Electricity Network Regulatory Frameworks

Download the draft report

• Volume 1 - Electricity Network Regulatory Frameworks - Draft report (PDF - 3844 Kb)
• Volume 1 - Electricity Network Regulatory Frameworks - Draft report by chapters (Zip/Word - 4737 Kb)

• Volume 2 - Electricity Network Regulatory Frameworks - Draft report (PDF - 5987 Kb)
• Volume 2 - Electricity Network Regulatory Frameworks - Draft report by chapters (Zip/Word - 5431 Kb)

Download the report by chapters

• Preliminaries (PDF - 377 Kb)
  • Cover, Copyright, Opportunity for further comment, Terms of Reference, Acknowledgement of referee, Disclosure of interest, Contents, Abbreviations and explanations

Volume 1

• Overview - including key points (PDF - 880 Kb)
• Draft recommendations and findings (PDF - 304 Kb)
• Chapter 1 About the inquiry (PDF - 868 Kb)
  • 1.1 What are the perceived problems?
  • 1.2 Overview of the regulatory framework and its institutions
  • 1.3 The Commission's approach to its terms of reference
  • 1.4 A guide to the report
• Chapter 2 The structure and performance of the National Electricity Market (PDF - 913 Kb)
  • 2.1 The structure of the National Electricity Market
  • 2.2 The scale of the network and its costs
  • 2.3 The nature of demand
  • 2.4 Prices have been rising
  • 2.5 The proximate reasons for higher network charges
  • 2.6 Reliability
  • 2.7 What is at stake?
• Chapter 3 The rationale for regulation of electricity networks (PDF - 305 Kb)
  • 3.1 The characteristics of electricity networks
  • 3.2 Evidence about the costs of market power
  • 3.3 The case for regulating monopolies
  • 3.4 Are deadweight losses passé? New theories of why monopolies should be regulated
  • 3.5 The alternative policy implications of different theories of monopoly regulation
  • 3.6 In summary
• Chapter 4 A framework for benchmarking (PDF - 807 Kb)
  • 4.1 Benchmarking managerial efficiency and performance
  • 4.2 Benchmarking techniques
  • 4.3 What should be benchmarked?
  • 4.4 The use of benchmarking for Australian electricity networks
  • 4.5 Criteria for judging benchmarking
  • 4.6 Validity — does the measure test what it claims to?
  • 4.7 Other scientific criteria for judging benchmarking
  • 4.8 Testing the credibility of results
  • 4.9 No perfect measure is possible
• Chapter 5 Incentive regulation and benchmarking (PDF - 590 Kb)
  • 5.1 Incentive regulation
  • 5.2 Incentive regulation and the electricity sector
  • 5.3 Effectiveness of incentives applying to capex
  • 5.4 The AER's ability to determine expenditure forecasts
• Chapter 6 Empirical evidence of network efficiency levels (PDF - 668 Kb)
  • 6.1 Existing evidence and arguments
  • 6.2 The relative impacts of the WACC, capex and opex
  • 6.3 Demand driven augmentation
  • 6.4 What does the RAB tell us?
  • 6.5 Expenditure, allowances and timing
  • 6.6 Public and private ownership
  • 6.7 Conclusions
• Chapter 7 Ownership (PDF - 312 Kb)
  • 7.1 A framework for considering ownership
  • 7.2 Incentive regulation and state-owned corporations
  • 7.3 Non-commercial imperatives and interference
  • 7.4 The productivity and performance of state-owned businesses
  • The bottom line
• Chapter 8 How should the Australian Energy Regulator use benchmarking? (PDF - 757 Kb)
  • 8.1 Could benchmarking have a mechanistic role in setting revenue allowances?
  • 8.2 Benchmarking could act as a basic test of the effectiveness of the regulatory regime
  • 8.3 Could more targeted analysis act as a filter?
  • 8.4 Benchmarking could be a trigger for negotiated settlements
  • 8.5 Information and 'moral suasion'
  • 8.6 The long-run application of benchmarking
  • 8.7 The regulator's benchmarking practices
  • 8.8 Conclusion

Volume 2

• Chapter 9 Peak demand and demand management (PDF - 697 Kb)
  • 9.1 What is peak demand and why is it a problem?
  • 9.2 A roadmap for how this report addresses peak demand management
  • 9.3 Facets of the peak demand problem
  • 9.4 What is demand management and how can it provide a solution?
  • 9.5 Demand management is not widely implemented
  • 9.6 Why is the uptake of demand management so low?
  • 9.7 Gauging the prospective benefits and costs of demand management
• Chapter 10 Technologies to achieve demand management (PDF - 1240 Kb)
  • 10.1 About demand management technologies
  • 10.2 Some challenges implementing smart meters
  • 10.3 Other technologies to reduce peak load inefficiencies
• Chapter 11 Moving to time-based pricing for the distribution network (PDF - 540 Kb)
  • 11.1 Introduction
  • 11.2 How do distribution businesses currently price?
  • 11.3 Implementing time-based pricing
• Chapter 12 Complementary reforms to support demand management (PDF - 399 Kb)
  • 12.1 Incentive regulation of network businesses
  • 12.2 Retailers' incentives and price regulation
• Chapter 13 Distributed generation (PDF - 346 Kb)
  • 13.1 What is distributed generation?
  • 13.2 Scale of distributed generation in Australia
  • 13.3 Potential benefits of distributed generation
  • 13.4 Effects of distributed generation on network costs
  • 13.5 Obstacles to efficient network investment
  • 13.6 Benchmarking to achieve efficient levels of network use of distributed generation
• Chapter 14 Building a reliability framework in order to benchmark (PDF - 375 Kb)
  • 14.1 What issues does reliability raise?
  • 14.2 Reliability under incentive regulation
  • 14.3 The costs of reliability for network businesses
  • 14.4 What level of reliability is efficient?
  • 14.5 Measuring the value of reliability
  • 14.6 Concluding comments
• Chapter 15 Transmission reliability (PDF - 566 Kb)
  • 15.1 Introduction
  • 15.2 Frameworks for transmission reliability
  • 15.3 New South Wales, Queensland and Tasmania
  • 15.4 Victoria and the Australian Energy Market Operator's preferred national model
  • 15.5 South Australia
  • 15.6 The AEMC hybrid model
  • 15.7 Summing up
  • 15.8 The way forward
  • 15.9 Delivering reliability in the shorter term
  • 15.10 Changes to transmission reliability
• Chapter 16 Distribution reliability (PDF - 611 Kb)
  • 16.1 Introduction
  • 16.2 Reliability performance of distribution businesses in the National Electricity Market
  • 16.3 Reliability settings for distribution networks in the National Electricity Market
  • 16.4 An efficient and effective distribution reliability framework — a bolstered STPIS
• Chapter 17 The role of interconnectors (PDF - 655 Kb)
  • 17.1 Background and perceived problems
  • 17.2 Some conceptual considerations
  • 17.3 Evidence of the efficiency of interconnection
• Chapter 18 Efficient use of interconnectors (PDF - 832 Kb)
  • 18.1 The spot market
  • 18.2 Disorderly bidding
  • 18.3 Potential solutions
  • 18.4 More fundamental reforms
  • 18.5 The hedging market
• Chapter 19 Identifying future transmission investment (PDF - 356 Kb)
  • 19.1 Transmission planning in context
  • 19.2 Transmission planning
  • 19.3 The Regulatory Investment Test for Transmission
• Chapter 20 Merchant interconnectors (PDF - 357 Kb)
  • 20.1 The role of merchant interconnectors in the National Electricity Market
  • 20.2 Regulatory biases
  • 20.3 Beneficiary pays
• Chapter 21 Governance (PDF - 1124 Kb)
  • 21.1 Governance of the Australian Energy Regulator
  • 21.2 Consumer engagement and representation
  • 21.3 Processes for amending electricity network regulation
• Appendix A Conduct of the inquiry (PDF - 165 Kb)
• References (PDF - 295 Kb)
• Appendix B The hold-up problem (PDF - 203 Kb)
• Appendix C Hedging in the electricity market (PDF - 335 Kb)
• Appendix D Modelling indirect effects in the RIT–T (PDF - 261 Kb)
• Appendix E International regulators' approach to merchant transmission investment (PDF - 103 Kb)

Download the technical papers

• Technical paper - The costs and benefits of demand management (PDF - 671 Kb)
• Technical paper - The costs and benefits of demand management (Word - 310 Kb)
• Technical paper - The costs and benefits of demand management spreadsheet (XLSX - 462 Kb)