On 7 December 2023 the Australian Energy Market Commission (AEMC) received a rule change request from Powerlink Queensland to amend the National Electricity Rules (NER) to allow it to reset the system strength unit prices (SSUPs), a component of the system strength charge, for Queensland’s nodes. 

Under the NER, SSUPs SSUPs must be fixed (subject to consumer price indexation) for the each five year system strength charging period. Powerlink's current system strength charging period runs to 30 June 2028.

Powerlink now estimates lower system strength costs than initially expected, and proposes to reset its SSUPs to reflect this

Powerlink published its current, and first, SSUPs in March 2023.

Powerlink established its SSUPs on the best information available to it at the time, which was largely based on benchmarked costs for synchronous condensers. After having commenced its RIT-T in March 2023, Powerlink now considers that the costs to procure system strength could be materially lower than those used to calculate the SSUPs. Powerlink indicates this is due to the change in the potential mix of system strength technologies that could be used in the next 10 years.

The rules do not currently allow SSUPs to be changed during a system strength charging period. Accordingly, Powerlink is now seeking a participant derogation from the NER to publish revised SSUPs to apply from 1 July 2024 for the remaining four years of its current system strength charging period.

We are seeking feedback on the consultation paper and indicative draft rule  

The consultation paper and indicative draft rule outline a proposed participant derogation applying to Powerlink to address this issue. Powerlink would be able to reset its SSUPs for the remainder of its current system strength charging period, as long as they are lower than the original SSUPs. Connection applicants would be able to apply these new SSUPs, and those who have already elected to self-remediate could change this decision.

The Commission has opted to use the expedited rule change process

The AEMC proposes to use an expedited rule change process for this rule change request because the rule, if made, is unlikely to have a significant effect on the NEM. The consultation paper explains how any objections to use of the expedited process may be lodged.

Key dates for this rule change 

• Rule change request received (ERC0382) - 7 December 2024 
• Consultation paper and indicative draft rule published - 18 January 2024 with submissions due - 15 February 2024
• Objections to the expedited process due by - 1 February 2024 
• Final determination and rule expected completion - 14 March 2024