DWGM AND STTM PARAMETER REVIEW INTERMEDIATE DRAFT REPORT

Transcription

1 DWGM AND STTM PARAMETER REVIEW INTERMEDIATE DRAFT REPORT PREPARED BY: AEMO DOCUMENT REF: VERSION: 1 DATE: 7 August 2012 Australian Energy Market Operatr Ltd ABN inl@em.cm.au NEW SOUTH WALES QUEENSLAND SOUTH AUSTRALIA VICTORIA AUSTRALIAN CAPITAL TERRITORY TASMANIA

2 Cntents Executive Summary Intrductin Parameters cvered by the review STTM market parameters DWGM market parameters Stakehlder Submissins Review apprach and timetable Review apprach Review timetable AEMO s initial cnsideratins...12 Dc Ref: August 2012 Page 2 f 13

3 List f abbreviatins Abbreviatin AEMO APC CPT DWGM GWCF MMA MMP MOS MPC NEM NGL NGR NGO NGR STTM STTM-CF VCR VLL Definitin Australian Energy Market Operatr Administered Price Cap Cumulative Price Threshld Declared Whlesale Gas Market Gas Whlesale Cnsultative Frum (Vic) The GWCF is a frum established by AEMO fr cnsulting with industry n matters relating t the DWGM. The GWCF is a frum pen t all interested stakehlder t participate in. Further details can be fund at: McLennan Magasanik Assciates Minimum Market Price Market Operatr Services Market Price Cap Natinal Electricity Market Natinal Gas Law Natinal Gas Rules Natinal Gas Objective Natinal Gas Rules Shrt Term Trading Market STTM Cnsultative Frum The STTM-CF is a frum established by AEMO fr cnsulting with industry n matters relating t the STTM. The STTM-CF is a frum pen t all interested stakehlder t participate in. Further details can be fund at: Value f Custmer Reliability Value f Lst Lad Dc Ref: August 2012 Page 2 f 13

4 Executive Summary Rule 492 f the Natinal Gas Rules (NGR) requires AEMO t cnduct a review f market parameter settings in the Shrt Term Trading Market (STTM). While there is n mandated review f the market parameters in the Declared Whlesale Gas Market (DWGM), AEMO is taking the pprtunity t cnsider reviewing the DWGM market parameters in cnjunctin with the STTM parameter review. AEMO s STTM and DWGM Market Parameter First Stage Cnsultatin paper was published n 1 May AEMO s initial cnsideratins led it t a view that there has been insufficient peratinal experience r material changes in either recent, r freseeable, market factrs r industry structures, since the last time the DWGM and STTM market parameters were reviewed r set, t warrant a detailed review at this time. AEMO cnsiders that perfrming extensive mdelling withut significant change t the underlying basis r assumptins wuld be unlikely t result in a cmpelling (if any) case fr changes t the current market parameters in peratin. There is n mandated review f market parameters within the DWGM, and there is limited value in undertaking a review f DWGM market parameters withut cnsideratin f thse fr the STTM. Accrdingly, AEMO believes in the interests f efficient use f its wn and participant resurces, there wuld be limited, if any, value in pursuing extensive analysis and review f the market parameters acrss the STTM and DWGM until such time there are demnstrated changes t the basis and assumptins used t derive the existing parameters, r clear peratinal evidence emerges that they have caused inapprpriate market utcmes. AEMO will review this psitin in the event f substantiated stakehlder views t the cntrary, and/r in the light f peratinal experience and market utcmes during the 2012 winter perid. The STTM and DWGM Market Parameter First Stage Cnsultatin paper requested stakehlder views n: The review apprach prpsed by AEMO; The set f parameters and assumptins that may require review, if any; The scpe f the review; and New r updated assumptins r scenaris t be included in the scpe. AEMO received five submissins t the STTM and DWGM Market Parameter Review. Fur f these submissins supprted AEMO s psitin t wait until after the 2012 winter perid t cnsider whether the Market Parameters need t be recnsidered. The submissin frm Infratil Energy Australia cnsidered that AEMO shuld test the DWGM s market parameters at a minimum, if nt the STTM s. AEMO has respnded t these submissins in sectin 2.3.AEMO is required t review the STTM market parameters in accrdance with the extended cnsultative prcedure as per sectin 9A f the NGR. AEMO is required t cmplete this review by prducing a final reprt setting ut its final recmmendatins by 31 December This intermediate draft reprt aims t respnd t stakehlder s submissins in place f a detailed draft secnd stage reprt that will be prduced fllwing the 2012 winter perid. AEMO cnsiders, taking int accunt stakehlder feedback in respnse t the First Stage Cnsultatin Paper, that there is limited value in undertaking extensive mdelling and review f the market parameters in the gas markets. AEMO is waiting fr the utcme f the 2012 winter perid befre determining whether the timetable fr the review will be cmpleted by 28 December If hwever, AEMO cnsiders, taking int accunt the utcmes f the 2012 winter perid, that a review f the gas market parameters is warranted, then the timetable fr the review will be, fllwing extensive mdelling and review, cmpleted by 29 March In late August r early September, AEMO will determine which apprach t take, fllwing discussin with stakehlders at its cnsultative frums. Dc Ref: August 2012 Page 3 f 13

5 1 Intrductin The Shrt Term Trading Market (STTM) and Declared Whlesale Gas Market (DWGM) feature a number f price cap parameters that manage participant risk, and cnvey ecnmic price signals. These parameters have previusly been derived based n extensive mdelling and review. The STTM parameters were first set in 2009, based n mdelling perfrmed by McLennan Magasanik Assciates (MMA) and a peer review by Creative Energy Cnsulting. The DWGM parameters were first set ver 1997 and 1998, and were reviewed in 2008 based n mdelling perfrmed by MMA, with peer review by Market Refrm. Rule 492 f the Natinal Gas Rules (NGR) requires AEMO t undertake a review f the STTM market parameters by 31 December With apprximately 18 mnths f STTM peratin at the Sydney and Adelaide hubs and apprximately three mnths at the Brisbane hub, this review may present an pprtunity t validate market parameters against peratinal experience; recent r freseeable changes t market factrs r industry structure; and ptential interactins with ther markets. AEMO is als taking the pprtunity t review the DWGM market parameters in cnjunctin with the STTM parameter review. This dcument utlines AEMO s apprach t the Market Parameter Review and its cnsideratin f stakehlder submissins frm the First Stage Cnsultatin Paper. AEMO received five submissins in respnse t the First Stage Cnsultatin Paper. Fur f these submissins supprted AEMO s psitin t wait until after the 2012 winter perid t cnsider whether the Market Parameters need t be recnsidered. The submissin frm Infratil Energy Australia cnsidered that AEMO shuld test the DWGM s market parameters at a minimum, if nt bth the STTM s and DWGM s market parameters. AEMO has respnded t these submissins in sectin 2.3. The purpse f this paper is t finalise AEMO s apprach t the Market Parameter Review and t detail AEMO s initial respnses t stakehlder cmments. In late August r early September AEMO will finalise its psitin, in cnsultatin with the STTM Cnsultative Frum (STTM-CF) and the Gas Whlesale Cnsultative Frum (GWCF), n whether t prceed with an extensive mdelling r review f market parameters fr the STTM and DWGM. Dc Ref: August 2012 Page 4 f 13

6 2 Parameters cvered by the review 2.1 STTM market parameters The fllwing STTM market parameters are mandated fr review under clause 492 f the NGR. Parameter Descriptin Dcumented In Value Market Price Cap (MPC) The maximum market price t apply fr a gas day. Natinal Gas Rules $400/GJ The MPC prvides an upper limit n market clearing prices while nt suppressing r distrting ecnmic incentives fr capacity investment, and prviding market cmpensatin fr invluntary curtailment. Administered Price Cap (APC) The cap applicable when an administered price cap state is in place. Natinal Gas Rules $40/GJ The APC mitigates the risk f high prices in circumstances where expsure t extreme pricing is unlikely t prmte a reasnable market respnse r market utcme. Cumulative Price Threshld (CPT) The threshld fr autmatic impsitin f an administered price cap state. The CPT mitigates the risk f extended perids f high prices. Natinal Gas Rules $440/GJ (110 per cent f the MPC) CPT hrizn The perid ver which hub prices are summed t determine whether the cumulative price threshld has been exceeded. Natinal Gas Rules 7 cnsecutive gas days Minimum Market Price (MMP) The minimum market price t apply fr a gas day. Natinal Gas Rules $0/GJ There are tw ther parameters that currently perate in the STTM: Market Operatr Service (MOS) Cst Cap currently set at $50/GJ, the MOS cst cap is the maximum price fr MOS increase and decrease ffers cvering the MOS service cmpnent f market settlements. The MOS cst cap must be sufficient t cver the cst f hlding capacity, while limiting MOS csts n the market. Settlement Surplus Cap currently set at $0.14/GJ, the settlement surplus cap is the maximum settlement surplus payment rate t be allcated based n deviatins. Neither the MOS cst cap nr the settlement surplus cap are within the scpe f this review. Bth were cnsidered in the STTM Operatinal Review cmpleted n 30 March In its final reprt n the STTM Operatinal Review and Demand Hubs Review AEMO did nt recmmend amending the MOS cst cap, but nted that the need and nature f the MOS cst cap was tied t the MOS cst structure. With respect t the settlement surplus cap, AEMO has recmmended changes t the settlement surplus and shrtfall arrangements. In its final reprt, AEMO recmmended intrducing the average cst f MOS int the existing deviatin pricing mechanism t better assign MOS csts t the parties cntributing t MOS n a gas day. Under the cst t cause mdel prpsed abve, AEMO recmmends remving the deviatin parameters t ensure that the deviatin pricing mechanism better assign MOS csts t the parties cntributing t MOS n a gas day. This prpsal affects the need fr the settlement surplus cap. AEMO received a submissin frm the Majr Energy Users (MEU) that requested the MOS Cst Cap and Settlement Surplus Cap be cnsidered as part f this review instead f as part f the Phase 2 intra-day review. The intent f the Phase 2 intra-day review, due t be cmpleted by 31 1 STTM Operatinal Review and Demand Hubs Review Final Reprt, AEMO, 30 March Dc Ref: August 2012 Page 5 f 13

7 December 2012, is t cnsider brader design issues, with the MOS framewrk frming part f thse cnsideratins. Sme parties have suggested that the MOS cst cap shuld be reduced in light f the cunteracting MOS 2 issue currently being bserved at the Sydney and Adelaide hubs. AEMO ntes that using the MOS cst cap t manage the cunteracting MOS issue may have unintended cnsequences which culd discurage participatin in the prvisin f MOS services, affecting the cmpetitiveness and liquidity f the MOS market. AEMO s preferred apprach has been t identify the cause and cnsider ptins which specifically address the cunteracting MOS issue. AEMO cntinues t prgress this issue and is wrking with industry t develp apprpriate slutins. AEMO has cnsidered MOS cst cap and Settlement Surplus Cap as part f the STTM Operatinal Review, cmpleted 30 March 2012, and des nt cnsidered these parameter shuld be cnsidered again as part f this review. 2.2 DWGM market parameters The fllwing DWGM parameters were included in the 2008 review: Parameter Descriptin Dcumented In Value Value f Lst Lad (VLL) The maximum market price. VLL prvides an upper limit n market clearing prices while nt suppressing r distrting ecnmic incentives fr capacity investment, and prviding market cmpensatin fr invluntary curtailment. Natinal Gas Rules $800/GJ Infratil and Internatinal Pwer bth cnsider this parameter shuld be examined. Administered Price Cap (APC) The cap applicable when an administered price cap state is in place. The APC mitigates the risk f high prices in circumstances where expsure t extreme pricing is unlikely t prmte a reasnable market respnse r market utcme. Whlesale Market Administered Pricing Prcedures (Victria) $40/GJ Cumulative Price Threshld (CPT) The threshld fr impsitin f an administered price perid. The CPT mitigates the risk f extended perids f high prices. Whlesale Market Administered Pricing Prcedures (Victria) $3,700/GJ Cumulative Price Perid The perid ver which marginal clearing prices are summed t determine whether the cumulative price threshld has been exceeded. Whlesale Market Administered Pricing Prcedures (Victria) 35 cnsecutive scheduling intervals (7 gas days) While nt strictly a DWGM parameter, the Value f Custmer Reliability (VCR) may be cnsidered as part f this review. The VCR represents the value a custmer places n curtailment which is generally related t the cst f alternative fuels, the value f lst prductin r the cst f plant damage and infrms the setting f VLL. 2.3 Stakehlder Submissins AEMO received five submissins t the STTM and DWGM Market Parameter Review. Fur f these paper supprted AEMO s psitin t wait until after the 2012 winter perid t further cnsider the Market Parameters. The submissin frm Infratil Energy Australia cnsidered that AEMO 2 Cunteracting MOS is the ccurrence f increased MOS n a pipeline and at the same time the ccurrence f decreased MOS n anther pipeline supplying the same hub. Dc Ref: August 2012 Page 6 f 13

8 shuld test the DWGM market parameters at a minimum, if nt bth the STTM s and DWGM s market parameters. AEMO has summarised and respnded t the issues raised in submissins belw. Infratil Energy Australia cnsidered that sufficient peratinal experience exists in the DWGM t allw fr assessment f market parameters. In additin Infratil cnsider that freseeable changes in the gas industry exist including exprt LNG and the carbn tax which shuld be mdelled and assessed as part f this review f market parameters. AEMO undertk analysis presenting the underlying assumptins upn which the parameters in the STTM and DWGM were determined and utlined where it cnsidered pssible further mdelling/analysis culd be undertaken. AEMO cnsidered that, based n the analysis, there were unlikely t be material changes that wuld result in different market parameter utcmes (nting that a review f parameters can be undertaken at any time, and that AEMO is required, at least in the STTM, t review the parameters at least every 5 years). AEMO presented this view t the wrkshp. Wrkshp attendees supprted this psitin nting that it was imprtant t see whether any events ccur ver the winter perid which wuld warrant a review f the gas market parameters. AEMO then presented the analysis and apprach fr public cnsultatins, t give stakehlders an pprtunity t review AEMO's analysis and cmments accrdingly. the STTM has been perating fr nearly 2 years and ver that time there has been a $150/GJ ex-ante market price set n 1/11/2010, a $390/GJ ex pst imbalance price n 8/10/2010 and a $400/GJ ex pst imbalance price n 1/11/2010 in at the Sydney hub. As these prices have ccurred they warrant further review as part f this prcess. AEMO prduced an STTM-CF paper, fr the 9 Nvember 2011 meeting, that discussed these events. These high prices resulted frm errneus pipeline facility data that impacted the ex ante market price. This issue was addressed at the STTM-CF and amendments were made t the STTM market systems t assist market participants frm making errneus bids. These high prices have since been rectified and have nt cntinued t ccur. AEMO des nt cnsider this event t be evidence f market stress which wuld be indicated by a sustained perid f high market prices in the STTM. in Nvember 2008 the DWGM had an $800/GJ price in ne schedule. This resulted in cnsiderable wealth transfer and is clearly an event f market stress. AEMO prduced the reprt Significant Price Event Reprt Gas Day: 22 Nvember 2008, which summarised the events that ccurred n the day causing the $800 / GJ VLL price. The reprt explained that n 22 Nvember 2008 the DWGM had a supply shrtfall which set the price at VLL ($800/GJ). The shrtfall was due t multiple cincident planned and unplanned utages, and higher than expected demand due t cld weather. As this has been a ne ff event AEMO des nt cnsider it represents market stress but rather the utcme f a specific set f circumstances. AEMO des nt cnsider this event t be evidence f market stress which wuld be indicated by a sustained perid f high market prices in the DWGM. In additin, the ther submissins supprted AEMO s psitin t reassess the requirement fr the review after the 2012 winter perid. They als raised the fllwing issues: Internatinal Pwer raised cncerns with the value f VLL ($800) in the DWGM cmpared t the value f the MPC ($400) that culd ptentially create arbitrage pprtunities in the gas market. AEMO cnsiders that when assessing the VLL: Dc Ref: August 2012 Page 7 f 13

9 that it is imprtant t recgnise that differences in initial market design between the STTM and DWGM which may nt necessary mean the tw markets have the same VLL/MPC. that the single VLL event in Nvember 2008 resulted frm an unusual set f circumstances that have nt been repeated since this time. In additin, this review will be examining the utcmes frm winter 2012 t determine if there is a need t revisit the DWGM VLL. The MEU als cnsidered that any review f market parameters fr the DWGM and STTM shuld accunt fr the differences in initial market design f each market. In particular the lack f ability t adequately price demand side respnse gas within a distributin system in the DWGM (similar t cntingency gas in the STTM). AEMO ntes and agrees with the MEU s view that the impact f lad shedding in the DWGM shuld be accunted fr in any Parameter Review. AEMO cnsiders that any changes t DWGM market design t include a frm f payment fr vluntary lad shedding are beynd the scpe f this review and shuld be prgressed thrugh the GWCF. Origin Energy suggested that the VLL and MPC terminlgy shuld be aligned between the DWGM and the STTM. AEMO supprts the alignment f terminlgy between the STTM and DWGM. AEMO cnsiders the rule change culd be dne as part f a minr amendment t the NGR. Origin Energy des nt cnsider there is any requirement t extend the review beynd 31 December 2012 unless the 2012 winter demnstrates that the current parameters are inefficient r distrt market utcmes. Hwever, if detailed mdelling needs t be undertaken, Origin cnsiders the 2007 winter ffered the mst recent adequate cnditins t test the validity f market parameters thrugh high demand driven by drught, gas fired generatin and prevailing winter cnditins. Origin cnsiders the intervening perid has been benign in cmparisn and unsuitable fr testing the validity f market parameters. AEMO agrees with Origin Energy s view and this utcme is reflected in AEMO s Review Apprach and Timetable in the next sectin f this reprt. AEMO will take these views int cnsideratin in its Market Parameter Review fllwing the 2012 winter perid. Dc Ref: August 2012 Page 8 f 13

10 3 Review apprach and timetable 3.1 Review apprach AEMO cnsulted n its Market Parameter review apprach in its first stage cnsultatin paper in additin t the industry wrkshp. These prcesses have allwed AEMO t widely cnsult n its apprach and n stakehlders have raised issue with AEMO s review apprach. AEMO cnsider this review t be a validatin f existing market parameter values, rather than the derivatin f new parameter values. AEMO s apprach fr reviewing bth the DWGM and STTM parameters is: Step 1: Validatin f existing assumptins The bjective f this phase is t identify assumptins that may have changed since the last derivatin f market parameters, and any new cnsideratins that may have a material impact n parameter effectiveness. This phase includes a review f: Methdlgy used in the mst recent parameter derivatin. Assumptins underlying the mst recent parameter derivatin. Changes t industry structure and market design since previus parameter derivatin. Freseeable changes t industry structure and market design in the future. Past market events that cncern the market parameters f this review. Linkages between, and develpments in, related markets (i.e. the Natinal Electricity Market (NEM), ther gas markets, carbn markets). Energy market plicy bjectives. The utcmes f this phase will infrm thse parameters and assumptins that require further review and thse that remain valid. AEMO has undertaken this analysis and has presented the initial utcmes in the First Stage Cnsultatin Paper. AEMO s initial view, at this stage, is that n material changes have been bserved that warrant extensive remdelling t be undertaken f the underlying assumptins. Stakehlder submissins t the First Stage Cnsultatin Paper were unable t substantiate reasning fr AEMO t review Market Parameters prir t the end f the 2012 winter perid. Shuld the 2012 winter perid prvide n further cause t review the market parameters then AEMO will mve straight t Step 5. Shuld the 2012 winter perid highlight a need t review the market parameters, then AEMO will mve t Step 2. AEMO, in late August/early September, will determine which apprach t take, fllwing assessment f winter 2012 market utcmes and in discussin with stakehlders at its cnsultative frums. Step 2: Frmulatin f scenaris fr analysis This step will be undertaken if AEMO cnsiders the market parameters need t be reviewed taking int accunt market utcmes during the 2012 winter perid. The bjective f this phase is t define a series f scenaris t test and validate the market parameters fr which the underlying assumptins have materially changed. Each scenari will describe a specific bjective, assumptins and methdlgy. AEMO wuld cnsult industry in defining the scenaris and assumptins upn which the mdelling wuld be undertaken. Dc Ref: August 2012 Page 9 f 13

11 Step 3: Executin f mdelling and analysis This step will be undertaken if AEMO cnsiders the market parameters need t be reviewed, taking int accunt stakehlder feedback in respnse t the First Stage Cnsultatin Paper, r market utcmes during the 2012 winter perid. This phase cncerns the analysis f the set f scenaris. In this phase the required data will be cmpiled and analysis tls mdified r cnstructed as necessary. Additinal scenaris may be develped and analysed t explre sensitivities and investigate alternative assumptins based n the results f initial analysis. The utcme f analysis f each scenari will be an evaluatin f the perfrmance f a market parameter (r alternative parameters) with respect t the scenari bjectives. The results will infrm preliminary recmmendatins n the market parameter value. Step 4: Independent review f mdelling and preliminary recmmendatins This step will be undertaken if AEMO cnsiders the market parameters need t be reviewed, taking int accunt market utcmes during the 2012 winter perid. An independent review f the mdelling and preliminary recmmendatins will be perfrmed. The review will cver: The review methdlgy; The cverage f analysis, including suggestins f additinal scenaris fr cnsideratin; The assumptins underlying analysis; and The review findings and recmmendatins. Step 5: Release f Draft Reprt fr public cnsultatin The preliminary recmmendatins will be released fr a perid f public cnsultatin. Shuld steps 2-4 be undertaken, fllwing the utcme f the 2012 winter perid, these will be presented in the draft reprt fr stakehlder feedback. Step 6: Release f Final Reprt setting ut final recmmendatins Stakehlder feedback in respnse t the Draft Reprt will be cnsidered in finalising the review utcmes. Any additinal analysis will be perfrmed as required. Shuld the final reprt prpse amendments t the market parameter settings, AEMO will prgress these changes via the nrmal NGR r prcedure change prcesses. 3.2 Review timetable AEMO is required t review the STTM market parameters in accrdance with the extended cnsultative prcedure as per sectin 9A f the NGR. AEMO is required t cmplete this review by prducing a final reprt setting ut its final recmmendatins by 31 December AEMO cnsiders, taking int accunt stakehlder feedback in respnse t this First Stage Cnsultatin Paper, that there is limited value in undertaking extensive mdelling and review f the market parameters in the gas markets. AEMO awaits the utcmes f the 2012 winter perid befre finalising the timetable fr the Market Parameter review. If the utcmes f the 2012 winter perid d nt supprt that a review f parameters is warranted, then the timetable fr the review is utlined in table 1. If hwever, AEMO cnsiders, taking int accunt the utcmes f the winter perid, that a review f the gas market parameters is warranted, then the timetable fr the review is as per table 2. In late August r early September, AEMO will determine which apprach t take, fllwing discussin with stakehlders at its cnsultative frums. Dc Ref: August 2012 Page 10 f 13

12 During the cnsultatin prcess, AEMO may hld industry wrkshps with wrk thrugh stakehlder issues, apprach, and input int any mdelling undertaken. Table 1: review timetable (n extensive mdelling r review undertaken) Prcess Date Industry wrkshp t discuss review apprach and scpe 4 April 2012 First Stage Cnsultatin Paper Open fr Cnsultatin 1 May 2012 First Stage Cnsultatin Paper Clsing date fr submissins 8 June 2012 Industry wrkshps (if required) July/August 2012 Cnsultative Frum (discussin f apprach in light f winter perid utcmes) August/September 2012 Draft Reprt Open fr cnsultatin 17 September 2012 Draft Reprt Clsing date fr submissins 2 Nvember 2012 Industry wrkshps (if required) Nvember 2012 AEMO releases final reprt 28 December 2012 Table 2: review timetable (extensive mdelling r review undertaken) Prcess Date Industry wrkshp t discuss review apprach and scpe 4 April 2012 First Stage Cnsultatin Paper Open fr Cnsultatin 1 May 2012 First Stage Cnsultatin Paper Clsing date fr submissins 8 June 2012 Industry wrkshps (if required) July/August 2012 Cnsultative Frum (discussin f apprach in light f winter perid utcmes) Review f assumptins, executin f mdelling and preliminary recmmendatins, and peer review f mdelling. August/September 2012 September 2012 Nvember 2012 Draft Reprt Open fr cnsultatin 10 December 2012 Draft Reprt Clsing date fr submissins 25 January 2013 Industry wrkshps (if required) February 2013 AEMO releases final reprt 29 March 2013 Dc Ref: August 2012 Page 11 f 13

13 4 AEMO s initial cnsideratins AEMO s initial cnsideratins, supprted by mst stakehlders, have led it t a view that there has been insufficient peratinal experience, r material changes in either recent r freseeable market factrs r industry structures, since the last time the DWGM and STTM market parameters were reviewed r set, t warrant a detailed review at this time. AEMO has nt received any submissins that have substantiated a need t begin extensive mdelling and review f the DWGM and STTM market parameters. Therefre AEMO cnsiders that perfrming extensive mdelling withut significant change t the underlying basis r assumptins wuld be unlikely t result in a cmpelling (if any) case fr changes t the current market parameters in peratin. There is n mandated review f market parameters within the DWGM, and there is limited value in undertaking a review f DWGM market parameters withut cnsideratin f thse fr the STTM. Accrdingly, AEMO believes that in the interests f efficient use f its wn and participant resurces, there wuld be limited, if any, value in pursuing extensive analysis and review f the market parameters acrss the STTM and DWGM until such time there are demnstrated changes t the basis and assumptins used t derive the existing parameters, r clear peratinal evidence emerges that they have caused inapprpriate market utcmes. AEMO will review this psitin in the light f peratinal experience and market utcmes after the 2012 winter perid. Dc Ref: August 2012 Page 12 f 13