Cost Allocation Review

The Coordinator of Energy has undertaken the Cost Allocation Review, which was a review of the allocation of Market Fees and Essential System Services (ESS) costs in the Wholesale Electricity Market (WEM).
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The Coordinator has conducted the Cost Allocation Review, in consultation with the Market Advisory Committee (MAC), under clause 2.2D.1 of the WEM Rules.

The Cost Allocation Review has reviewed the allocation of Market Fees and ESS costs in the WEM.

The MAC established the Cost Allocation Review Working Group (CARWG) to support the Coordinator’s review. Papers and detailed minutes of the CARWG meetings are published on the CARWG webpage at Cost Allocation Review Working Group, and the relevant MAC papers and minutes are available on the MAC webpage at Market Advisory Committee.

The Coordinator published a Cost Allocation Review Consultation Paper that:

  • set out the preliminary assessment of the cost allocation methods against the guiding principles for the review, including whether the methods were aligned with the causer‑pays principle;
  • proposed options for cost allocation methods that were more consistent with the guiding principles, where it was determined that methods did not align well with the guiding principles;
  • provided a quantitative assessment of the impact of the proposed options on Market Participants, in comparison to the status quo; and
  • set out proposals for changes to the cost allocation methods in the WEM Rules, where relevant.

The window for submitting feedback closed at 5:00pm (AWST), 9 February 2023

The Cost Allocation Review culminated with the Cost Allocation Review Information Paper that presented the outcomes from the Cost Allocation Review for the allocation of: 

  • Market Fees; 
  • Regulation Raise and Lower service costs; 
  • Contingency Reserve Raise service costs; 
  • Contingency Reserve Lower service costs; and 
  • Other Essential Systems Services cost. 

Exposure Draft of the Cost Allocation Review Wholesale Electricity Market (WEM) Amending Rules

Energy Policy WA has developed for consultation an Exposure Draft of WEM Amending Rules to give effect to the CAR Review outcomes outlined in the CAR Review Information Paper. The draft WEM Amending Rules have been developed in consultation with the Market Advisory Committee and its CAR Review Working Group.

This Exposure Draft is based on the 29 April 2023 Consolidated Companion Version of the WEM Rules.

An overview of the draft changes to the WEM Rules is provided on the first page of the Exposure Draft at the link below.

The window for submitting feedback closed at 5:00pm (AWST) 28 November 2023.