The Australian Energy Regulator today issued its Gas and Electricity Distribution Regulatory Guidelines- Scoping Paper. The purpose of this Scoping Paper is to set out the AER's proposed process and scope for the development of regulatory guidelines for electricity and gas distribution, for which the AER will assume responsibility from 1 January 2007.
The guidelines are intended to provide certainty to stakeholders by signalling how the AER will consider and implement various aspects of its approach to regulating the prices of monopoly services at the distribution level. The AER intends to publish its guidelines by mid 2007, thereby providing sufficient notice to businesses of its approach prior to the first of its pricing reviews, which are expected to begin in mid 2008.
"The AER is committed to a process of consultation on the regulation of gas and electricity distribution networks", AER Chairman, Mr Steve Edwell, said. "To this end, the scoping paper proposes the formation of formal consultation structures for industry, users and state regulators, as well as the general public.
"We are issuing this scoping paper at this stage to ensure that all necessary preparations are undertaken for the transfer of distribution regulatory functions".
The AER notes that the framework for distribution regulation is currently under consideration by the Ministerial Council on Energy Expert Panel, and will accommodate any developments arising from this review. The AER believes, however, that there is sufficient consensus among stakeholders on the fundamental elements of the likely regulatory regime to begin consultation on the details of their implementation.
The Scoping Paper represents the first public consultation document on the AER's responsibilities for distribution network pricing, with others to be issued during the next 12 to 18 months. The paper proposes a three stage consultation process covering topics such as information requirements, financial modelling, expenditure incentives and service standard requirements.
The AER is seeking comments from interested parties on the scope of the AER's considerations, the AER's proposed process and specific issues identified in the paper. Submissions can be sent electronically to aerinquiry
aer [dot] gov [dot] au (aerinquiry[at]aer[dot]gov[dot]au). Alternatively, written submissions can be sent to:
General Manager
Australian Energy Regulator
GPO Box 560J
Melbourne VIC 3001
Submissions should be received by 5 May 2006.