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Submission to the Australian Energy Market Commission

September 12, 2023
Johanna Bowyer
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IEEFA Submission to: AEMC Draft Rule Determination – National Electricity Amendment (Extension of the Application of the IRM to the RRO) Rule

Dear Ms Anna Collyer, Chair of the Australian Energy Market Commission (AEMC)

The Institute for Energy Economics and Financial Analysis (IEEFA) welcomes the opportunity to respond to the AEMC Draft Rule Determination – National Electricity Amendment (Extension of the Application of the IRM to the RRO) Rule.

IEEFA has reviewed the draft rule determination to extend the application of the interim reliability measure (IRM) to the retailer reliability obligation (RRO) until 30 June 2028.

IEEFA finds there is not sufficient evidence that consumers are willing to pay for this measure. After undertaking an extensive exercise, the Reliability Panel found that the level of reliability stipulated by the IRM does not reflect customer willingness to pay for reliability.

“The Panel’s analysis indicates the IRM, at 0.0006% expected USE, is significantly tighter than a level of reliability consistent with consumer willingness to pay for reliability. The Panel, therefore, does not consider the IRM is a suitable level for the NEM reliability standard.” 

The Reliability Panel also found that the cost of “achieving an IRM level of reliability… is likely to be in the order of $100 million a year”.

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Johanna Bowyer

Johanna Bowyer is the Lead Research Analyst for Australian Electricity at IEEFA. Her research is focused on trends in the National Electricity Market, energy policy and decarbonisation.

Prior to joining IEEFA, Johanna researched distribution networks at CSIRO, worked as an engineer at Solar Analytics and Suntech and worked as a management consultant at Kearney.

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