NEM Settlement Estimates Policy Consultation

Timeline

Key contact

Email: [email protected]

Matters under consultation

AEMO is implementing the Shortening the Settlement Cycle (SSC) reform following the Australian Energy Market Commission’s final determination, made on 12 December 2024. The change was made in response to GloBird Energy’s rule change request to shorten the settlement cycle.

The changes reduce the amount of prudential collateral held by AEMO to cover accrued liabilities (typically of retailers) in the NEM, i.e. unpaid settlement amounts. Lowering working capital requirements for small retailers in particular, would lower barriers to market entry and support increased investment in service innovation and more competition. This should benefit consumers through access to more choice and better service offerings.

The final rule shortens the National Electricity Market (NEM) settlement cycle to nine business days following the end of a billing period and introduces a new revision 20 business days following the end of the billing period.

The final rule will commence at the start of billing week 33 on 9 August 2026.

The NEM Settlement Estimates Policy describes the principles and processes which AEMO applies when calculating estimated settlement amounts for the purposes of NER 3.15.12(b).

AEMO has now completed its consultation on updates to the NEM Settlement Estimates Policy in accordance with NER 3.15.12(c) and the standard rules consultation procedure in clause 8.9.2 of the National Electricity Rules (NER).

Scope

The focus of this consultation was proposed amendments to the NEM Settlement Estimates Policy to:

• Streamline and clarify the Policy
• Improve the methodology for performing settlement estimations in the absence of meter data at the NMI level.