On 1 October the AEMC published the final report for the 2020 Electricity network economic regulatory framework review (2020 Review).

In this year's report, the Commission outlines its priority reform considerations for distribution and transmission network regulation over the next 18 months, and how this fits with the Energy Security Board’s Post 2025 Market Design for the national electricity market review.

In particular, this year's report explores the implications of some major developments highlighted by this consultation:

• the evolving role of distribution networks
• the implementation of the Integrated System Plan (ISP) for transmission networks
• innovative approaches to consumer engagement. 

The issues identified in this year's review have differing levels of urgency. Some actions require significant stakeholder consultation, while others require further investigation or continued monitoring.

Next steps

The Commission will commence work to clarify the role of distribution networks in the changing electricity sector, and to ensure an appropriate regulatory framework is in place to support network transformation.

The Commission will continue to engage with stakeholders to monitor emerging issues and consider future priorities, especially in relation to distributed energy resources integration, implementation of the ISP and consumer engagement.

Consultation process

On 4 June 2020 the AEMC published an approach paper for the 2020 Electricity network economic regulatory framework review (2020 Review).

Submissions to the approach paper closed on 2 July 2020. The Commission received 14 submissions, which are available below.

The Commission also engaged an expert consultant, farrierswier, to conduct a series of independent interviews with key stakeholders to explore priorities for network regulation reform and better understand stakeholder views. Farrierswier conducted 17 interviews with a wide range of organisations, including consumer groups, network businesses, retailers, market bodies and governments. The report prepared for the Commission can be found below.

Background

The annual review of the economic regulatory framework for electricity networks is part of the AEMC’s work to support the continual evolution of the energy sector.

In light of the significant growth in decentralised energy resources, the Ministerial Forum of Energy Ministers (formerly COAG Energy Council) directed the AEMC to annually examine and report on whether the economic regulatory framework is robust, flexible and continues to support the efficient operation of the energy market in the long-term interest of consumers.

This is done by monitoring changes and developments in the national electricity market (NEM) and where necessary, recommend changes to the economic regulatory framework to the Ministerial Forum of Energy Ministers (formerly COAG Energy Council).