The Australian Energy Regulator (AER) has proposed changes to the National Electricity Rules and the National Gas Rules (the Rules) relating to the review process of the rate of return guidelines (the Guideline).
The Rules require us to review the Guideline every three years. We have requested that the timeframe for the initial review of the Guideline be extended from three to five years. We first published the rate of return guideline on 17 December 2013 and must complete an initial review of the current Guideline by 17 December 2016. We have requested that the date for completing the review be extended to 17 December 2018.
The AER’s 2015 pricing determinations took into account the Guideline and the legal processes relating to those determinations have not yet been completed. By delaying the Guideline review, the AER and other stakeholders can consider the outcomes from these legal processes as part of the Guideline review.
We submitted our proposal to the Australian Energy Market Commission (AEMC) for consideration as a non–controversial rule change request. We consider that the delay proposed in the rule change is unlikely to have a significant effect on the energy market as the current Guideline will remain in force. Industry and consumer groups have indicated their support for our proposed rule change.
The AEMC will then follow the mandated consultation process set out in the national electricity and gas laws.