Competition Policy Review touches on the Gas and Electricity sector

by Energy Action | Apr 09, 2015
The Harper Review of Competition Policy released in March 2015, whilst not primarily focusing on electricity and gas, did note that significant reform progress in the sector had been made but that progress had slowed.

The Harper Review of Competition Policy released in March 2015, whilst not primarily focusing on electricity and gas, did note that significant reform progress in the sector had been made but that progress had slowed.

The Competition Policy Review – Final Report (the “Review”) says that competition reform of the electricity and gas sectors is well progressed compared to other sectors, but remains unfinished.

Previously agreed reforms committed to in December 2012 are still not complete including the National Energy Retail Law implementation (designed to harmonise regulations for the sale and supply of energy) and retail price deregulation. In Victoria and Queensland, the National Energy Retail Law has yet to be applied without major derogations, undermining the benefits of a national law (although the Review notes that the Queensland Parliament recently legislated to deregulate electricity prices in South East Queensland from 1 July 2015).

The Review strongly supports moves towards including the Northern Territory and Western Australia into the National Electricity Market, – noting that no physical connection is required to do so – as competition benefits may be realised from greater integration of the market.

The Review noted that further benefits may be realised in the electricity and gas sectors from transferring more functions, such as reliability standards and licensing arrangements, to the national regime.  It proposes the creation of an Access and Pricing Regulator (APR) to oversee all industries currently regulated for the Australian Government by the Australian Competition and Consumer Commission (ACCC) including the functions undertaken by the Australian Energy Regulator (AER) under the National Electricity Law, the National Gas Law and the National Energy Retail Law.

Recommendations of the Review are that State and territory governments should finalise the energy reform agenda, including through:

  • application of the National Energy Retail Law with minimal derogation by all National Electricity Market jurisdictions;
  • deregulation of both electricity and gas retail prices; and
  • the transfer of responsibility for reliability standards to a national framework administered by the proposed Access and Pricing Regulator and the Australian Energy Market Commission (AEMC).

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