Putting consumers first: Australian Energy Regulator Annual Report

The Australian Energy Regulator today published its Annual Report for 2016-17 detailing its work for the year and performance against targets laid out in the Statement of intent to the Council of Australian Governments Energy Council and the Australian Government.

“The energy market is in transition, and our work takes place in the context of significant technological, behavioural and systemic change. The market faces significant challenges, with energy affordability being a central concern for consumers.

“Compounding this pressure, changing generation technologies and market dynamics have intensified concerns about the future of our energy supply. In electricity coal-fired generators are being retired, resulting in a significant loss of capacity from the market and a tighter supply-demand balance. And in the east coast gas market, demand from LNG exports is combining with limited supplier competition  to sharply raise domestic prices,” said Australian Energy Regulator Chair Paula Conboy.

The Annual Report outlines key initiatives undertaken to address these and other issues, in the Australian energy market.

The establishment of the Energy Security Board (ESB) – the result of a recommendation from Chief Scientist Alan Finkel’s review of the National Electricity Market – is one such response to the changing energy landscape.

AER Chair Paula Conboy sits on the ESB, along with the heads of the Australian Energy Market Operator and the Australian Energy Market Commission while Dr Kerry Schott and Clare Savage are Independent Chair and Deputy Chair respectively of the board.

“Separately, we are undertaking a new monitoring and reporting role on the effectiveness of competition in the National Electricity Market (NEM). We will provide initial reports, specifically on the NSW electricity market and on the impact of the Hazlewood power station closure. Further investigations into whether the NEM is effectively competitive will follow and we will publish our first report next year,” said Ms Conboy.

The AER has also undertaken major work to assist consumers dealing with rising retail energy prices and is also assisting with two inquiries undertaken by the Australian Competition and Consumer Commission (ACCC) into the competitiveness of energy markets as well as undertaking a new role in assisting third parties to negotiate access to unregulated gas pipelines.

“Our work in retail energy markets aims to equip consumers with information and confidence to engage in a challenging market environment and we also offer protection – especially to vulnerable people – from unfair behaviour. During the year we published more than 15,000 offers on our Energy Made Easy price comparator website and handled over 600,000 site visits.

“Our enforcement action resulted in 21 infringement notices being paid by energy businesses for contravening provisions in the regulations governing their work,” said Ms Conboy.

The AER completed or progressed 14 network revenue or pipeline access regulatory reviews during the year, including preparations for our first determination in the Northern Territory.

The year saw the Australian Government legislate to remove the Limited Merits Review process, meaning that businesses can no longer appeal AER determinations to the Australian Competition Tribunal.

While the AER is remaking those parts of NSW and ACT electricity distribution decisions the businesses successfully appealed under LMR, the Tribunal also upheld the decisions made by the AER regarding five Victorian electricity revenue determinations.

“At a time when energy affordability is a serious concern for consumers, it is more important than ever that consumers have the confidence that we are carefully examining all aspects of network costs,” said Ms Conboy.

Issued date: 
7 December 2017
AER reference: 
NR 41/17