On the 7 June 2016, the Australian Energy Regulator (AER) 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.
AEMC consultation paper and AER submission
The AEMC released a consultation paper on the rule change request on 18 August 2016. The AEMC’s consultation paper set out transitional provisions that the AEMC proposed to adopt in addition to our proposed rule change. On 16 September 2016 we provided a submission in response to the AEMC consultation paper commenting on the AEMC’s proposed transitional provisions. We submitted that the current regulatory framework is sufficiently flexible to address the impacts caused by our proposed rule change and that the proposed transitional arrangements may make the framework more complex and rigid.
AER submission to AEMC re rate of return guideline rule change - 15 September 2016
AER rule change proposal to AEMC
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.
More information
More information on AER's rule change proposal can be found on the AEMC website.