Regulatory update: Productivity Commission’s inquiry into the national access regime

  • The Department of Treasury released six broad terms of reference for the Productivity Commission’s twelve month inquiry into the national access regime (the regime) set out in part 111A of the Competition and Consumer Act 2010 (Cth).  The inquiry will assess the role and efficacy of the national framework of access regulation and propose ways of improving its operation to ensure the efficient operation of and investment in essential infrastructure to promote competition and efficient investment in dependent markets.  An issues paper is due for release in November 2012.

Energy

  • The Australian Energy Market Commission (AEMC) announced new obligations for electricity distribution businesses to publish demand side engagement strategies focussed on developing alternatives to network expenditure in the National Electricity Market (NEM).  The obligations are part of a package of reforms which create a NEM-wide framework for network planning and expansion – replacing current arrangements which vary across each state and territory.
  • The Australian Energy Regulator (AER) accepted an application for gas retailer authorisation from ERM Power Retail Pty Ltd, a niche retailer focusing on large commercial and industrial customers that is looking to expand its retail business to include gas.
  • In April the Australian Competition Tribunal made orders (set out in Application by United Energy Distribution Pty Limited (No 2) [2012] ACompT 8) affecting various aspects of the Victorian distribution network service providers (DNSPs) 2011-15 distribution determinations.  The AER has now amended each of the Victorian DNSPs' 2011-15 distribution determinations in accordance with the Tribunal’s orders for Citipower, Powercor, Jemena, SP AusNet and United Energy.  The remade determinations will have the effect of increasing network charges in the remaining years of the current regulatory period, between 2013-2015.
  • The AEMC published submissions from Transgrid and the Energy Networks Association in response to an AEMC consultation paper on how to transition electricity network service providers (NSPs) to proposed rule changes on the economic regulation of network services.  TransGrid’s submission is an alternative proposal developed in consultation with the AER and a number of other NSPs.
  • The AER has published its latest Quarterly Compliance Report: Electricity and Gas Laws (previously named Wholesale Markets Quarterly Compliance Report) which summarises the AER's compliance monitoring and enforcement activities in the wholesale electricity and gas markets during the July-September 2012 period.
  • Acting AER Chairman, Ed Willett, addressed the Energy Users Association of Australia Annual Conference with the message that reforming the rules for setting prices and for electricity network businesses is a vital part of market reform.  Mr Willett emphasised that the AEMC’s recently announced proposed rule changes were a significant step forward and would improve opportunities for meaningful customer involvement.
  • The AER has released its determination on SPI Electricity Pty Ltd’s (SP AusNet) cost pass through application for the recovery of costs arising from its implementation of certain Victorian Bushfire Royal Commission recommendations.
  • The AEMC published a final rule determination in response to a proposal from the International Copper Association Australia (formerly the Copper Development Centre) regarding distribution losses.  The Commission determined to make a more preferable final rule which requires DNSPs to provide an explanation of how they take the cost of distribution losses into account as part of the reporting requirements under the new Distribution Annual Planning Report.
  • AEMC Chairman John Pierce addressed the Eastern Australia's Energy Markets 2012-25 forum in Sydney. He participated in the session on the impact of the carbon price on the energy market during the period 2012-25.
  • The AEMC announced that Commissioner Neville Henderson was reappointed as the Chairperson of the AEMC Reliability Panel until 18 October 2014. 

Communications

  • The ACCC received a new Special Access Undertaking (SAU) from NBN Co, replacing the SAU lodged by NBN Co in late 2011 and withdrawn on 7 September 2012.  The SAU, a summary of the SAU and supporting submissions are available on the NBN Co website.
  • The ACCC made a final access determination (FAD) for the declared local bitstream access service (LBAS) which will apply for three years and expire on 5 October 2015.  The LBAS is a wholesale access service for fixed line networks that are built or upgraded after January 2011, and is a ‘last mile’ fixed line service provided to residences and small business where the download transmission rate is superfast (25 megabits per second (Mbps) or faster).  It does not apply to the NBN or to wireless or satellite networks.  The FAD contains price and non-price terms and conditions for a 25/50 Mbps LBAS service.