Energy Consumers Australia (ECA) welcomes the opportunity to comment on the Australian Energy Regulator???s (AER) Electricity Ring-Fencing Guideline: Preliminary positions paper (Position Paper).

Australian energy consumers may soon face a very different energy market as the drive to decarbonise the economy, falling technology costs and the new
digital economy come together to disrupt the current model.

This transition is blurring the hard boundaries that once existed between the various parts of the supply chain, and indeed the separation of the energy market from those for other products and services. This is placing stress on regulatory frameworks as they pre-date distributed generation, household-scale battery storage and “smart” technology. Policy makers and regulators in Australia and around the world are grappling with how to adapt to this new environment. Some jurisdictions, such as New York State, are proposing radical changes to the way the sector is organised to ensure that competition
can flourish and the benefits of new technology can be realised for consumers.

Although ECA comes to the issue of ring-fencing with these bigger questions about how to regulate a changing market in mind, we are conscious that the AER is working to a specific and confined mandate in this instance. That is, to develop an electricity ring-fencing guideline for the National Electricity Market (NEM) according to the National Electricity Rules (NER). In this submission we focus, therefore, on offering suggestions about the design of the Guideline to maximise its effectiveness.

The full submission can be read here.