A more collaborative approach between the Australian Energy Regulator (AER) and key stakeholders can lead to better outcomes for consumers.
In a recent speech, Paula Conboy, Chair of the AER, spoke about the need for the AER to engage with our key stakeholders in a less adversarial environment, especially for network revenue determination processes. The AER is responsible for the economic regulation of electricity and gas network service providers across most of Australia. More constructive engagement can give consumers a greater say on energy network prices, and is increasingly important in the context of the ongoing transformation of the sector.
The title of this speech is: ‘Working together to restore confidence in energy regulation’.
With this in mind, the AER is pleased to be part of a new, joint initiative with Energy Networks Australia (ENA) and Energy Consumers Australia (ECA) that will explore ways to improve sector engagement, and identify opportunities for regulatory innovation.
The three organisations believe there are opportunities to better incorporate consumer views in revenue determination processes, and to improve consumer trust and confidence in network regulation. Energy customers’ priorities should drive business and regulatory outcomes.
Through this joint initiative, we aim to explore options for consumers and businesses who want to have deeper engagement in the development and approval of regulatory proposals. Ultimately, this may lead to developing an alternative path for network businesses to take in forming their regulatory proposals, and for the AER in approving those proposals.
The AER is looking at ways to closely engage with the network businesses and consumers to identify key issues earlier, and work collaboratively to resolve them—even before a regulatory proposal is lodged. The AER’s revenue determination process under the National Electricity Rules or National Gas Rules could then be aligned with the degree of agreement reached between the business and suitably qualified customer representatives. This could mean some AER decision processes are streamlined or expedited, as long as the proposal meets the long term interests of consumers.
It is an experimental approach to promote regulatory innovation. We intend to learn by ‘doing’. The goal is to undertake a trial in the development of one or more network businesses’ revenue proposals in the near future, and consider further reform opportunities. This process of exploration will be an important outcome of the joint initiative in itself.
The AER, ENA and ECA will consult with our stakeholders on this initiative, including through a discussion paper, workshop and public submissions process.
If you would like to receive updates throughout this consultation process, please register your interest at: RegulatoryInnovation@aer.gov.au.