Consumers are at the forefront of changes in the energy market, Australian Energy Regulator Chair Paula Conboy said today at a CEDA event in Melbourne.
In her inaugural speech as AER Chair, Ms Conboy discussed the future of energy markets, the role of regulation in a changing and uncertain environment and the hallmarks of good regulatory practice.
“The evolution is being driven by consumers and fuelled by new technologies,” Ms Conboy said.
“Market participants, regulators and policy makers worldwide are grappling with the reality that energy markets and the role of networks in those markets are rapidly changing.”
“In this era of change, effective regulation remains an important platform in delivering the services that consumers want and need,” Ms Conboy said.
“Regulation of network businesses is aimed at promoting efficiency as this is what we might expect in a competitive market.”
Ms Conboy also explained some of the tools used by regulators to promote efficiency, including the AER’s new emphasis on benchmarking of network businesses.
“Benchmarking is an approach which is being used increasingly by regulators to assess efficiency and inform regulatory decisions.”
“It allows us to compare different network businesses and gain valuable information on what best practice is,” Ms Conboy said.
Ms Conboy said changes in market conditions and the uncertainty ahead do not alter the fundamental attributes of effective regulatory practice.
“The regulator’s processes must be transparent, open and predictable.”
“This is essential for building trust and is crucial to the overall effectiveness of regulation,” Ms Conboy said.
In discussing the hallmarks of good regulation, Ms Conboy said effective engagement will continue to be a priority in 2015.
“Stakeholder engagement enhances our decisions and is essential for maintaining public confidence in the regime.”
“More broadly, engagement can assist the markets to adapt more successfully to meet emerging challenges,” Ms Conboy said.