Forecasting, Ordering and Provisioning : Can an Access Provider require a compensation formula for cancelled orders and over forecasting or impose a penalty clause for early cancellation?

Yes. Pursuant to subsection 5.6.14 of the MSA, an Access Provider shall not seek to recover any costs or expenses incurred due to its acceptance of a Forecast from an Access Seeker if the Forecast is not met by the Access Seeker unless: 

(a) such costs and expenses were reasonably and necessarily incurred by the Access Provider; 
 

(b)  the Access Provider reasonably seeks to mitigate its loss over a six month period (including through its own usage); and 

(c) the Access Provider only recovers from the Access Seeker 75% of such costs and expenses which could not be mitigated under subsection 5.6.14(b) of the MSA.
 

In addition, subsection 5.7.26 of the MSA also provides that cancellation is to be at no penalty, an Access Provider shall only charge an Access Seeker which has cancelled or varied an Order no more than the costs necessarily incurred by the 12 

Access Provider in relation to the cancelled or varied Order, reduced by the level at which those costs have been or would have been (had the Access Provider used its best endeavours to do so), mitigated over a six (6) month period after the date of 

cancellation or variation.