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.

Client Brief – QCA’s Final Decision on Queensland Rail’s Draft Access Undertaking

On 10 June 2016, the QCA released its final decision on Queensland Rail’s (QR’s) draft access undertaking proposal (DAU), submitted in May 1015. This has been a lengthy process, having initially kicked off when QR submitted its initial DAU in March 2012 for an intended commencement date of June 2013. The QCA now requires that QR submit a new DAU that complies with this final decision by 16 August 2016.

Economic Modelling – how useful is it really?

There has been a lot of noise in the media of late about the lack of credibility of economic modelling. This debate was originally sparked by the release of ‘independent’ BIS Shrapnel modelling of the costs of negative gearing changes (which was roundly criticised by economists), but has continued with commentators seemingly lining up to take a swing at any economic modelling they don’t like.

Where now with benchmarking?

In its recent decision in the Australian Competition Tribunal (‘the Tribunal’) has just delivered a serious blow to the Australian Energy Regulator’s (‘AER’) use of benchmarking to assess allowable revenues for electricity distributors. Their decision, was in response to an application for merits review of the AER 2015 decisions on the allowable revenues of NSW and ACT distributors.

In broad terms, they rejected the benchmarking approach that the AER had adopted to assess efficient operating costs for the NSW and ACT distributors. This article examines the implications of the Tribunal’s decision.

Client Brief – Port of Newcastle: ACT upholds Glencore’s appeal on decision to not declare channel services

On 31 May 2016, the Australian Competition Tribunal (the Tribunal) released its Decision to uphold Glencore’s appeal against the Commonwealth Treasurer’s January 2016 decision to not declare the channel services at the Port of Newcastle under the National Access Regime (NAR). The Tribunal has determined that all the declaration criteria have been satisfied.