1National Electricity (South Australia) (Firm Energy Reliability and Orderly Exit Management) Regulations 2025

South Australia National Electricity (South Australia) (Firm Energy Reliability and Orderly Exit Management) Regulations 2025 under the National Electricity (South Australia) Act 1996

Contents Part 1—Preliminary 1 Short title 2 Commencement 3 Object 4 Interpretation 5 Modification of related Law and Rules 6 Governing law of a FERM contract Part 2—Firm Energy Target and guidelines 7 Declaration of target 8 Minister's guidelines Part 3—Scheme entities Division 1—Appointment 9 Appointment Division 2—Scheme entity functions 10 Scheme administration functions 11 Scheme regulation functions 12 Scheme financial functions Division 3—Related provisions 13 Establishment of entities 14 Principles 15 Scheme Regulator may request provision of information 16 Obligation on regulated entities to provide information 17 Annual reports 18 Suspension or removal of scheme entities 19 Resignation from appointment 20 Replacement of Financial Vehicle (novation of contracts) Part 4—Fund 21 Establishment of Fund Part 5—Commitments and arrangements to achieve Firm Energy Target Division 1—Notice of intention 22 Notice of intention Division 2—Negotiated contracts 23 Negotiated contracts Division 3—Scheme tenders 24 Scheme tenders Division 4—Transitional and novated contracts 25 Transitional contracts 26 Deemed contracts Part 6—Contributions 27 Annual contribution determinations 28 Variation of contribution determinations 29 Contribution notices 30 Initial contribution notices Part 7—FERM cost recovery scheme 31 Recovery and allocation of amounts through pricing 32 Records Part 8—Related obligations on market participants 33 Reliability and market liquidity obligations Part 9—Civil penalty regime 34 Civil penalties Part 10—Application of Orderly Exit Management Framework 35 Application of Orderly Exit Management Framework Part 11—Miscellaneous 36 Delegations 37 Guidelines made by Scheme Regulator 38 Variation of licence conditions 39 Application of Competition and Consumer Act 2010 of Commonwealth 40 Competition authorisation 41 Exclusion of operation of Corporations Act 42 Review Legislative history

Part 1—Preliminary 1—Short title These regulations may be cited as the National Electricity (South Australia) (Firm Energy Reliability and Orderly Exit Management) Regulations 2025. 2—Commencement These regulations come into operation on the day on which they are made. 3—Object The primary object of these regulations is to establish a scheme and a fund for the purposes of providing long duration dispatchable electricity capacity to ensure secure, reliable and affordable electricity supply for the State. 4—Interpretation (1) In these regulations— Act means the National Electricity (South Australia) Act 1996; appointing authority, in relation to a scheme entity, means— (a) the Minister; or (b) the Scheme Administrator; or (c) another person or body acting under regulation 9(5), that has appointed the scheme entity under regulation 9; authorised fund expenditures means a matter specified in a particular paragraph under regulation 21(8); capacity commitment means— (a) an indication by a recognised electricity entity in an NOI to provide long duration dispatchable electricity capacity at a specified level over a commitment period; or (b) a commitment by a long duration capacity provider to provide long duration dispatchable electricity capacity at a specified level under a FERM contract; contribution determination means a contribution determination made under regulation 27 (including as varied under regulation 28); contribution notice means a contribution notice under regulation 29; deemed FERM contract means a contract to which regulation 26 applies; existing designated electricity entity means a person— (a) who is registered by AEMO as a Generator or Integrated Resource Provider; or (b) who falls within another category of Registered participants brought within the ambit of this definition by a determination made by the Minister; FERM contract means a contract under Part 5 for the provision of long duration dispatchable electricity capacity (including a deemed FERM contract); FERM Scheme Amount means— (a) an amount payable by a TNSP under a contribution notice or initial contribution notice; or (b) an amount to be returned to a TNSP under a contribution notice; Financial Vehicle means a person or body appointed to carry out scheme financial functions; Firm Energy Target—see regulation 7; Fund means the Fund established under Part 4; initial contribution notice means an initial contribution notice under regulation 30; long duration capacity provider means a person— (a) who is— (i) an existing designated electricity entity capable of providing long duration dispatchable electricity capacity; or (ii) a new designated electricity entity expected to be capable of providing long duration dispatchable electricity capacity; and (b) who is recognised by the Minister from time to time as being an entity suitable to be a participant in the scheme after taking into account any criteria specified in the Minister's guidelines; long duration dispatchable electricity capacity means dispatchable electricity capacity with a minimum of 8 hours of continuous rated output; Minister's guidelines means the guidelines made by the Minister under regulation 8; NER means the National Electricity Rules; new designated electricity entity means a person— (a) who is required or intends to be registered by AEMO as a Generator or Integrated Resource Provider (other than, for the purposes of this paragraph, an existing designated electricity entity); or (b) who is recognised by the Minister as being equivalent to a new designated electricity entity on account of the substantial replacement of existing assets; NOI means a notice of intention under regulation 22; OEM functions means functions under Part 8AA of the National Electricity (South Australia) Law as applying in this jurisdiction; recognised electricity entity means an existing designated electricity entity that falls within the definition of long duration capacity provider; regulated entity means a Market Participant or other person to whom the scheme applies but does not include a scheme entity; relevant day, in relation to a transitional FERM contract or a deemed FERM contract—see regulation 25 or 26; the scheme means the scheme established by these regulations (other than Part 10) in relation to the provision of long duration dispatchable electricity capacity; scheme administration functions—see regulation 10; Scheme Administrator means a person or body appointed to carry out scheme administration functions; scheme entity means a person or body appointed under regulation 9 (including a person or body appointed under regulation 9(5)); scheme financial functions—see regulation 12; scheme functions means— (a) any scheme administration functions; or (b) any scheme regulation functions; or (c) any scheme financial functions; scheme regulation functions—see regulation 11; Scheme Regulator means a person or body appointed to carry out scheme regulation functions; Scheme Regulator's guidelines means the guidelines made by the Scheme Regulator under regulation 37; scheme regulatory year means a regulatory year in respect of which a TNSP proposes— (a) to recover a FERM Scheme Amount from its Transmission Customers; or (b) to return a FERM Scheme Amount to its Transmission Customers; TNSP means a transmission network service provider who owns, controls or operates a transmission system within the State; transitional FERM contract means a contract entered into under regulation 25; transition period means the period commencing on the commencement of these regulations and ending on 31 December 2026. (2) A reference in these regulations to a scheme entity performing a particular function will be taken to include a reference to any scheme entity that has been appointed to perform that function. (3) A reference in these regulations to the performance of a function includes a reference to the exercise of a power or the discharge of a duty related to that function. (4) A reference in these regulations to a Market Customer is a reference to a Market Customer who operates within the South Australian region of the NEM. (5) Words and expressions used in the National Electricity (South Australia) Law or the NER and in these regulations have the same respective meanings in these regulations as they have in that Law or the NER. 5—Modification of related Law and Rules The National Electricity (South Australia) Law and the NER are modified to the extent necessary to enable the operation of the scheme and the Fund. 6—Governing law of a FERM contract The governing law of any FERM contract is the law of South Australia. Part 2—Firm Energy Target and guidelines 7—Declaration of target (1) For the purposes of section 15B(2)(c) of the Act, the Minister may make a declaration prescribing the quantity of long duration dispatchable electricity capacity that the State requires over a specified period (the Firm Energy Target). (2) The Minister may at any time— (a) vary the Firm Energy Target; or (b) establish a new Firm Energy Target that is to apply in relation to an ensuing specified period. (3) The Minister must ensure that the Firm Energy Target is published on a website determined by the Minister. 8—Minister's guidelines (1) For the purposes of section 15B(2)(c) of the Act, the Minister may make binding guidelines in respect of the scheme, including guidelines with respect to— (a) the notice of intention process under Part 5 Division 1; and (b) the conduct of a scheme tender under Part 5 Division 3, including procedural requirements and eligibility and assessment criteria to be used for the purposes of a scheme tender; and (c) contractual terms, commercial arrangements and other requirements that are to apply to FERM contracts; and (d) requirements relating to a reliability obligation or a market liquidity obligation under Part 8; and (e) any other matter that is— (i) contemplated by these regulations as being the subject of guidelines for the purposes of the scheme; or (ii) considered by the Minister as being necessary or expedient for the purposes of the scheme. (2) The Minister must ensure that any guidelines made by the Minister under this regulation are published on a website determined by the Minister. Part 3—Scheme entities Division 1—Appointment 9—Appointment (1) The Minister may appoint a person or body to carry out— (a) scheme administration functions (a Scheme Administrator); or (b) scheme regulation functions (a Scheme Regulator). (2) The Minister may— (a) appoint 2 or more persons or bodies as a Scheme Administrator or Scheme Regulator; and (b) divide various functions between persons or bodies appointed under subregulation (1), including so as to allow 1 entity to perform the functions of another entity referred to in that subregulation, as provided in the relevant instrument or instruments of appointment or as otherwise determined by the Minister from time to time. (3) The Scheme Administrator may appoint a person or body to carry out scheme financial functions (the Financial Vehicle) and, in so acting, the Financial Vehicle will be a trustee in— (a) administering the Fund; and (b) entering into, or becoming a party to, FERM contracts. (4) The trust arising on account of subregulation (3)— (a) is a statutory trust; and (b) is not subject to the operation of the Trustee Act 1936. (5) In addition, the appointing authority (being the Minister or the Scheme Administrator) may authorise a person or body appointed as a scheme entity under this regulation to appoint another person or body to undertake any scheme function that has been conferred on the person or body by the initial appointment. (6) A person or body appointed under subregulation (5)— (a) may perform functions specified in the instrument of appointment that has been conferred on the scheme entity that made the appointment; and (b) in so doing will be— (i) subject to the direction and control of the scheme entity that made the appointment; and (ii) taken to be a scheme entity for the purposes of these regulations. (7) In the performance of a function under these regulations, a person or body appointed under this regulation is not, except as otherwise provided by these regulations, subject to the direction or control of the Minister. (8) The appointment of a person or body under this regulation may be made on any terms or conditions determined by the relevant appointing authority. Division 2—Scheme entity functions 10—Scheme administration functions (1) The scheme administration functions are— (a) to implement and administer the scheme including (without limitation) to establish governance and financial arrangements for the purposes of the scheme; and (b) to conduct a scheme tender at the request of the Minister and in accordance with any relevant Minister's guidelines; and (c) to develop a tender model, processes and systems; and (d) to prepare tender and contractual documentation; and (e) to advise the Financial Vehicle in relation to the contractual management of FERM contracts to the extent considered appropriate by the Scheme Administrator; and (f) at the direction of the Minister, to develop a risk management framework for the scheme to protect the financial interests of South Australian electricity consumers— (i) in connection with the risks associated with FERM contracts; and (ii) otherwise in connection with the functions of the Financial Vehicle; and (g) to provide information to the Scheme Regulator in connection with the contribution determination processes associated with the scheme; and (h) any other functions conferred on a Scheme Administrator for the purposes of the scheme. (2) A risk management framework under subregulation (1)(f) is binding on the Financial Vehicle. (3) The Scheme Administrator may amend or substitute a risk management framework under subregulation (1)(f) from time to time and must do so at the direction of the Minister. 11—Scheme regulation functions (1) The scheme regulation functions are— (a) to oversee the operation and performance of the scheme including (without limitation)— (i) to prepare and provide to the Minister an annual report on the operation and performance of the scheme, in accordance with any requirements of the Minister; and (ii) subject to subregulation (3), to audit the performance of entities performing the scheme administration functions or the scheme financial functions to the extent determined to be necessary, appropriate or advisable by a Scheme Regulator or at the direction of the Minister; and (iii) to review and approve any risk management framework, or any amended or substituted risk management framework, developed for the purposes of the scheme; and (b) to oversee and monitor compliance with the provisions of the scheme by scheme entities and regulated entities; and (c) in relation to Part 5 Division 1— (i) to review a recognised electricity entity's NOI to ensure that the entity has acted in accordance with the Minister's guidelines and other relevant requirements applying under these regulations; and (ii) to obtain further information about a recognised electricity entity about a capacity commitment provided in an NOI (to such extent as is reasonably necessary in the circumstances); and (iii) to publish the results of any process undertaken under regulation 22 (to such extent as the Scheme Regulator thinks fit); and (d) to determine assessable costs under a FERM contract in accordance with the Scheme Regulator's guidelines when considered by the Scheme Regulator to be reasonably required to protect the long-term financial interests of South Australian electricity consumers; and (e) to issue contribution determinations, contribution notices and initial contribution notices for the purposes of the scheme; and (f) to administer the civil penalty scheme established by these regulations; and (g) any other functions conferred on a Scheme Regulator for the purposes of the scheme. (2) An annual report under subregulation (1)(a) may be included in the Scheme Regulator's annual report under regulation 17. (3) A Scheme Regulator may appoint an independent person to carry out— (a) an audit envisaged by subregulation (1)(a)(ii); or (b) an audit of the activities of a Scheme Regulator under the scheme. 12—Scheme financial functions (1) The scheme financial functions are— (a) to administer the Fund, including by managing the receipt and expenditure of funds in accordance with the scheme; and (b) to enter into FERM contracts with long duration capacity providers in circumstances prescribed by these regulations; and (c) to monitor and enforce contractual performance and compliance by long duration capacity providers in respect of FERM contracts; and (d) to provide information to the Scheme Regulator in connection with the contribution determination processes associated with the scheme, which may include— (i) compiling information that has been provided by other scheme entities for this purpose; and (ii) providing forecasts of the Financial Vehicle's financial liabilities under the scheme;; and (e) any other functions conferred on the Financial Vehicle under these regulations. (2) The trust assets of the Financial Vehicle acting as a trustee under these regulations are the Fund and the FERM contracts to which the Financial Vehicle is a party. (3) The Financial Vehicle must, in connection with the operation of subregulation (1)(c), notify the Scheme Regulator if the Financial Vehicle becomes aware that a long duration capacity provider has failed to comply with a capacity commitment under a FERM contract. Division 3—Related provisions 13—Establishment of entities The Minister may, for the purposes of the scheme, establish a body (including a company established under the Corporations Act 2001 of the Commonwealth) that may be appointed as a scheme entity. 14—Principles In the performance of a function under these regulations, a scheme entity must— (a) act independently and in the long-term financial interests of South Australian electricity consumers; and (b) act in a commercially reasonable and prudent way. 15—Scheme Regulator may request provision of information (1) The Scheme Regulator may, by written notice, request a prescribed entity to give the Scheme Regulator information the Scheme Regulator reasonably requires for the performance of its scheme regulation functions. (2) A notice under this regulation may be in a form determined by the Scheme Regulator. (3) A prescribed entity must comply with a request under this regulation within a period specified by the Scheme Regulator in the notice. (4) Nothing in this regulation limits or derogates from— (a) any power under another law to require the provision of information; or (b) any other requirement under another law relating to the provision of information. (5) In this regulation— prescribed entity means— (a) the Scheme Administrator or Financial Vehicle; or (b) a regulated entity. 16—Obligation on regulated entities to provide information (1) A prescribed entity must give to the Scheme Regulator, in the manner and form required by the Scheme Regulator, information relating to the compliance of the prescribed entity with the requirements of the scheme. (2) Nothing in this regulation limits or derogates from— (a) any other power under another law to require the provision of information; or (b) any other requirement under another law relating to the provision of information. (3) In this regulation— prescribed entity means— (a) the Scheme Administrator or Financial Vehicle; or (b) a regulated entity. 17—Annual reports (1) Each scheme entity must prepare an annual report. (2) Subject to this regulation, an annual report— (a) must be prepared by 31 August in each year; and (b) must report on the activities of the scheme entity for the financial year ending on the preceding 30 June; and (c) must include any other information, or provide a report in relation to any other matter, specified by the Minister's guidelines for inclusion in an annual report; and (d) except in the case of the Scheme Regulator—must, immediately after it has been finalised by the scheme entity, be furnished to the Scheme Regulator. (3) The Scheme Regulator must incorporate the annual reports received under subregulation (2)(d) into a consolidated annual report, which will include the Scheme Regulator's annual report, and furnish it to the Minister by 30 November, or another date determined or agreed by the Minister, in each year. (4) The Minister must ensure that an annual report furnished to the Minister under this regulation is published on a website determined by the Minister. 18—Suspension or removal of scheme entities (1) The appointing authority may, by notice in writing to a scheme entity, suspend or terminate the appointment of the scheme entity under this Part. (2) An appointing authority may not take action against a scheme entity under subregulation (1) unless the appointing authority is satisfied, on the basis of an audit that has been undertaken under regulation 11(1)(a)(ii), that the scheme entity has, in the performance of its functions, displayed incompetence, misconduct or incapacity to act under these regulations. (3) Before suspending or terminating the appointment of a scheme entity under this regulation, the appointing authority must— (a) advise the scheme entity in writing that action under this regulation to suspend or terminate the appointment is being contemplated and the basis on which this course of action is being considered; and (b) provide the scheme entity with a reasonable opportunity to make submissions and consider the submissions received. (4) Nothing in this regulation limits the operation of regulation 9. 19—Resignation from appointment A scheme entity may resign from an appointment under this Part by providing 6 months notice to the appointing authority or as agreed to by the appointing authority. 20—Replacement of Financial Vehicle (novation of contracts) (1) This regulation applies if there is a change in the person or body appointed as the Financial Vehicle (a relevant change). (2) A FERM contract to which the Financial Vehicle is a party will, on the day on which a relevant change occurs (the relevant day), be taken to be a contract between the person or body which becomes the Financial Vehicle (the relevant entity) and the other party to the contract at that time. (3) In connection with subregulation (2) but subject to subregulation (4), on and from the relevant day— (a) the rights and liabilities of the person who has ceased to be the Financial Vehicle (the former party) under the contract vest in and attach to the relevant entity as the Financial Vehicle in substitution for the former party; and (b) the former party is wholly released and discharged from the contract; and (c) a reference in the contract to the former party as a party to the contract will be taken to be a reference to the relevant entity as a party to the contract. (4) Subregulation (3) operates subject to any agreement between the former party and the relevant entity about rights or liabilities, or other relevant matters, under a contract to which this regulation applies. (5) The former party must arrange for any relevant trust assets to be to be transferred to the relevant entity in connection with a relevant change and the operation of this regulation. Part 4—Fund 21—Establishment of Fund (1) A fund is established for the purposes of the scheme (the Fund). (2) The Fund will be administered by the Financial Vehicle. (3) The Fund must be kept at an ADI. (4) The Fund will consist of— (a) any money paid by a TNSP under a contribution notice or an initial contribution notice; and (b) any money paid by a long duration capacity provider under a FERM contract; and (c) any money advanced by a scheme entity for payment into the Fund; and (d) any money advanced by the Treasurer for payment into the Fund; and (e) any money appropriated by Parliament for payment into the Fund; and (f) any money received as voluntary contributions to the Fund made by a person or body; and (g) any amount paid as a civil penalty under regulation 34; and (h) income and accretions from investment of money from the Fund; and (i) other money paid into the Fund under or for the purposes of these regulations. (5) Money advanced under subregulation (4)(c) or (d) may be in the nature of a loan. (6) A loan under subregulation (4)(d) may be made to the Financial Vehicle, or on some other basis determined by the Treasurer. (7) A loan may be made on any terms and conditions— (a) agreed between the relevant parties; or (b) determined by the Treasurer. (8) The Fund will be applied towards— (a) payments to a long duration capacity provider under a FERM contract; and (b) money otherwise required to meet the financial liabilities of the Financial Vehicle in respect of scheme financial functions; and (c) costs incurred by scheme entities in the performance of their functions under these regulations, including costs associated with the administration and implementation of the scheme, to the extent authorised by the Minister; and (d) costs incurred by the Minister in paying a scheme entity to act under these regulations; and (e) a FERM Scheme Amount payable to a TNSP; and (f) payments due under the terms or conditions of a loan under this regulation; and (g) the repayment of any money advanced or applied by the Treasurer, the Minister, an administrative unit or other State Government authority for the purposes of these regulations; and (h) other costs associated with the implementation of the scheme authorised by the Minister; and (i) other money required to be paid from the Fund under these regulations. (9) Subject to subregulation (10), a payment of money under this regulation may include— (a) the reimbursement of an amount that has already been paid; and (b) a payment towards any liability or costs that have already been incurred; and (c) a payment to a third party in connection with the operation or effect of these regulations. (10) Nothing in this regulation allows— (a) the payment of money in respect of a liability incurred before the commencement of these regulations; or (b) the payment of money into, or the application of money from, the Fund in connection with OEM functions (11) Any money not immediately required for the purposes of the Fund may be invested by the Financial Vehicle in any form of investment that is consistent with the Financial Vehicle's responsibility to act in a prudent way and that is authorised by the Minister for the purposes of this subregulation. Part 5—Commitments and arrangements to achieve Firm Energy Target Division 1—Notice of intention 22—Notice of intention (1) The Minister may direct the Scheme Regulator to issue a request (an NOI request) to recognised electricity entities to submit a notice of intention (an NOI) to the Scheme Regulator in accordance with this regulation. (2) A recognised electricity entity who receives an NOI request must submit an NOI within the time specified in the NOI request and in accordance with any relevant requirements specified by the Minister's guidelines. (3) An NOI must— (a) be submitted in a form specified by the Minister's guidelines; and (b) in respect of a period specified in the NOI request (a commitment period) indicate— (i) the recognised electricity entity's intention in respect of the provision of long duration dispatchable electricity capacity; and (ii) the level of long duration dispatchable electricity capacity that the recognised electricity entity intends to provide in the NEM during the commitment period; and (c) include any other information specified by the Minister's guidelines. (4) A recognised electricity entity who has indicated an intention to provide long duration dispatchable electricity capacity in the NEM over the relevant commitment period must provide that capacity during that commitment period at the level indicated in the NOI. (5) The Scheme Regulator may exempt a recognised electricity entity from the operation of subregulation (4) after taking into account any provision made by the Minister's guidelines. (6) A recognised electricity entity must, by notice in writing to the Scheme Regulator— (a) revise an NOI that has been submitted under this regulation if the entity has indicated in the NOI that the entity intends to withdraw from or exit the NEM or otherwise cease to provide long duration dispatchable electricity capacity during the commitment period to which the NOI relates but then changes its plans in this regard; or (b) seek the Scheme Regulator's approval to revise an NOI that has been submitted under this regulation if the entity wishes to change the level of long duration dispatchable electricity capacity that the recognised electricity entity intends to provide in the NEM during the relevant commitment period. (7) The Scheme Regulator must provide a report to the Minister with respect to— (a) the NOIs submitted by recognised electricity entities under this regulation; or (b) any revisions made under subregulation (6). Division 2—Negotiated contracts 23—Negotiated contracts (1) This regulation applies if— (a) a recognised electricity entity has indicated in an NOI that the entity intends to withdraw from or exit the NEM or otherwise cease to provide long duration dispatchable electricity capacity during the commitment period to which the NOI relates; or (b) a recognised electricity entity provides advice that the entity is, or is expected to be, in breach of a capacity commitment indicated in an NOI. (2) The Minister may, on account of the circumstances specified in subregulation (1), direct the Scheme Administrator to enter into negotiations with the recognised electricity entity for the provision of long duration dispatchable electricity capacity. (3) The Scheme Administrator may, at the end of negotiations under subregulation (2) and after taking into account any requirements specified by the Minister's guidelines or in a direction of the Minister under this regulation, and after consulting with the Minister, recommend to the Financial Vehicle that a contract be entered into with the recognised electricity entity for the provision of long duration dispatchable electricity capacity. (4) The Financial Vehicle may, on the basis of a recommendation under subregulation (3), enter into a contract with the recognised electricity entity for the provision of long duration dispatchable electricity capacity. (5) The Financial Vehicle must ensure that any contract entered into under this regulation is consistent with any relevant requirements or terms specified by the Minister's guidelines or in a direction of the Minister under this regulation. (6) A recognised electricity entity who is a party to a contract under this regulation must comply with a capacity commitment specified in the contract in accordance with the terms of the contract. (7) If a recognised electricity entity enters into a contract under this regulation— (a) any capacity commitment under the relevant NOI ceases to apply; and (b) the recognised electricity entity will be taken not to have breached any capacity commitment under the NOI. Division 3—Scheme tenders 24—Scheme tenders (1) The Minister may from time to time direct the Scheme Administrator to undertake a competitive tender process to assist in meeting the Firm Energy Target or otherwise for the purposes of the scheme. (2) In connection with subregulation (1)— (a) the tender process must be undertaken in accordance with any relevant requirements specified by the Minister's guidelines or in a direction of the Minister under this regulation; and (b) a long duration capacity provider who meets any eligibility criteria specified by the Minister's guidelines or in a direction of the Minister under this regulation is eligible to participate in the tender process; and (c) a long duration capacity provider participating in the tender process must submit a response and otherwise act in accordance with any relevant requirements specified by the Minister's guidelines or in a direction of the Minister under this regulation; and (d) various types of contracts may be offered as a result of a tender process, as provided by the Minister's guidelines or in a direction of the Minister under this regulation. (3) The Scheme Administrator may, at the conclusion of the tender process and after taking into account any requirements specified by the Minister's guidelines or in a direction of the Minister under this regulation, enter into negotiations with any successful tenderer for the provision of long duration dispatchable electricity capacity. (4) The Scheme Administrator may, after taking into account any requirements specified by the Minister's guidelines or in a direction of the Minister under this regulation, and after consulting with the Minister, recommend to the Financial Vehicle that a contract be entered into with the relevant entity for the provision of long duration dispatchable electricity capacity. (5) The Financial Vehicle may, on the basis of a recommendation under subregulation (4), enter into a contract with the relevant entity for the provision of long duration dispatchable electricity capacity. (6) A long duration capacity provider who is a party to a contract under this regulation must comply with a capacity commitment specified in the contract in accordance with the terms of the contract. (7) The Scheme Administrator must, at the conclusion of a tender process undertaken under this regulation, publish a notice setting out the outcomes of the tender process in accordance with the Minister's guidelines or in a direction of the Minister under this regulation. Division 4—Transitional and novated contracts 25—Transitional contracts (1) The Minister may, during the transition period, enter into a contract with 1 or more long duration capacity providers to provide long duration dispatchable electricity capacity in order to assist in meeting the Firm Energy Target or otherwise for the purposes of the scheme. (2) A contract entered into under this regulation will be for a term agreed between the Minister and the long duration capacity provider (which may be a term that extends beyond the end of the transition period). (3) A contract entered into under this regulation will, on a day determined by the Minister (the relevant day), be taken to be a contract between the Financial Vehicle and the long duration capacity provider who is the other party to the contract. (4) In connection with subregulation (3) but subject to subregulation (5), on and from the relevant day— (a) the rights and liabilities of the Minister under the contract vest in and attach to the Financial Vehicle in substitution for the Minister; and (b) the Minister is wholly released and discharged from the contract; and (c) a reference in the contract to the Minister as a party to the contract will be taken to be a reference to the Financial Vehicle as a party to the contract. (5) Subregulation (4)(a) and (b) do not apply to or in relation to a right or liability of the Minister specified by the Minister by notice in writing to the Financial Vehicle and the other party to the contract (and the Minister is not released or discharged from any such liability). (6) The parties to a contract entered into under this regulation may vary or extend the contract, including after the end of the transition period, subject to the qualification that, on and from the relevant day, the Financial Vehicle must consult with the Minister before a variation or extension (if any) is made. (7) A long duration capacity provider who is a party to a contract under this regulation must comply with a capacity commitment specified in the contract in accordance with the terms of the contract. (8) Subregulation (7) does not apply to any capacity commitment excluded from the operation of that subregulation by the Minister under the terms of the contract. 26—Deemed contracts (1) This regulation applies to any contract between the Minister and another party for the provision of long duration dispatchable electricity capacity entered into before the commencement of these regulations which is declared by the Minister, by notice in the Gazette, to be a contract that is subject to the operation of this section (including such a contract as varied or extended at any time). (2) An existing designated electricity entity who is a party to a contract to which this regulation applies is taken to be a long duration capacity provider for so long as they remain a party to the contract. (3) A contract to which this regulation applies will, on a day determined by the Minister (the relevant day), be taken to be a contract between the Financial Vehicle and the existing designated electricity entity who is the other party to the contract. (4) In connection with subregulation (3) but subject to subregulation (5), on and from the relevant day— (a) the rights and liabilities of the Minister under the contract vest in and attach to the Financial Vehicle in substitution for the Minister; and (b) the Minister is wholly released and discharged from the contract; and (c) a reference in the contract to the Minister as a party to the contract will be taken to be a reference to the Financial Vehicle as a party to the contract. (5) Subregulation (4)(a) and (b) do not apply to or in relation to— (a) a liability incurred by the Minister before the commencement of these regulations; or (b) a right or liability specified by the Minister by notice in writing to the Financial Vehicle and the other party to the contract, (and the Minister is not released or discharged from any such liability). (6) The parties to a contract to which this regulation applies may vary or extend the contract, subject to the qualification that, on and from the relevant day, the Financial Vehicle must consult with the Minister before a variation or extension (if any) is made. (7) An existing designated electricity entity who is a party to a contract to which this regulation applies must comply with a capacity commitment specified in the contract in accordance with the terms of the contract. (8) Subregulation (7) does not apply to any capacity commitment excluded from the operation of that subregulation by the Minister under the terms of the contract. Part 6—Contributions 27—Annual contribution determinations (1) The Scheme Regulator must, before 1 March in each year, in respect of each TNSP, make a determination (a contribution determination) as to the amount of money that is to be paid into or out of the Fund for the following regulatory year (the relevant regulatory year). (2) A contribution determination must specify— (a) the amount (if any) that is to be recovered from each TNSP for the relevant regulatory year; and (b) the amount (if any) that is to be returned to each TNSP for the relevant regulatory year; and (c) a minimum prudent cash balance to be retained in the Fund. (3) In making a contribution determination, the Scheme Regulator— (a) will consult with the scheme entities to the extent specified by the Scheme Regulator's guidelines; and (b) must take into account the following: (i) the need to limit the variability in contribution determinations within a regulatory year (if relevant); (ii) the need to limit the variability in contribution determinations from year to year; (iii) the equitable allocation of amounts payable under the contribution determination between TNSPs (after applying any principles, methodologies or approaches specified by the Scheme Regulator's guidelines); (iv) the need for the Financial Vehicle to be able to meet its liabilities as they fall due; (v) the extent to which there is surplus money in the Fund after taking into account payments that must be made from the Fund in relation to the relevant regulatory year; (vi) information provided by the other scheme entities in connection with the making of the determination; and (c) will take into account any other matter specified in the Scheme Regulator's guidelines; and (d) may take into account any other matter considered relevant by the Scheme Regulator. (4) To the extent to which subregulation (3)(b)(v) applies, the Scheme Regulator may apply (in whole or in part) a surplus by doing 1 or both of the following: (a) reducing the amount payable by a TNSP under the scheme in a particular regulatory year; (b) returning an amount to a TNSP in a particular regulatory year, with any amount under this subregulation being applied on an equitable basis between the TNSPs to which the scheme applies (and after applying any principles, methodologies or approaches specified by the Scheme Regulator's guidelines). (5) The extent to which the Scheme Regulator acts under subregulation (4) is at the discretion of the Scheme Regulator having regard to the minimum prudent cash balance to be retained in the Fund and any other matter considered relevant by the Scheme Regulator. (6) The Scheme Regulator may require a TNSP to provide information specified by the Scheme Regulator for the purposes of making a contribution determination. (7) A TNSP must comply with a request under subregulation (6) within a period specified by the Scheme Regulator. (8) The Scheme Regulator must ensure that a contribution determination made under this regulation is published on a website determined by the Scheme Regulator. 28—Variation of contribution determinations (1) The Scheme Regulator may, by further determination, vary a contribution determination if it appears to the Scheme Regulator— (a) that the Financial Vehicle will not be able to meet its liabilities as they fall due; or (b) that the cash balance of the Fund has fallen, or is likely to fall, below the minimum prudent cash balance specified in the contribution determination. (2) The Scheme Regulator must ensure that a contribution determination, as varied under this regulation, is published on a website determined by the Scheme Regulator. 29—Contribution notices (1) The Scheme Regulator may, after making a contribution determination, by written notice served on a TNSP (a contribution notice), provide advice about the effect of the contribution determination on the TNSP. (2) A contribution notice must specify— (a) the amount (if any) to be paid by the TNSP under the contribution determination (which may include the amount being paid in instalments); and (b) the amount of money (if any) that is to be returned to the TNSP; and (c) the date or dates by which any payment must be made by the TNSP; and (d) the date or dates by which any money that is to be returned to the TNSP must be paid; and (e) the way in which each payment must be made; and (f) any other matter specified in the Scheme Regulator's guidelines. (3) A TNSP must comply with the requirements of a contribution notice. (4) A payment by a TNSP under a contribution notice must be made to the Financial Vehicle for payment into the Fund. (5) A payment to a TNSP under a contribution notice must be made by the Financial Vehicle from money standing to the credit of the Fund. (6) The amount to be paid by a TNSP under a contribution notice is recoverable by the Financial Vehicle as a debt in a court of competent jurisdiction (and once recovered is payable into the Fund). (7) If the Scheme Regulator has varied a contribution determination under regulation 28, this may be reflected by the variation of a contribution notice or by the issuing of a new or additional contribution notice. 30—Initial contribution notices (1) The Scheme Regulator must, at the direction of the Minister, by 1 or more written notices served on a TNSP (initial contribution notices), require the TNSP to pay an amount in order to— (a) make payments to long duration capacity providers who are required under a transitional FERM contract or deemed FERM contract to provide long duration dispatchable electricity capacity; (b) cover the costs of the administration and implementation of the scheme during the transition period; (c) enable a minimum prudent cash balance to be established or maintained in the Fund. (2) An initial contribution notice must specify— (a) the amount to be paid by the TNSP (which may include the amount being paid in instalments); and (b) the date or dates by which a payment must be made by the TNSP; and (c) the way in which each payment must be made; and (d) any other matter specified by the Scheme Regulator's guidelines. (3) In determining the requirements to be included in an initial contribution notice, the Scheme Regulator— (a) must take into account the following: (i) the equitable allocation of amounts payable between TNSPs (after applying any principles, methodologies or approaches specified by the Scheme Regulator's guidelines); and (ii) the need for the Financial Vehicle to be able to meet its liabilities as they fall due; and (b) may take into account any other matter considered relevant by the Scheme Regulator. (4) A TNSP must comply with the requirements of an initial contribution notice. (5) A payment by a TNSP under an initial contribution notice must be paid to the Financial Vehicle for payment into the Fund. (6) The amount to be paid by a TNSP under an initial contribution notice is recoverable by the Financial Vehicle as a debt in a court of competent jurisdiction (and once recovered is payable into the Fund). (7) An initial contribution notice may be issued under this regulation before a contribution determination is made under regulation 27. (8) Despite a preceding subregulation, the Minister may issue an initial contribution notice under this regulation instead of the Scheme Regulator if the Minister so determines and in such a case, for the purposes of subregulation (3)— (a) a reference to the Scheme Regulator will be taken to include a reference to the Minister; and (b) the Minister may apply any principles, methodologies or approaches determined by the Minister rather than as specified by the Scheme Regulator's guidelines. Part 7—FERM cost recovery scheme 31—Recovery and allocation of amounts through pricing (1) When a TNSP is determining prices for a scheme regulatory year in accordance with the requirements of the NER, the TNSP must— (a) recover a FERM Scheme Amount from Transmission Customers; or (b) return a FERM Scheme Amount to Transmission Customers, or both. (2) A FERM Scheme Amount (in whole or in part) must be passed on or returned in a scheme regulatory year by adjusting, in addition to the adjustment under clause 6A.23.3(h) of the NER, the annual service revenue requirement for prescribed common transmission services by adding or subtracting the FERM Scheme Amount as relevant). (3) An amount— (a) to be recovered from Transmission Customers in respect of a FERM Scheme Amount; or (b) to be returned to Transmission Customers in respect of a FERM Scheme Amount, will be incorporated into the TNSP's prices to be charged for prescribed common transmission services for each scheme regulatory year, as published by the TNSP in accordance with clause 6A.24.2(c) of the NER for the following financial year. (4) If— (a) a TNSP receives an initial contribution notice; or (b) a contribution notice is varied or a new or additional contribution notice is issued under regulation 29(7), the TNSP may republish its prices for prescribed common transmission services in order to recover the FERM Scheme Amount under the relevant notice in the same scheme regulatory year, including where the prices for prescribed common transmission services have already been determined for that scheme regulatory year in accordance with the requirements of the NER. (5) The TNSP must adjust the amount that would otherwise be recovered from or returned to Transmission Customers in a scheme regulatory year in respect of a FERM Scheme Amount to account for any over or under recovery of the FERM Scheme Amount in the previous scheme regulatory year. (6) Adjustments under subregulation (5) must be calculated by the TNSP so as to ensure that there is no systemic over or under recovery over time. (7) In order to comply with subregulation (6), the TNSP must, subject to any requirements in the Scheme Regulator's guidelines, ensure that the TNSP is able, as relevant, to— (a) recover from Transmission Customers no more or no less than the FERM Scheme Amounts it incurs; and (b) return to Transmission Customers no more or no less than the FERM Scheme Amounts it receives; and (c) adjust for the time cost of money based on the allowed rate of return in the relevant transmission determination of the relevant scheme regulatory year. (8) For the avoidance of doubt, a FERM Scheme Amount is to be treated as outside the TNSP's maximum allowed revenue under clause 6A.3 of the NER. (9) Nothing in this regulation prevents a Co-ordinating Network Service Provider from recovering a FERM Scheme Amount on behalf of a TNSP in accordance with the NER. 32—Records (1) A TNSP must keep records of the manner in which it has— (a) recovered a FERM Scheme Amount; and (b) returned a FERM Scheme Refund Amount; and (c) calculated an adjustment for over and under recovery. (2) A TNSP must keep any other records or information required by the Scheme Regulator's guidelines. (3) A TNSP must, at the request of the Scheme Regulator, provide records or information kept for the purposes of this regulation within a period specified by the Scheme Regulator. Part 8—Related obligations on market participants 33—Reliability and market liquidity obligations (1) To support or facilitate the scheme's purpose— (a) a Market Customer is required to act in accordance with any reliability obligation; and (b) a recognised electricity entity, or a new designated electricity entity who is a party to a contract under regulation 24, is required to act in accordance with any market liquidity obligation. (2) For subregulation (1)— (a) the reliability obligation is an obligation to undertake certain contracting activities, and to take related steps, in the NEM by purchasing a certain number of contracts, or having a certain net contracting position, over a particular period, in accordance with requirements specified by the Minister's guidelines; and (b) the market liquidity obligation is an obligation to undertake certain contracting activities, and to take related steps, in the NEM by offering a certain number of contracts, or having a certain net contracting position, over a particular period, in accordance with requirements specified by the Minister's guidelines. (3) The Minister's guidelines may (without limitation) may make provision for— (a) the application of an obligation as it applies to certain Market Customers, recognised electricity entities, or new designated electricity entities who are parties to contracts under regulation 24, or in relation to certain contracts or contracting positions; and (b) the nature of an obligation; and (c) the transfer of an obligation to another a person; and (d) any other matter that is considered by the Minister as being necessary or expedient for the purposes of this regulation. (4) The Minister may— (a) by notice in writing to a person who would otherwise be required to comply with an obligation under this regulation and to the Scheme Regulator, exempt the person from the need to comply with the obligation; and (b) by subsequent notice in writing to the relevant person and to the Scheme Regulator, revoke an exemption under this subregulation. (5) The Scheme Regulator's guidelines may (without limitation) make provision for reporting requirements in connection with the operation of this regulation. (6) A person who is required to comply with an obligation under this regulation must comply with any reporting requirements that apply in relation to the person under subregulation (5). Part 9—Civil penalty regime 34—Civil penalties (1) For the purposes of section 15B(2)(g) of the Act, this regulation makes provision for civil penalties in connection with the scheme. (2) The provisions of the National Electricity (South Australia) Law (the Law) that relate to the creation and imposition of civil penalties are applied for the purposes of the scheme with the following modifications: (a) section 2AA of the Law (as it applies under this regulation) is modified so that a civil penalty provision includes a relevant regulation, and the other provisions of the Law that refer to a civil penalty provision will be taken to include a reference to a relevant regulation; (b) section 2AB of the Law (as it applies under this regulation) is modified so that— (i) the designated tier 1 regulations are taken to be civil penalty provisions prescribed by the Regulations under section 2AB(1)(c); and (ii) the designated tier 2 regulations are taken to be civil penalty provisions prescribed by the Regulations under section 2AB(1)(b); (c) section 61 of the Law (as it applies under this regulation) is modified so that an application to the Court in respect of a breach of a relevant regulation may be made by the Scheme Regulator on behalf of the State (as if a breach of a relevant regulation were a breach of the Regulations); (d) sections 62 and 64 of the Law (as they apply under this regulation) are modified so that a reference to a breach of the Regulations includes a breach of a relevant regulation; (e) section 69 of the Law (as it applies under this regulation) is modified so that a civil penalty with respect to a breach of a relevant regulation is payable to the State for payment into the Fund; (f) Part 6 Division 5 of the Law (as it applies under this regulation) is modified so that— (i) a reference to a tier 1 civil penalty provision includes a reference to a designated tier 1 regulation; and (ii) a reference to a tier 2 civil penalty provision includes a reference to a designated tier 2 regulation; and (iii) a reference to the AER were a reference to the Scheme Regulator; (g) Schedule 2 clause 37A of the Law (as it applies under this regulation) is modified so that a reference to a civil penalty amount includes a reference to a civil penalty amount payable with respect to a breach of a relevant regulation. (3) In this regulation— designated tier 1 regulation means any of the following: (a) regulation 22(2); (b) regulation 22(4); (c) regulation 23(6); (d) regulation 24(6); (e) regulation 25(7); (f) regulation 26(7); (g) regulation 29(3); (h) regulation 30(4); (i) regulation 31; (j) regulation 33(1); designated tier 2 regulation means any of the following: (a) regulation 15(3) (in relation to a regulated entity); (b) regulation 16(1) (in relation to a regulated entity); (c) regulation 27(7); (d) regulation 32; (e) regulation 33(6); relevant regulation means a designated tier 1 regulation or designated tier 2 regulation. Part 10—Application of Orderly Exit Management Framework 35—Application of Orderly Exit Management Framework For the purposes of section 118AB of the National Electricity (South Australia) Law— (a) the whole of Part 8AA of that Law applies in South Australia on and from the day on which these regulations come into operation; and (b) the financial vehicle for the purposes of that Part (the OEMF financial vehicle) is to be established (as the Minister thinks fit)— (i) if the Scheme Administrator has appointed a Financial Vehicle under regulation 9(3)—by the Minister conferring, by notice in the Gazette, the functions referred to in section 118AS of the National Electricity (South Australia) Law on the Financial Vehicle; or (ii) in any case—by the Minister establishing a body (including a company established under the Corporations Act 2001 of the Commonwealth) and, by notice in the Gazette, identifying that body as the financial vehicle for the purposes of Part 8AA. Part 11—Miscellaneous 36—Delegations (1) For the purposes of section 15B(2)(e) of the Act, the Minister may delegate any of the Minister's functions— (a) to a scheme entity; or (b) to another specified body or person (including a person for the time being holding or acting in a specified office or position). (2) A delegation under this regulation— (a) may be absolute or conditional; and (b) does not derogate from the power of the Minister to act in any particular matter; and (c) is revocable at will by the Minister. 37—Guidelines made by Scheme Regulator (1) The Scheme Regulator may make guidelines in respect of the processes and methods that will apply for making or varying contribution determinations and related matters, or that will otherwise apply with respect of the scheme, including guidelines with respect to— (a) consultation processes in connection with making a contribution determination; and (b) the collection any payment of money under a contribution notice or an initial contribution notice; and (c) the roles and responsibilities of scheme entities in connection with the contribution determination processes; and (d) principles, methodologies or approaches that are to be applied in allocating amounts to TNSP's under a contribution determination; and (e) annual reporting requirements for scheme entities; and (f) reporting requirements for regulated entities; and (g) any other matter that is— (i) contemplated by these regulations as being the subject of guidelines made by the Scheme Regulator for the purposes of the scheme; or (ii) considered by the Scheme Regulator as being expedient in connection with the Scheme Regulator's functions under these regulations. (2) The Scheme Regulator must ensure that any guidelines made by the Scheme Regulator under this regulation are published on a website determined by the Scheme Regulator. 38—Variation of licence conditions For the purposes of section 15B(2)(m) of the Act, it will be a condition of a TNSP's licence issued under Part 3 Division 1 of the Electricity Act 1996 that the TNSP will comply with the requirements of an initial contribution notice or contribution notice under these regulations. 39—Application of Competition and Consumer Act 2010 of Commonwealth The Competition and Consumer Act 2010 of the Commonwealth, section 44AAEC extends to and has effect for the purposes of these regulations. 40—Competition authorisation (1) Relevant conduct is conduct that is specifically authorised by these regulations for the purposes of the Competition and Consumer Act 2010 of the Commonwealth and the Competition Code of South Australia. (2) Conduct authorised by this regulation is authorised to the extent, if any, that it would otherwise contravene Part IV of the Competition and Consumer Act 2010 of the Commonwealth and the Competition Code of South Australia. (3) In this regulation— giving effect to a requirement includes— (a) complying with an obligation arising in connection with the requirement; and (b) exercising or enforcing a right or power arising in connection with the requirement; relevant conduct means the following conduct: (a) entering into negotiations, or entering into a contract, under regulation 23; (b) entering into negotiations, or entering into a contract, under regulation 24; (c) giving effect to a requirement under a FERM contract; (d) exercising a function in relation to, or giving effect to a requirement in relation to, any other matter under these regulations by a scheme entity. 41—Exclusion of operation of Corporations Act The performance by the Scheme Administrator of the scheme administration functions insofar as it relates to— (a) giving advice or making a recommendation to the Financial Vehicle; or (b) dealing with a financial product by arranging for a recognised electricity entity or a successful tenderer to enter into a FERM contract, is declared to be an excluded matter for the purposes of section 5F of the Corporations Act 2001 of the Commonwealth in relation to sections 911A and 911B of that Act. 42—Review (1) The Minister must cause a review of the scheme to be carried out within 5 years after the commencement of these regulations. (2) The Minister must publish the outcome of the review in such manner as the Minister determines to be appropriate. Legislative history Notes • For further information relating to the Act and subordinate legislation made under the Act see the Index of South Australian Statutes or . Principal regulations Year No Reference Commencement 2025 104 Gazette 18.9.2025 p3857 18.9.2025: r 2