PIAC made a submission to the Australian Energy Market Commission’s (AEMC) review of the Operation of the Retailer Reliability Obligation (RRO).
PIAC does not support the RRO in any form. Removing it would reduce electricity prices faced by consumers without causing any negative impact on reliability outcomes.
The instrument operates at a time scale that renders it unable to impact the investment decisions of energy generators or storers. This means it cannot impact the supply of either energy generation or storage, and in the event of a reliability event caused by a shortfall of demand could only function to redistribute the total energy supply among consumers. It is not designed to alleviate a reliability event by increasing the efficiency of distribution.
PIAC supports the AEMC’s consideration of a further review that would have a wider terms of reference, namely whether or not the RRO fulfills its mandate or not, and so whether it should be abandoned or not.
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