Attn Energy, business writers
The Australian Competition and Consumer Commission is seeking comments from the electricity market on the proposed revocation and substitution of the authorisation granted by the ACCC to the South Australian electricity vesting contracts in December 1999.
In its December authorisation, the ACCC imposed two conditions on its authorisation:
The average price outcome (based on the estimated value of the contract prices, pool prices and capacity payments) for the acquisition of electricity for franchise and grace period customers should be $40MWh or below from 1 February 2000 for the remaining life of the vesting contracts.
From 1 January 2001, ETSA Power (the franchise retailer) must have the option of terminating its swap and price cap contracts. ETSA Power must give a month's notice of its decision to exercise its option. To the extent applicable, the counter-party generators must have an option to re-negotiate any affected contracts and/or terminate any related insurance contracts, should ETSA Power exercise its option.
On Friday 14 April, the ACCC received an application from AGL SA (the new owner of the ETSA Power retail business) requesting that three new conditions be added to the authorisation. AGL SA has proposed:
- a look-back mechanism, to rebate AGL SA to the extent that its average electricity acquisition price paid under the vesting contracts exceeds $40MWh;
- changes to contract I (concerning interconnector supplies and interruptions) between Optima Energy and AGL SA; and
- rebates to customers where the average acquisition price falls below $40MWh.
The ACCC has decided to proceed with its consideration of the matter and has issued a notice seeking submissions from interested parties. Submissions close on 26 May 2000.
After reviewing submissions, the ACCC will issue a draft determination and, if requested, hold a pre-determination conference, before making its final determination on the proposed changes.
Until the ACCC makes a final determination on this matter, the original authorisation and conditions stay in place.