Economic Regulatory Framework – Response to approach paper


David Havyatt

Energy Consumers Australia welcomes the Australian Energy Market Commission’s (AEMC or the Commission) approach to the task of annual reviews of the electricity network economic regulatory framework.

In this response we make a number of high level observations on matters raised in the Approach Paper (the Paper). Our observations are structured under three themes; the opportunity presented by the review, observations on the approach and observations and observations about the current state of the market.

Energy Consumers Australia has separately provided responses to the Approach Paper on the Distribution Market Model. Our observations in that paper are not repeated here.

A key motivation for the review was the stress test that identified the risk from underutilisation of network assets. As demand has already been declining but networks were slow to react to that decline there is already extensive underutilisation.

The economic regulatory framework is very complex and informed discussion for the review would be facilitated by the Commission publishing a simple summary of the whole regime as an early output.

The full Approach paper can be read here.