The Australian Energy Market Commission (AEMC) has issued a directions paper on rule change requests from the Australian Energy Regulator (AER) and a group of large energy users (EURCC).

 

The rule change requests seek to change the way revenues are set for electricity and gas network businesses. The directions paper sets out the AEMC’s initial positions on the issues, as well as its next steps.

 

The Commission agrees that some areas of the National Electricity Rules could benefit from enhancement, principally related to how the regulated asset base is determined, how the rate of return is set, and the process for making determinations.

 

In some of these areas, while the rule change requests propose solutions, the Commission will explore other options for making these enhancements.

 

In the next period, the AEMC will be working to understand the issues better and to develop the best solutions to address them. The AEMC will be seeking further input of stakeholders.


The AER’s gas rule change request covers only how the rate of return is set. Unlike electricity, this also applies in Western Australia. The Commission will consider whether any enhancements could be made to these provisions for gas.

 

Consultation on the rule change requests commenced in October/November 2011 when the AEMC published two consultation papers. In total, 65 submissions were received on these consultation papers.

 

The Commission is now seeking submissions on its directions paper. More information is here.

 

Submissions close on 16 April 2012. The Commission will consider these submissions and undertake further analysis, including by way of external consultants, before publishing a draft determination in late July 2012. This may include a draft rule.

 

A workshop-style public forum will be held on 2 April 2012