In December 2012, the AER commenced a program of work to deliver an improved regulatory framework focused on the long term interests of electricity consumers. This followed from changes to the National Electricity and Gas Rules that were published by the Australian Energy Market Commission on 29 November 2012. The AER has stated that its approach to regulation under the new framework will be set out in a series of guidelines to be published by the end of November 2013. It is proposed that the guidelines will deal with the AER approach to assessment of expenditure proposals, calculation of the allowed return on assets, allocation of costs, engagement with consumers, and more.
As part of the program, the AER also intends to establish a Consumer Challenge Panel from 1 July 2013. The panel will provide an independent consumer perspective to challenge the AER and network service providers during determination processes. The CCP was a key component of the Council of Australian Governments’ energy reform agenda agreed on 7 December 2012.
So far, as part of the program, the AER has released issues papers concerning Expenditure forecast assessment guidelines for electricity distribution and transmission and for Rate of Return Guidelines.
In March, the AER released issues/information papers or held consumer forums on:
- expenditure incentives guidelines – aimed at developing guidelines to create the right incentives to encourage efficient spending by businesses;
- service provider consumer engagement guidelines – for implementing consumer engagement strategies that are effective for all stakeholders;
- shared assets guidelines – focussing on sharing the revenue networks earn from shared assets with consumers;
- power of choice implementation – ensuring network companies are innovating and exploring demand management solutions; and
- confidentiality guidelines – for managing confidential information for an effective regulatory determination process.
Further, throughout March, the AER sought Expressions of Interest from individuals to apply to be a member of the CCP. The AER is establishing the CCP as part of reforms to ensure that decisions on network costs properly incorporate consumers’ interests. The CCP will sit within the AER, providing expert advice as part of the AER’s assessment of energy network businesses’ spending and regulatory proposals.
The AER held a Consumer forum in March 2013. A copy of the Summary of meeting is available here.