The AEMC received SCER’s terms of reference on 22 January 2013 seeking advice on implications of differences between actual and forecast demand within the operation of the economic regulatory frameworks for network service providers under the National Electricity Rules (NER).

This request for advice follows the package of reforms agreed to by SCER on 23 November 2012, and subsequently endorsed by the Council of Australian Governments at its meeting on 7 December 2012.

In the request for advice SCER noted that recent observations on demand suggest that there may be a sustained slowing of the growth in peak demand and a decline in average demand. SCER requested the AEMC to provide advice on:

• whether any changes to the NER are needed to ensure consumers receive the benefits of sustained reductions in demand; and
• how should the Australian Energy Regulator (AER) consider differences in demand when undertaking regulatory determinations, including but not limited to, the AER’s ability to consider previously approved capital expenditure and improvements to NER around annual network tariff setting.

As required by the request for advice, the AEMC consulted with a range of stakeholders in developing its advice. To give interested stakeholders appropriate opportunity to present their views on the questions, we held a stakeholder workshop on 28 February 2013 and circulated a short discussion paper.

Following the workshop, we received nine submissions from stakeholders that included network service providers, the Australian Energy Market Operator and consumer representative groups.

Documents from the workshop and stakeholder submissions received are available below.

The AEMC's advice was sent to SCER on 26 April 2013. SCER considered the AEMC's advice at its meeting on 31 May 2013 and released its response. Further details on SCER’s response are available on its website in SCER Bulletin number 4 - May 2013.

SCER also agreed for the AEMC to publish its advice. The advice is available below.