List
of recommendations
Recommendation 1
4.75 The
committee recommends that the Council of Australian Governments (COAG) Energy
Council commission an independent expert review of options for excluding future
imprudent capital expenditure and surplus network assets from a network service
provider's regulatory asset base (RAB). This review should consider the
provisions of the Western Australian Electricity Networks Access Code and its
decision-making criteria.
4.76 The
review should have the freedom to suggest any necessary changes to
intergovernmental agreements, the National Electricity Law or the National
Electricity Rules.
Recommendation 2
4.77 The
committee recommends that, following the outcomes of the current round of
network pricing decisions, the COAG Energy Council commission an independent
expert review of the efficacy of recent changes to the National Electricity
Rules and the benchmarking process in promoting the long-term interests of
consumers. This assessment should focus on the appropriateness of current
methodologies for calculating the weighted average cost of capital (WACC) and
the manner in which the estimated cost of corporate income tax is calculated.
Recommendation 3
4.78 The
committee recommends that the National Electricity Rules be amended to provide
that the Australian Energy Regulator may set a regulatory control period that
is less than five regulatory years.
Recommendation 4
5.44 The
committee recommends that state governments seeking to privatise their
electricity network assets examine whether those assets are overvalued and if
the regulatory asset base should be written down prior to privatisation.
Recommendation 5
6.67 The
committee recommends that the National Electricity Rules be amended to cap the
costs associated with the preparation of a regulatory proposal that a network
service provider may recover from its customers.
Recommendation 6
6.68 The
committee recommends that the COAG Energy Council request the Australian Energy
Market Commission to review the consumer engagement activities of network
service providers. As part of this review, proposals for enhancing the
effectiveness of consumer engagement efforts should be invited from consumer
advocacy groups. Particular focus should be given to the effectiveness of consumer
engagement in ensuring that network planning outcomes respond to the long-term
interests of consumers.
Recommendation 7
The committee recommends that the Australian Energy Market
Commission and the Australian Energy Regulator jointly develop and publish
consolidated guidance on the regulatory determination process to better inform
members of the public, consumer groups and other energy user stakeholders.
Recommendation 8
7.55 The
committee recommends that the Australian Energy Market Commission is provided
with the ability to initiate a rule change process without being required to
receive a rule change request from an external party.
Recommendation 9
7.56 The
committee recommends that the Australian Government pursue, through the COAG
process, amendments to the National Electricity Law to require that the
Australian Energy Market Commission must commence public consultation on a rule
change request within a prescribed period of time if the rule change request
has been lodged by the COAG Energy Council.
Recommendation 10
7.57 The
committee recommends that the Australian Government pursue, through the COAG
process, an agreement that any Commonwealth, state and territory energy policy
schemes and measures that may have implications for the National Electricity
Market or network efficiency must be referred to the Australian Energy Market
Commission for formal advice regarding the likely effects on the long-term
interests of consumers.
Recommendation 11
7.59 In
light of the recommendation made by the Competition Policy Review (Harper
Review) regarding a single national access and pricing regulator, the committee
recommends that the Australian, state and territory governments consider:
- the
potential efficiencies and other advantages of a single national access and
pricing regulator; and
- whether
such a proposal would be in the long-term interests of consumers of
electricity, given the need for a regulator with sufficient expertise to
challenge, when required, well-resourced electricity network service providers.
Recommendation 12
7.63 The
committee recommends that the Australian Government commission an external
review of the capability of the Australian Energy Regulator (AER). The review
should consider:
- the
adequacy of the AER's financial resources;
- the
effects of the 2014–15 budget cuts; and
- whether
the AER has the skills and powers needed to perform its functions effectively.
Recommendation 13
7.64 The
committee recommends that the Australian Energy Regulator should facilitate
public consultation on the statement of intent it develops in response to the
COAG Energy Council's statement of expectations.
Recommendation 14
7.65 The
committee recommends that the board of the Australian Energy Regulator should
be reformed so that:
- the
number of board members is increased from three to five;
- the
requirement for a Commonwealth member and two state and territory members is
abolished with future appointments based solely on merit;
- all
appointments to the board are to made by the Commonwealth;
- at
least one board member is required to have knowledge of, or experience in,
consumer affairs in energy matters; and
- at
least one board member has expertise in decentralized energy systems and demand
management.
Recommendation 15
8.73 The
committee recommends that the Australian, state and territory governments
increase and prioritise efforts to ensure that networks are prepared to
efficiently respond to changes in the energy market, in light of:
- the
increased uptake of small-scale solar generation;
- emerging
energy storage technologies;
- the
anticipation of customers going 'off-grid';
- the
anticipation of further disruptive technologies; and
- the
certainty of value destruction as a result of current business models.
Recommendation 16
8.74 The committee recommends that, as
cost-reflective network pricing is introduced, the COAG Energy Council ensure
appropriate steps are taken so network companies' tariff and non-tariff based
demand management programs are strengthened to assist consumers to transition to
cost-reflective tariffs.
Recommendation 17
8.75 The
committee recommends that the Australian Energy Regulator expedite its
implementation of the current demand management incentive scheme rule change in
all open network revenue determinations.
Recommendation 18
8.76 The
committee recommends that the COAG Energy Council remove any barriers to
networks implementing cost-reflective network prices to ensure efficient use of
demand management and embedded generation is rewarded.
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