Transmission use of system – pricing methodology (Victoria)

30/03/2021
Market Network Service Provider
StageFinal Report
ConvenorAEMO NSP
Initiated25/11/2020
Accepting submissions?No

Notice of Final Report

National Electricity Rules

Date of Notice:30 March 2021

This notice informs stakeholders and all other interested parties (Consulted Persons) that AEMO’s consultation to the Transmission Use of System (TUOS) – Pricing Methodology (PM) has ended. The Final Report detailing the results of the Consultation along with the final draft of the PM that will be forwarded to the AER for its consultation process and subsequent approval.

Background

On 16 September 2020, AEMO published an Issues Paper for amendments to the replacement to the current Approved Amended Pricing Methodology for Prescribed Shared Transmission Services for 1 July 2014 to 30 June 2019. 

On 25 November 2020, AEMO published a Consultation Paper and received two submissions covering the same issues. Details can be found under Submissions Received below.

What does the PM cover?

Clause S6A.4.2(f) limits the PM to shared transmission services that are prescribed TUOS services or prescribed common transmission services

This means that in terms of the annual allowable revenue that AEMO is permitted to recover, the PM allows recovery of costs that are in the nature of prescribed TUOS services costs and prescribed common transmission services

AEMO intends to develop the PM in consultation with stakeholders prior to submitting it to the AER for its consultation process. When approved, the new PM will apply from 1 July 2022 for a period of 5 years.

The PM covers the way in which recoverable costs (revenue) are to be recovered from each network user (connection point). Consequently, it deals with how allowable revenue is distributed to network users in terms of the three types of prices chargeable at each connection point (locational, non-locational and common service). 

The costs that make up the revenue that is recovered by AEMO is dealt with in the Revenue Methodology. The delineation is shown in the diagram below.

Confidential submission received from BlueScope Steel Limited on 23 December 2020.

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