NERA Economist to Review the Revenue and Network Pricing in Australian Energy Market
7 December 2005
The Ministerial Council on Energy (MCE) has appointed NERA Director Greg Houston to an expert panel that will develop a common set of arrangements for economic regulation of electricity and gas transmission and distribution networks in Australia. The panel, which was established as a response to the Productivity Commission Review of the Gas Access Regime, will provide a final report to the MCE giving high level policy guidance and recommendations on pricing principles and regulatory methodologies suitable for inclusion in a national energy access regime.
In undertaking this project, the principal objective for the panel is to develop appropriate criteria for determining the level of prescription in the law and subsidiary rules for a common energy access pricing model. The panel's review will address the form of price control and guidance, CPI-X building block revenue control, potential alternatives to the building block methodology, incentive arrangements for reliability, the scope of the regulator's discretion, the scope of regulation, regulatory procedures, and the appropriate scope of the regulator's information gathering powers for economic regulation.
A key objective of the MCE's energy market reform program is to ensure that, where the decision has been made to impose price regulation, costs are kept to a minimum while maintaining the effectiveness of regulation in achieving the objectives of the National Electricity Law and National Gas Law. In determining a common approach to revenue and network pricing, the panel must consider what high level direction should be given to the regulator and whether this should be in the law or in the rules.
Please direct inquiries to:
Greg Houston
Director
+61 2 8864 6501
