Have your say on improving prudential security arrangements

We invite you to share your feedback on the issues and options for improving prudential security requirements for small retailers.

Prudential requirements are financial obligations on purchasers of electricity on the wholesale spot market. They require funds to be paid to the clearing manager in advance, to ensure generators can always be paid for the electricity they supply. This is important because electricity is consumed before it can be invoiced and paid for, and because generators are legally required to sell it through the wholesale market.

We think some small and practical adjustments could be made to the current prudential requirements to make it easier for smaller retailers to operate and grow their businesses without increasing risk to the wholesale market.

Proposed options

We are seeking feedback on proposals to:

• adjust the ‘adder’ component of the exit period prudential margin more frequently than once a year (the adder accounts for potential unexpected upswings in wholesale prices)

• reduce the post-default exit period to 14 days (from the current 18 days) for retailers with 1000 or fewer ICPs, with an equivalent reduction to the Authority’s trader default process to offset any increased risk to generators

• reallocate residual funds held in the clearing manager’s account from generators to retailers on a scaled basis.

We are also seeking feedback on an option to enable ASX hedges to be taken into account in the calculation of prudential requirements. We want to better understand the likely demand for and potential benefits of any such change. Your insights will be valuable in shaping the future direction of any work on this issue.

We welcome your feedback by 5pm, 28 November 2025.

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