Energy Reform: Look forward not backwards

Independent reports had shown that Australia did not have an infrastructure crisis and investment in electricity and gas transmission infrastructure has been unprecedented in recent years, Mr Ed Willett, an Australian Competition and Consumer Commissioner, told a CEDA Energy Reform seminar in Sydney today.

"We need to move on from this debate and instead continue to look for ways to improve regulatory arrangements and practices to promote investments in essential national infrastructure", he said. "We also need to focus on further structural reform measures, such as those noted recently by COAG, because it is these reforms that have the potential to deliver significant gains for consumers, business and the economy as a whole".

Mr Willett welcomed COAG's recent re-commitment to energy reform.

"One of the key reforms is the commitment to transfer distribution regulation to the AER [Australian Energy Regulator]. This has the potential to chip away at the multiple layers of regulation that are currently encountered by businesses.  COAG has also reaffirmed its commitment to phase out energy price regulation where effective competition can be demonstrated".

Mr Willett said COAG had established an Energy Reform Implementation Group which will report before the end of 2006 with proposals for achieving a fully national electricity transmission grid. It would also examine any measures needed to address structural issues affecting the ongoing competitiveness and efficiency of the electricity sector; and any measures needed to ensure transparent and effective financial markets to support energy markets. 

"These reviews address some of the key issues in the NEM, such as market structure and transmission planning. While it is not clear what the result of these reviews will be, a re-focusing on the key energy market reforms is a positive step".

Mr Willett said the AER was currently considering proposed changes to the National Electricity Rules.