Transcript The Australian Energy Regulation

The Australian Energy
Regulator
QLD Electricity distribution
determination 2015–2020
Meeting with consumers
7 November 2013
TOPICS
 Welcome
 Purpose
of the meeting
 Overview of the AER
 QLD reset process
 QLD framework and approach (F&A)
 Going forward
2
PURPOSE OF CONSUMER MEETINGS
We can directly engage
with consumers and
other interested
parties
You can ask questions
and provide your
views about the energy
regulation process
3
OVERVIEW OF THE AER
Wholesale gas
& electricity
markets
Transmission
Distribution
Retail
networks &
pipelines
Networks for
gas/electricity
& other
distribution
We monitor
wholesale
markets and
enforce rules
We regulate
revenues of
transmission
businesses
We regulate
revenues of
distribution
businesses
We will regulate
non-price retail
activities
4
NATIONAL ELECTRICITY OBJECTIVE
“…to promote efficient investment in, and
use of, electricity services for the long
term interests of consumers of electricity
with respect to:
 price, quality, reliability and security of
supply and
 the safety, reliability and security of the
national electricity system.”
- National Electricity Law
5
OUR GOALS
Promoting efficient
investment and
operation of energy
networks
Build consumer
confidence in energy
markets
Strengthen
Promote competitive
stakeholder
and efficient energy
engagement in
energy markets and
markets
regulatory processes
6
WHY ARE CONSUMERS IMPORTANT?
AER
Businesses
Consumers
7
QLD RESET PROCESS
 We
are responsible for regulating
the revenues Energex and Ergon
Energy may earn.
 We conduct revenue resets every
five years
 We are commencing the QLD reset
process for 2015–2020
8
WHAT’S DIFFERENT THIS TIME
2012 Rule
changes
• Improve the AER’s ability to determine
network prices so consumers don’t pay
more than necessary for the services they
require
Better
Regulation
Program
• Updating and improving the AER’s
processes under the new Rules
• Seven new guidelines e.g. consumer
engagement, expenditure incentives
End of
transitional
arrangements
• Transitional arrangements applied to the
classification of services, control
mechanism, incentive schemes.
9
QUEENSLAND MARKET ISSUES
 Retail
price deregulation?
◦ Removal of energy retail price controls
 Lower
cost of capital
◦ The cost of funds used for financing a
business
 Reduced
reliability standards?
 Smart metering rollout?
 QLD government 30-year plan
10
TIMELINES
December 2013
30 April 2014
31 October 2014
January/February
2015
April 2015
June 2015
1 July 2015
31 October 2015
• Preliminary positions F&A
• F&A published
• Businesses submit regulatory proposals
• Submissions on regulatory proposals close
• AER publishes preliminary determination
• Revised regulatory proposals submitted
• Submissions on revised regulatory proposals close
• AER publishes final determination
11
QLD F&A | WHAT IS IT?
 The
F&A considers:
◦ Services we will regulate
(classification)
◦ How we will determine prices for
regulated services (control
mechanism)
◦ Application of incentive schemes
12
QLD F&A | WHY IS IT IMPORTANT?
 Provides
an opportunity for you to
have a say in:
◦ which services we should regulate
◦ how much control we have over
determining the prices for
distribution services
◦ incentive schemes that will apply
to the businesses
13
QLD F&A | GOING FORWARD
Meeting 1 (today)
• Capture your key issues to consider in our discussion
paper
Meeting 2 (week beginning 20 January 2014)
• Discuss issues raised in our preliminary positions paper,
prior to the deadline for written submissions
Meeting 3 (week beginning 17 March 2014)
• Discuss how we are considering submissions received
and the likely direction of the final F&A
14
FURTHER CONSULTATION
 What
do you want to know?
 How can we assist?
 Contact:
Moston Neck
Robyn Lowien
[email protected]
07 3835 4669
[email protected]
07 3835 4659
15
QUESTIONS?
16
REGULATORY FRAMEWORK
Form of Regulation
No
Regulation
Direct
Control
Process to
determine
whether and
how to regulate
services
Negotiate/
Arbitrate
Control
Setting
Methodology
Alternative
Control
Standard
Control
Form of Price
Control
Form of Price
Control
Not prescribed
Revenue
Cap
Price
Cap
Hybrid
17