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Media release

AER appeal good for NSW energy consumers


Energy Consumers Australia today welcomed the Australian Energy Regulator’s decision to apply to the Federal Court for judicial review of the Australian Competition Tribunal decisions on the NSW and ACT energy distribution determinations.

“The decision of the Australian Competition Tribunal was inconsistent with the wording and intent of the 2012 amendments to the limited merits review process,” Energy Consumers Australia CEO Rosemary Sinclair said.

When the amendments were introduced they were described as ‘key in ensuring consumers do not pay more than necessary for the quality, safety, reliability and security of supply of electricity and natural gas under the national energy laws.’*

In February, the Tribunal ordered that the AER’s determination be set aside and that the AER needed to remake the determination.

“The decision of the Australian Competition Tribunal did not reflect its obligation to make a decision that was materially preferable as a whole in the long term interests of consumers.The Tribunal has made a piece-wise decision in the same manner as it did prior to the amendments,”Ms Sinclair said.

“We strongly support the Australian Energy Regulator’s appeal and hope it results in a better outcome in the long term interests of energy consumers.”

Ms Sinclair said a lot rested on the Federal Court’s decision in terms of the viability of the existing regulatory framework.

“The COAG Energy Council and its regulators have made clear the intention of the changes made in 2012 and the Tribunal’s decision is, without doubt, inconsistent with the new rules.

“The review by the Federal Court will determine whether the Limited Merits Review can operate as the COAG Energy Council expects. If the Court finds against the AER, then the Energy Council should consider removing the Limited Merits Review from the regulatory framework.”

In the absence of a revenue determination, the AER now needs to consult with stakeholders on how network prices will be set from 1 July. “As the sole owner of the three NSW electricity distribution networks the NSW Government should work with the AER and other stakeholders to determine an appropriate basis for network prices in New South Wales.”

*The Hon J.R.Rau SA Deputy Premier Second Reading Statement House of Assembly Hansard 26 September 2013 Page 7171