ENA represents the electricity and gas distribution businesses in Australia.

Addressing the Australian National University’s world class Australian Centre of Regulatory Economics (ACORE), Powis hailed the release of the recent NSW Electricity Network Price Determination but warned more had to be done. He also lauded the imminent release of the Productivity Commission’s Review on the Gas Access Regime and felt ENA could contribute to the plans of developing a national framework on retail and distribution regulations.

“We support the decisions taken by energy ministers to establish an Australian Energy Regulator but there is a lot more to do. The ENA is working closely with governments to ensure that the new national framework does not nationalise and entrench poor regulatory practice”, said Powis.

“Regulatory reform does not just involve streamlining and reducing the number of regulators, it is also about improving the quality of that regulation. Our experience to date has been of intrusive, unfocussed, inconsistent regulation,” noted the ENA Chair.

Powis’ address to ACORE comes days before the release of the Productivity Commission Review on the Gas Access Regime and Powis has hailed the report as a landmark document on the matter of distribution regulation. The Review is due to be handed to the Commonwealth Treasurer on 12 June.

“The review of the gas access regime is a once-in-a-decade opportunity to have the regime re-examined against its original aims, the experience gained over these years, and against a more mature understanding about energy asset regulation in a liberalised energy market,” said Powis.

“The review has importance beyond the gas sector. It is part of a cascade of issues, reviews, decisions and reforms which will all contribute to the development of a new regulatory framework for distribution regulation,” added Powis.

On the matter of the Ministerial Council on Energy (MCE) plans to develop a national framework for retail and distribution laws under the aegis of the new Australian Energy Regulator, Powis left no doubt as to where ENA stands on the subject.

“The Energy Networks Association is not waiting to have these reforms delivered to us. We are also developing a preferred regulatory model for all energy infrastructure assets which we will be putting to the MCE process.”

“Regulation needs to shift towards an approach which rebalances access pricing towards ensuring adequate medium term investment. Inadequate returns put at risk future investment in a reliable, safe and secure energy supply. I consider these things to be non-negotiable,” added Powis.

What Powis and ENA envisage is a regime with clear cut objectives and pricing principles which protect property rights and business interests of the provider. The regime must also act as a bridge between “the outcomes of economic regulation and the evolving technical and safety regulatory obligations” and have well-defined administrative rules and processes that allow for latitude between the networks and the regulatory authority.

Furthermore, Powis believes there is a need for “the availability of ‘lighter handed’ pricing models for a service provider to select on a voluntary basis” and a strong and consistent merit and judicial appeal provisions to provide for accountability in regulatory decisions”.