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Monitoring the effectiveness of the market

The Economic Regulation Authority (ERA) has obligations under clause 2.16 of the Wholesale Electricity Market Rules with respect to Monitoring the Effectiveness of the Market and investigating any market behaviour it considers has resulted in the market not functioning effectively. AEMO has obligations to support the ERA in carrying out these functions by providing and undertaking analysis of the Market Surveillance Data Catalogue and assisting in monitoring market behaviour.

Market Surveillance Data Catalogue

Under Clause 2.16.3 of the Wholesale Electricity Market Rules, AEMO must publish the Market Surveillance Data Catalogue and republish this document when it changes. The Market Surveillance Data Catalogue identifies data to be compiled concerning the market. The following is the current catalogue provided to the ERA.

Clause Reference

Description

2.16.2(a)

Market Generators or Customers in the market, by Participant class

2.16.2(b)

Market Participants in RCM Auction (EOI participation, Certification and Bilateral Trade Declaration)

2.16.2(c)

Clearing Price Reserve Auction and STEM Auction

2.16.2(d)

Load Following Ancillary Services submissions

2.16.2(dA)

Reserve Capacity Offers (Price and Quantity blocks) by RCM Cycle, by Participant, by Facility

2.16.2(e)

All Bilateral Quantities

2.16.2(f)

All STEM Bids and Offers by Market Participant, by Trading Interval

2.16.2(g)

Balancing Submissions, including Price-Quantity Pairs and Ramp Rate Limits

2.16.2(gA)

All Fuel Declarations

2.16.2(gB)

All Availability Declarations

2.16.2(gC)

Ancillary Services Declaration by Participant, by Trading Interval

2.16.2(h)

Any substantial variation in STEM Supply Portfolio relative to recent past behaviour by Participant, by Trading Interval

2.16.2(hA)

Evidence of MC Overstating Consumption - Planned Load by Participant, by Trading Interval

2.16.2(hB)

Information in clause MR 7A.2.18(c)

2.16.2(hC)

Substantial variations in Balancing Prices, Non-Balancing Facility DIspatch Instruction Payments or Balancing Quantities relative to recent past behaviour

2.16.2(i)

Capacity Available through Balancing from Balancing Facilities, Dispatchable Loads and Demand Side Programmes

2.16.2(j)

Frequency and Nature of Dispatch Instruction and Operating Instructions by facility, by Trading Interval

2.16.2(k)

Nature and Frequency of Outages of SG and NG band compliance with outage scheduling process

2.16.2(l)

Performance of MPs meeting Reserve Capacity Obligations

2.16.2(m)

Ancillary Service Contracts

2.16.2(o)

Rule Change Register

Market Behaviour Investigations

Under clause 2.16.9B of the Wholesale Electricity Market Rules, where the ERA concludes that:

(a) prices offered by a Market Generator in its Portfolio Supply Curve may not reflect the Market Generator’s reasonable expectation of the short run marginal cost of generating the relevant electricity;

(aA) prices offered by a Market Generator in its Balancing Submission may exceed the Market Generator’s reasonable expectation of the short run marginal cost of generating the relevant electricity; or

(b) prices offered by a Market Generator in its LFAS Submission may exceed the Market Generator’s reasonable expectation of the incremental change in short run marginal cost incurred by the LFAS Facility in providing the relevant LFAS,

and the ERA considers that the behaviour relates to market power, the ERA must as soon as practicable, request an explanation from the Market Participant which has made the relevant STEM Submission, Balancing Submission or LFAS Submission and investigate the identified behaviour.

Under clause 2.16.9C, the Market Participant must submit the explanation requested under clause 2.16.9B within two Business Days from receiving the request.

Clause 2.16.9D requires the ERA to publish a Market Participant’s response to the ERA’s request for an explanation under clause 2.16.9C on the market website.

Explanations requested by the Economic Regulation Authority

On 26 July 2017, the ERA requested an explanation from Synergy under clause 2.16.9B of the Wholesale Electricity Market Rules. On 28 July 2017, the ERA received an explanation letter from Synergy. On 31 July 2017, the ERA published a notice to its website advising of the investigation into Synergy’s pricing behaviour.

Previous investigations conducted by the Economic Regulation Authority

Additional information on current and completed ERA investigations is available at the ERA website .

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