Marginal Loss Factor Framework Review

Between July and December 2024, AEMO conducted a round of formal consultation on its Methodology for the Calculation and Application of Forward-Looking Loss Factors (FLLFs). In parallel to this, it compiled a ‘discussion points register’, listing Marginal Loss Factor (MLF) reform ideas that sat outside the scope of the current National Electricity Rules (NER).

Following the conclusion of the methodology consultation, AEMO held two ‘discussion forum workshops’ to refine and develop these reform ideas. AEMO committed to the commencement of a research project and published a draft report in November 2025 for further stakeholder feedback and review. You can access the draft report and submissions here.

A final report for the research was published in February 2026. As a result of this research project, AEMO has submitted a NER change to the Australian Energy Market Commission (AEMC) to introduce a stability principle into MLF determination. If this rule is made, AEMO intends to consult on implementing a glide path via its FLLF methodology.