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Ensuring Quality Services for a Reasonable Price: Workshop 2014 Reports

This workshop highlights the stakeholder feedback and discusses the effectiveness and requirements of the Wholesale Electricity Market and the Electricity Generation and Retail Corporation Regulatory Scheme.

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Ensuring Quality Services for a Reasonable Price: Workshop 2014 Reports

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  1. Workshop 2014 Reports to the Minister Markets Team Ken Michael Room, 25 September 2014 Ensuring quality services for a reasonable price1

  2. Markets Team Elizabeth Walters Bruce Layman Natalie Jackson Shibli Khan Jeremy Cook Holly Medrana Ensuring quality services for a reasonable price2

  3. Stakeholder feedback on the effectiveness of: Purpose of this workshop Wholesale Electricity Market Electricity Generation and Retail Corporation Regulatory Scheme to be considered in preparation of Discussion Papers. Ensuring quality services for a reasonable price3

  4. Workshop: Content and Process • EMR • Review of WEM - Overview of ERA Requirements • Considerations from 2013 Report to Minister • Workshop 9:00am to 10.45am 10:45am to 11:00am: Break • The EGRC Regulatory Scheme • Overview of ERA’s Requirements • Workshop 11:00am to 12:00pm Ensuring quality services for a reasonable price4

  5. Process Today October November/ December Early 2015 Preliminary workshop Individual meetings Discussion Paper and Public Consultation Reports provided to Minister Ensuring quality services for a reasonable price5

  6. Handouts: Follow up Request a meeting Issues for consideration Feedback for future engagement Ensuring quality services for a reasonable price6

  7. Electricity Market Review:ERA Submission Addresses matters ERA has raised for a number of years Industry structure –government ownership Market Governance Reserve Capacity Mechanism Constrained network access Ensuring quality services for a reasonable price7

  8. Electricity Market Review Implications for ERA Review Perspective- ERA Review based on market as is Not duplicate EMR Recognise market likely to be modified Adapt focus Ensuring quality services for a reasonable price8

  9. Incorporates: 2014 Review of Wholesale Electricity Market Triennial WEM Report 2014 Annual WEM Report to the Minister Ensuring quality services for a reasonable price9

  10. Assess the effectiveness of the market in achieving the Market Objectives ERA’s review Investigate market behaviour if it has resulted in the market not functioning effectively Make recommendations for increasing the effectiveness of the market Ensuring quality services for a reasonable price10

  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 Ensuring quality services for a reasonable price11

  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 Ensuring quality services for a reasonable price12

  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 Ensuring quality services for a reasonable price13

  14. Matters flagged for further review: Considerations from 2013 Report to the Minister Performance of “new” Balancing and LFAS markets Bidding behaviour SRMC requirements Constraint payments Ensuring quality services for a reasonable price14

  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 price16

  17. Break Return for: 2014 Review of EGRC Regulatory Scheme Ensuring quality services for a reasonable price17

  18. 2014 Review of EGRC Regulatory Scheme First annual review of EGRC Regulatory Scheme. Ensuring quality services for a reasonable price18

  19. Comprises: • The EGRC Regulations • The Segregation and Transfer Pricing Guidelines • The (Standard Product) Wholesale Arrangements The EGRC Regulatory Scheme Ensuring quality services for a reasonable price19

  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. Ensuring quality services for a reasonable price20

  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 Ensuring quality services for a reasonable price21

  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 Ensuring quality services for a reasonable price22

  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? Ensuring quality services for a reasonable price23

  24. Your Views Ensuring quality services for a reasonable price24

  25. Contact us: Economic Regulation Authority Level 4, Albert Facey House 469 Wellington Street Perth WA 6000 www.erawa.com.au (08) 6557 7900 Ensuring quality services for a reasonable price25

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