The Australian Energy Market Commission (AEMC) today announced a new annual monitoring report to assess the state of economic regulation for electricity networks in the face of energy market transformation.

Electricity networks are moving away from being one-way delivery systems and becoming managers of multi-directional flows of energy. Decentralised energy production is now a feature of the National Electricity Market. Consumers are increasingly generating their own electricity especially through rooftop solar systems and more businesses want to generate their own power from sources like gas, solar, wind or biomass. 

The economic regulatory framework for electricity networks must be able to provide sufficient flexibility for network businesses to adapt to these changes.  The COAG Energy Council has asked the AEMC to undertake this annual monitoring - recognising the importance of providing early warning of market developments that may need to be addressed by changes to the National Electricity Law/Rules.

The AEMC annual monitoring will therefore report on the regulatory framework’s ability to support continued efficient investment, operation and efficient use of electricity services in the event of increased decentralised supply options.

This new annual report follows previous policy advice provided by officials to the COAG Energy Council that sets out possible future scenarios that may impact on the economic regulatory framework in the event of an increase in decentralised energy generation.

The review is timely, following the introduction of major reforms including the introduction of cost-reflection distribution network pricing in November 2014; new rules to open up competition in metering to give consumers more opportunities to access a wider range of new energy products and services; and new rules introduced in November 2012 on the economic regulation of network service providers which improved the strength and capacity of the regulator’s toolkit to determine network price increases so consumers don’t pay more than necessary for reliable energy.  

The AEMC will publish an Approach Paper as well as its preliminary views for stakeholder comment by 1 December 2016.  The annual Monitoring Report will be published by 1 July 2017.

For more information contact: Ed Chan (02) 8296 7839 or Rachel Armstrong (02) 8296 7821


Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817