AEMC Draft rule on new obligations on electricity network businesses for replacement assets

On 11 April 2017, the Australian Energy Market Commission (AEMC) published its draft rule determination in response to a rule change request submitted by the Australian Energy Regulator (AER) to extend the regulatory investment test (RIT) to replacement capital expenditure (repex) and increase transparency of investment planning information.

How the tables have turned…

At the beginning of 2016, headline figures suggested our economy was growing at a steady pace. Yet the income and wellbeing of Australians was far from rosy – we were in an income recession as deep as the one we experienced in the early 1990s recession. Almost twelve months on, the latest figures show that the Australian economy contracted in the September quarter whilst at the same time national income grew. This article examines what happened to income in the most recent quarter and why output growth does not necessarily add up to better wellbeing for Australians.

Central Elements of Effective Policy Making

This policy update provides a brief and general review of the most recent policies, strategies and initiatives announced in the lead up to the Federal election.

A central role for Government is to set the policy framework for its constituents. This is not an easy task, especially if we take into account the constrained timelines typically associated with these processes and the need to balance potentially divergent views from different stakeholders. Recent events in South Australia where the whole state experienced a blackout are a timely reminder of the complexity of this task. It also reinforces the need for policy makers to thoroughly interrogate the reasons for and consequences of its policy response given the potential consequences for consumers and economic performance.

The new Victorian Water Regulatory Framework (PREMO)

Victoria will be implementing a new water pricing framework for the next regulatory price review in 2018. The framework will apply to 16 of the State’s urban water businesses and Southern Rural Water. This briefing note summarises the impetus for the new framework, its key features and draws attention to elements that have been modified, refined or firmed up since the ESC’s May position paper.

COAG Energy Council discusses transformation of the energy sector

The Council of Australian Governments (COAG) Energy Council met on 19 August 2016 with the discussions focusing on the transformation of the gas and electricity markets and the associated challenges, including the recent energy supply problems in South Australia.

The meeting identified a number of significant policy issues facing the energy sector, with the Senior Committee of Officials (SCO) tasked with a large work program to December 2016.

A summary of the key outcomes and our preliminary thoughts is provided (read more)

Recent price reviews in the water sector

In June 2016 a number of regulatory pricing reviews in the water sector were finalised. This includes:
• Hunter Water, Sydney Water and Water NSW (IPART)
• Melbourne Water and Goulburn Murray Water (ESC)
• SA Water (ESCOSA).
Just prior to these determinations the ESC released a Position Paper on A New Model for Pricing Water Services in Victoria’s Water Sector, which flags a more fundamental change in approach.