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Welcome to the first edition of the AER newsletter, Energy Dispatch

Subscribe to the AER's newsletter and every two months we will deliver Energy Dispatch directly to your email inbox. We know you are busy, and hopefully you can benefit from this one-stop-shop that makes it easier to be across our work and be reminded how and when you can make a contribution. This newsletter is designed to be a quick read that will shine a light on core areas of our work, let you catch up on all AER relevant news as well as signal important, upcoming dates. We may also take the opportunity to connect you with interesting research or insights from thought-leaders.

We hope you find this resource useful and encourage you to subscribe and share Energy Dispatch with your colleagues using the social links below. If you would like to hear more about a specific topic, or want to tell us about an article you think is suitable to share with the Energy Dispatch community, please email us at communicationsteam@aer.gov.au.

Five-minute dispatch


It was a busy summer and autumn, and as the leaves fall and we enter the winter months our staff certainly haven’t slowed down. With Dr Alan Finkel providing his report on the Independent Review into the Future Security of the National Electricity Market to the Council of Australian Governments (COAG) tomorrow, it will continue to be a busy time for the sector.  Here is a wrap of some of our recent key work.

Retail markets
We hosted an energy retailer forum to discuss Developments in Consumer Engagement and Retailer Innovation. The event was well attended, and retailers had the opportunity to listen to and learn from each other.

The AER has issued several fines for alleged breaches. Simply Energy were fined $60,000 for alleged failure to obtain consent before switching customers and Origin Energy were fined $20,000 for alleged failure to submit timely, accurate data on their market performance. Following Urth Energy’s entry into administration and their suspension from the NEM, we supported the transition of former Urth Energy customers to new retailers.
AER staff recently had the opportunity to hear from South Australian consumers at the Adelaide Home Expo. SA customers were pleased to learn more about our independent price comparison website Energy Made Easy and were keen to explore their energy options and understand more about consumer rights.

Wholesale markets
At the end of May, the AER published its tenth annual State of the energy market report. highlighting the changing dynamics across the entire energy sector. Our report draws together data and analysis to illustrate key trends and drivers of change in the energy industry, as well as current challenges and how stakeholders are responding.

In December 2016 new legislation took effect which provides the AER with additional responsibility to monitor and report on wholesale ‘market performance’. It requires the AER to identify and analyse whether the market is effectively competitive and any features that impact negatively on the market functioning efficiently.

There are a number of international energy market regulators that undertake similar roles. For instance, New Zealand’s Electricity Authority reports on the performance of the New Zealand electricity markets in its Electricity Market Performance reports annually. We will consult on our approach later this year.

Networks
The Full Federal Court made its decision on our judicial review challenge of the Australian Competition Tribunal's decision on NSW and ACT electricity and gas network charges. Our decisions set lower revenues than proposed by the network businesses, partly because we concluded that costs above efficient levels should be funded by the network owners , not customers. Whilst the Federal Court upheld our appeal in relation to the cost of corporate income tax, it upheld the Australian Competition Tribunal's findings in relation to the networks operating expenses and cost of debt.  We are working our way through the detail of the judgment and considering our next steps including any implications for these and other network revenue determinations. The COAG Energy Council has agreed that the limited merits review regime (the mechanism through which network businesses appeal our decisions to the Tribunal) is failing to meet its policy intent and is leading to higher prices for consumers, calling for reforms in this area. We are closely engaging in this work to ensure it operates in the long term interests of consumers and that there is a robust accountability framework in place for our decisions.

We recently published our final determinations on network revenues for TasNetworks, Powerlink  and AusNet Services and were encouraged with how these proposals and final decisions will help ease pressure on climbing electricity bills.

AER submissions
It was good to see a strong, sector-wide response to Dr Alan Finkel’s review into the Future Security of the National Electricity Market. We look forward to reading the final report and working with other market institutions and COAG Energy Council on its recommendations. We have also made submissions to several AEMC proposed rule changes and provided a submission to the Gas Market Reform Group implementation options paper.

Plugged in

AER CEO, Michelle Groves, was recently invited to the John F Kennedy School of Government at Harvard University to collaborate with other energy leaders in a workshop on the analysis and management of energy and environment policy. The  workshop, conducted through the Harvard Environmental Economic Program, examined the role of markets in delivering affordable, secure and reliable energy while moving to a lower carbon emissions future. Sessions on energy economics and policy, energy systems transformation and the geopolitics of energy security reinforced the challenges being faced globally as the energy sector transforms.

Watt's in the pipeline?

At the AER -
  • 29 June  - Draft decision on the access arrangements for Victoria's natural gas networks for the 2018-2022 period. Through this process, the AER will determine the revenues that these networks can collect from gas customers in Victoria and Albury through network charges.
  • 30 June  - Submissions to the ACCC's Electricity supply and prices inquiry issues paper are due on 30 June 2017. It is seeking feedback on pricing, competition and customer issues.
  • 27-28 July - The AER/ACCC's annual Regulatory Conference will be held in Brisbane.
For more information about other opportunities to contribute to energy sector policy reviews, regulatory processes and inquiries over the coming weeks and months, check out the Advocates' calendar on Energy Consumers Australia's website.

Keep your eyes peeled in early August for the next edition of Energy Dispatch
(don't forget to subscribe!). We will have more interesting news to share, and we will introduce you to our recently launched initiative to support consumers better understand their energy bills, possible hidden fees, available contracts and their consumer rights.

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Australian Energy Regulator