Provide feedback on the effectiveness of the EGRS to stakeholders as part of the Ministers Report

1. 2014 Reports to
the Minister Markets Team
Ken Michael Room, 25 September 2014
Ensuring quality services for a reasonable price 1
Workshop

2. Ensuring quality services for a reasonable price 2
Markets Team
Bruce Layman Elizabeth Walters
Jeremy Cook
Natalie Jackson
Holly Medrana
Shibli Khan

3. Purpose of this
workshop
1. Wholesale Electricity
Market
2. Electricity Generation and
Retail Corporation
Regulatory Scheme
Ensuring quality services for a reasonable price 3
to be considered in preparation of Discussion Papers.
Stakeholder feedback on the
effectiveness of:

4.  EMR
 Review of WEM - Overview of ERA Requirements
 Considerations from 2013 Report to Minister
 Workshop
 The EGRC Regulatory Scheme
 Overview of ERA’s Requirements
 Workshop
Ensuring quality services for a reasonable price 4
Workshop: Content and Process
9:00am to
10.45am
10:45am to
11:00am:
Break
11:00am to
12:00pm

5. Ensuring quality services for a reasonable price 5
Process
Today October
November/
December
Early
2015
Preliminary
workshop
Individual
meetings
Discussion Paper
and Public
Consultation
Reports provided
to Minister

6. Follow up
 Request a meeting
 Issues for consideration
 Feedback for future
engagement
Ensuring quality services for a reasonable price 6
Handouts:

7.  Addresses matters ERA has
raised for a number of years
 Industry structure –government
ownership
 Market Governance
 Reserve Capacity Mechanism
 Constrained network access
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Electricity
Market
Review: ERA
Submission

8.  Perspective- ERA Review
based on market as is
 Not duplicate EMR
 Recognise market likely to
be modified
 Adapt focus
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Electricity Market
Review
Implications for
ERA Review

9. 2014 Review of
Wholesale Electricity
Market
 Triennial WEM Report
 2014 Annual WEM Report
to the Minister
Ensuring quality services for a reasonable price 9
Incorporates:

10. Ensuring quality services for a reasonable price 10
ERA’s review
Assess the effectiveness of the market in
achieving the Market Objectives
Investigate market behaviour if it has
resulted in the market not functioning
effectively
Make recommendations for increasing the effectiveness of the
market

11. Ensuring quality services for a reasonable price 11
 promote the economically efficient, safe and reliable production and
supply of electricity and electricity related services in the SWIS;
 encourage competition among generators and retailers in the SWIS,
including by facilitating efficient entry of new competitors;
 avoid discrimination in that market against particular energy options
and technologies, including sustainable energy options and
technologies such as those that make use of renewable resources or
that reduce overall greenhouse gas emissions;
 minimise the long-term cost of electricity supplied to customers from
the SWIS
 encourage the taking of measures to manage the amount of electricity
used and when it is used.
Market Objectives

12. Ensuring quality services for a reasonable price 12
Specific requirements for report
Summary of data and analysis compiled by the IMO and ERA
Assess effectiveness of each aspect of the market including
the effectiveness of the IMO and System Management in
carrying out their functions
Assessment of specific events, behaviour, matters that
impacted effectiveness of market
Recommend measures for increasing the effectiveness of the
market

13. Ensuring quality services for a reasonable price 13
 Reserve Capacity market
 Market for bilateral contracts for capacity
and energy
 The STEM
 Balancing
 Dispatch process
 Planning processes
 Administration of the market, including
Market Rule change process
 Ancillary Services
Elements of Market
required to be
reviewed

14.  Performance of “new”
Balancing and LFAS
markets
 Bidding behaviour
 SRMC requirements
 Constraint payments
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Considerations
from 2013 Report
to the Minister
Matters flagged for further
review:

15. Proportion of Capacity offered in Price Ranges by quarter and quarterly Average
Peak and Off-Peak Balancing Price

16. Your Views
Ensuring quality services for a reasonable price 16

17. Break
Return for:
2014 Review of EGRC Regulatory
Scheme
Ensuring quality services for a reasonable price 17

18.  First annual review of EGRC
Regulatory Scheme.
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2014 Review of
EGRC Regulatory
Scheme

19. Ensuring quality services for a reasonable price 19
Comprises:
 The EGRC Regulations
 The Segregation and Transfer Pricing
Guidelines
 The (Standard Product) Wholesale
Arrangements
The EGRC Regulatory
Scheme

20. Ensuring quality services for a reasonable price 20
ERA’s requirements
Review effectiveness of operation of Scheme at
least annually and make recommendations for
improvement,
Also required to investigate any non-compliance
identified by the Auditor General.

21. Ensuring quality services for a reasonable price 21
Scheme Aims to:
 ensure Synergy does not unduly
preference RBU and GBU over third
party retailers & generators;
 provide private sector access to
electricity on non-discriminatory terms;
 mitigate concerns of private-sector
market participants.
Aims of EGRC
Regulatory Scheme

22. Ensuring quality services for a reasonable price 22
Segregation into business units
 Transfer pricing
 Ring fencing
Wholesale trading
 no discriminating between RBU and competitors
 no taking into account financial interests of RBU
 Wholesale Electricity Supply Policy & Wholesale Energy Credit Policy
 Standard Products - price notionally paid by RBU for equivalent
product
Compliance Regime
 AG audits and Authority investigates and enforces
Components of
Scheme

23. Ensuring quality services for a reasonable price 23
Test against:
 Does it ensure Synergy does not unduly
preference RBU and GBU over third party retailers
& generators;
 Does it provide private sector access to electricity
on non-discriminatory terms;
 Does it mitigate concerns of private-sector market
participants.
 Complexity and cost
 Practical experience
How to assess?

24. Your Views
Ensuring quality services for a reasonable price 24

25. Level 4, Albert Facey House
469 Wellington Street
Perth WA 6000
www.erawa.com.au
(08) 6557 7900
Ensuring quality services for a reasonable price 25
Economic
Regulation
Authority
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