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ARTICLE · 12 JULY 2011

Powering down generators: The proposed Rule change to limit generator market power

DLA Piper Australia
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The AEMC will shortly commence Stage 2 of its consultation process.

AustraliaAntitrust/Competition Law
Brett McArthy
Brett McArthy
Leanne Hanna
Leanne Hanna
Alec White
Alec White

The AEMC will shortly commence Stage 2 of its consultation process regarding a proposed rule change to address potential generator market power in the NEM.

In summary, the proposal envisages:

  • Large generators being classified by the Australian Energy Regulator (AER) as 'dominant generators' above individually specified levels of demand.
  • When demand exceeds the specified level, the dominant generator would be required to offer all of its available capacity at prices not exceeding $300/MWh.

This article investigates:

  • the problem that the proposed rule change is designed to address
  • existing regulation of generators, including current proceedings AER v Stanwell Corporation Ltd (Stanwell) and AGL Energy Ltd v ACCC relevant to the interpretation of those regulations

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