Australian Energy Regulator issues compendium of electricity transmission regulatory guidelines

The Australian Energy Regulator today issued a compendium of regulatory guidelines for electricity transmission.

The compendium is a user-friendly compilation of the AER's guidelines. It includes a statement of regulatory principles explaining how the AER will regulate electricity transmission and covers issues including service standards and ring fencing requirements.

This compendium is largely based on approaches developed by the Australian Competition and Consumer Commission, but draws all material together as a complete set of reference documents.

"The AER has decided to adopt these guidelines as a starting point for its own approach to electricity transmission regulation", AER Chairman, Mr Steve Edwell, said. "The guidelines will evolve in consultation with industry participants and energy users. The compendium will be updated accordingly.

"The AER's objective is to implement best practice regulation. Its focus will be on promoting efficient investment through a stable and predictable regulatory regime.

"The issuing of the compendium is the first step towards fostering an environment in which service providers and other interested parties can predict the outcomes of AER processes through the application of a clear and transparent set of guidelines detailing the AER's regulatory approach", he said.

"Importantly, the compendium contains the Statement of Regulatory Principles which the AER has adopted as its starting point for transmission regulation. The SRP will lead to greater investment certainty for transmission networks by locking in existing asset valuations and by approving new investment upfront rather than assessing it after the money has been spent".

The AER will monitor the effectiveness of these guidelines and will review aspects in response to issues raised by industry and other interested parties and as circumstances, theory and best practice regulation develop. The AER acknowledges the need to provide stability in the regulatory framework it applies and will consider changes to its regulatory principles only in the context of a thorough consultation process.

"The AER's objective is to run a regulatory process that is as efficient and timely as possible. Where possible, the AER will look at ways to optimise information requirements and provide more guidance on the information required in applications", he said.

As well as reflecting the AER's role as national regulator, the guidelines incorporate the revised structure of electricity regulation arrangements under the National Electricity Law.

The compendium includes:

  • the Statement of Principles for the Regulation of Electricity Transmission Services (SRP)
  • the Regulatory Test
  • Service Standards Guidelines
  • Guidelines for the Negotiation of Discounted Transmission Charges
  • Transmission Ring-fencing Guidelines
  • Information Requirements Guidelines, and
  • the Post Tax Revenue Model and a handbook explaining the model.
Issued date: 
22 August 2005
AER reference: 
NR 002/05
Steve Edwell, AER Chairman 03 9290 1421 0423 047 554
Lin Enright, Media 02 6243 1108 0414 613 520
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