New Reg has been a joint initiative between the AER, Energy Networks Australia (ENA) and Energy Consumers Australia (ECA) to explores ways to improve sector engagement, and identify opportunities for regulatory innovation. The goal of this initiative was to ensure that customers’ preferences drive energy network businesses proposals and regulatory outcomes. The agencies jointly released a draft process to enable consumer perspectives are better reflected in regulatory proposals in advance of lodging those proposals for the AER’s assessment. This draft process is called New Reg: Towards Consumer-Centric Energy Network Regulation.
AusNet Services has trialled the trial of the New Reg process in the development of its regulatory proposal for the 2021-25 period. Information on AusNet’s consultation, including opportunities to be involved in the consultation, is available from the AusNet Services website.
The AER engaged Cambridge Economic Policy Associates (CEPA) to evaluate AusNet Services trial of the New Reg process. CEPA has released its final evaluation report which is available below.
Under the New Reg process the most significant departure from traditional practice is that a Customer Forum negotiates aspects of the regulatory proposal in advance of lodgement with the AER. The Customer Forum does not represent the perspectives of particular interests, instead it must conduct research and customer engagement to ensure it can effectively represent the perspectives of all the network businesses' customers.
The Customer Forum’s representatives are selected to credibly represent perspectives of all end users, be they residential, small business or commercial and industrial. These persons are also required to have relevant skills and experience to ensure they function as an effective and robust counterparty to the network business.
Two key documents detail the process and set out responsibilities of the parties involved:
- The Early Engagement Plan, which is a document provided to the AER by the network business outlining the process the business intends to undertake to develop its regulatory proposal; and
- The Early Engagement Agreement (or Memorandum of Understanding), which is between the network business, the customer forum and the AER and sets out the roles and expectations of each of the parties and broader governance arrangements for the trial’s conduct.