Transmission Regulation and Pricing
As the principal Transmission Network Service Provider in South Australia, ElectraNet operates within the National Electricity Market (NEM).
The NEM operates within the framework of the National Electricity Rules, under joint legislation enacted by the participating States and Territories, and is overseen by three main market institutions:
- the Australian Energy Market Commission (AEMC), responsible for rule making and market development
- the Australian Energy Regulator (AER), responsible for economic regulation and rule enforcement
- the Australian Energy Market Operator (AEMO), responsible for market and power system operation.
There is a strong governance structure in place that separates these distinct functions and provides for independent decision-making with clear accountabilities and objectives, together with appropriate checks and balances.
In line with the National Electricity Rules (NER), ElectraNet provides three transmission service categories:
Prescribed Transmission Services
Prescribed transmission services are subject to revenue regulation under the NER. ElectraNet provides these services within our revenue cap. Prescribed transmission services include shared transmission network services to industrial-load customers as well as connection services provided to South Australia’s electricity distributor, SA Power Networks.
Negotiated Transmission Services
Negotiated transmission services are usually provided by ElectraNet to a single or small group of direct-connect customers for substation connection services. These services often relate to traditional and renewable generation or industrial-load customers. They are negotiated in accordance with ElectraNet’s Negotiating Framework, which is required by the NER, and approved by the Australian Energy Regulator (AER).
Non-Regulated (Contestable) Transmission Services
Non-Regulated transmission services are services that ElectraNet is not obliged to provide and which are able to be provided on a contestable basis by a range of suppliers. These transmission services are not regulated by the NER. ElectraNet’s non-regulated transmission services include operations and maintenance services for privately-owned transmission lines, and connection-related services between ElectraNet substations and customer sites.
Other regulations and schedules that apply to transmission services include:
The formal documentation required to facilitate a negotiated transmission connection is a matter of completing three steps.
- Connection Enquiry – Your initial enquiry to apply for a Negotiated Transmission Service.
- Application to Connect – The information we require in order to progress your application to the National Electricity Market and South Australian Transmission Network.
- Transmission Connection Agreement (TCA) – This final step is negotiated in line with ElectraNet’s Negotiating Framework.
Following your initial enquiry and preliminary meetings and planning (steps 1 and 2), formal negotiations with potential applicants for negotiated transmission services are undertaken in line with ElectraNet’s Negotiating Framework.
Our Negotiating Framework sets out the procedures that need to be followed to arrange a Transmission Connection Agreement. It also details the terms and conditions that need to be met by potential applicants in order to access ElectraNet’s regulated high-voltage transmission network. This Negotiating Framework is required by the National Energy Rules and has been approved by the Australian Energy Regulator.
ElectraNet allocates costs between the three transmission service categories in line with the NER and the AER’s Cost Allocation Guidelines for Transmission Network Service Providers (TNSP).
ElectraNet’s Current Cost Allocation Methodology was approved by the AER on 1 September 2008.
The AER approved a new Prescribed Transmission Pricing Methodology for the calculation of prescribed transmission prices from 1 July 2015.
ElectraNet determines prescribed transmission service prices to recover the costs of providing these regulated services in South Australia. As the coordinating network service provider for the South Australian region, ElectraNet also recovers revenue on behalf of the owners of the MurrayLink interconnector.
Prescribed transmission service prices to network customers are subject to significant volatility from year to year due to settlements residue related receipts, and other issues. We are required to adjust our prices for these factors in subsequent years to eliminate over or under recoveries.
The current Transmission Service Price Schedule for prescribed transmission services applies from 1 July 2016 to 30 June 2017. A new Transmission Service Price Schedule will apply from 1 July 2017 to 30 June 2018.
Transmission Service Price Schedules are required to be published each year by 15 March or the next business day.
In accordance with the National Electricity Rule clause 6A.29 and the AER’s Pricing Methodology Guidelines (17 July 2014), ElectraNet is required to publish on its website, by 15 February each year, the modified load export charges (MLEC) payable for the following financial year for use of the South Australian transmission network by adjacent regions.
2017/18 Financial Year
For the 2017/18 financial year, ElectraNet has calculated the MLEC amount payable by the Australian Energy Market Operator (AEMO) – Victoria to ElectraNet.
This charge is calculated in compliance with:
- NER clause 6A.29A
- the AER’s Pricing Methodology Guidelines (17 July 2014) and
- the Inter-regional Transmission Charging (IR-TUOS) attachment to ElectraNet’s 2015-2018 Proposed Amended Pricing Methodology which was submitted to AER for approval on 27 February 2015.
The MLEC amount stated below is provided in fulfilment of all relevant regulatory obligations:
Connection point revenue to be recovered from the connection point for 2017/18 financial year – MLEC payable by AEMO-Victoria $283,102.
ElectraNet’s Proposed Amended Pricing Methodology is available from the AER’s website.