract Guideline and Statement of Regulatory Intent
On 21 December 2016, the Regulator finalised its review and published final versions of the Wholesale Contract Regulatory Instrument, Electricity Wholesale Contract Guideline, and Statement of Regulatory Intent. The Regulator also released its Final Investigation Report in relation to its Investigation.
The Wholesale Contract Regulatory Instrument was in effect for the period 1 January 2017 to 24 March 2017 when it was revoked following the 2017 Investigation.
Draft versions of the Wholesale Contract Regulatory Instrument, Draft Electricity Wholesale Contract Guideline and Statement of Regulatory Intent
On 21 October 2016, the Regulator released, for public consultation, drafts of each of the Wholesale Contract Regulatory Instrument, Electricity Wholesale Contract Guideline and Statement of Regulatory Intent. The Regulator also prepared a Consultation Paper to assist interested parties in making submissions. Submissions closed on 11 November 2016.
Submissions were received from:
Aurora Energy Wholesale Draft 2017 (831Kb)
Hydro Tasmania Wholesale Draft 2017 (323Kb)
Draft Report
On 19 August 2016, the Regulator released its Draft Report on the Review of the Wholesale Contract Regulatory Instrument.
The Regulator invited public submissions on the Draft Report and submissions closed on 23 September 2016.
Submissions were received from:
Aurora Energy Wholesale Draft2016 (1Mb)
Hydro Tasmania Wholesale Draft 2016 (493Kb)
The submissions were considered before drafts of each of the Wholesale Contract Regulatory Instrument, Wholesale Contract Guideline and Statement of Regulatory Intent were released for public consultation on 21 October 2016.
The Wholesale Contract Regulatory Instrument was intended to be in effect for the period 1 January 2014 to 31 December 2018.
Under Regulation 21 of the Electricity Supply Industry (Pricing and Related Matters) Regulations 2013 (the Pricing Regulations) the Regulator is required to conduct a pricing investigation prior to making or revoking an approval. Further, the pricing investigation must be conducted prior to the expiry of the existing approval made by the Minister under Regulation 20(1) of the Pricing Regulations (31 December 2018).
While the pricing investigation was required to be completed before the expiry of the existing Instrument on 31 December 2018, completing the investigation and making the necessary approvals well before the Instrument's expiry date was intended to provide market participants with as much certainty as possible. In finalising the pricing investigation before the end of 2016 the Regulator was also responding to concerns raised by market participants about the potential impact on their respective forward contracting activities in the event that the approvals were made closer to the expiry date of the existing Instrument.
Notice of intention to conduct a pricing investigation
Following consideration of the issues raised during consultation, the Regulator announced its intention, to conduct a pricing investigation in relation to the Wholesale Contract Regulatory Instrument.
Issues Paper
In December 2015, the Regulator released an Issues Paper to provide context for, and stimulate discussion about, the scope of its proposed pricing investigation in relation to the Review of the Wholesale Contract Regulatory Instrument and called for submissions from interested parties. Submissions closed on Friday 22 January 2016 and one late submission was accepted.
Submissions were received from:
Aurora Energy Wholesale Issues 2015 (423Kb)
Tasmanian Small Business Council Wholesale Issues 2015 (171Kb)
Hydro Tasmania Wholesale Issues 2015 (553Kb)
ERM Business Energy Wholesale Issues 2015 (313Kb)