The Australian Energy Regulator today issued its Electricity distribution regulatory guidelines: Statement of Approach.
This statement outlines the scope and timeframes for its consultation processes on the development of guidelines for the regulation of electricity distribution services. The work is part of the AER's preparation for assuming responsibility for electricity distribution regulation, which is expected to occur by 1 January 2008.
"The guidelines, once finalised, are intended to provide certainty to stakeholders", AER Chairman, Mr Steve Edwell, said. "They will signal the AER's approach to regulating the prices of monopoly services at the distribution level".
Given that the legislative framework for energy regulation is still being developed, the AER will consult on its guidelines for electricity distribution through a staged process over the latter part of 2006 and 2007 in the lead-up to the transfer of responsibilities by early 2008.
"The timing and contents of this process are largely based on the need to deliver certainty about the regulatory framework to distribution businesses, but also ensure that the AER's work remains within the legislative and rule making framework", Mr Edwell said.
The AER believes that there is sufficient consensus among stakeholders on the fundamental elements of the likely regulatory regime to begin work on the guidelines. The AER has been particularly guided by the AEMC's recent draft rule determination for electricity transmission, and the MCE's latest announcements regarding the 2006 and 2007 legislative packages for energy network regulation.
The AER is mindful of the concerns expressed by stakeholders regarding the possible pre-empting of policy outcomes, and will ensure that its guidelines comply with the relevant legislation as it is developed and implemented.