The Australian Competition and Consumer Commission draft determination of changes to network pricing arrangements in the National Electricity Market was issued today
The ACCC's decision follows a review of the National Electricity Code's network pricing arrangements, which was conducted by the National Electricity Code Administrator.
"Network pricing is a key component in ensuring efficient and effective investment in networks that is necessary for security of supply and effective competition", Mr Rod Shogren, Commissioner with responsibility for energy matters, said today.
"The problem with the existing arrangements is that tariffs are largely paid for by end use customers and the prices are averaged with no user seeing the true cost of their use".
The ACCC has imposed conditions of authorisation that seek to address the anti-competitive detriment of the arrangements proposed by NECA.
"The ACCC's decision is a significant step to resolving the remaining impediments to transmission networks effectively contributing to the efficient operation of the wholesale electricity market. This decision will deliver public benefits by ultimately enhancing competition, encouraging more prudent use of network capacity and encouraging market based solutions to the provision of network services.
"The ACCC's decision will also help smaller generators that are located closer to customers to compete with the existing remotely located generators. These small, local generators tend to use either gas or renewable fuel sources rather than coal, so this decision will also assist in reducing Australia's greenhouse gas emissions in the longer term", Mr Shogren said.
Some of the other issues discussed in the draft determination include:
- a requirement for network business to disclose the method used to calculate customers' network charges and the various components of those charges;
- the introduction of rules for network services that are provided on a market rather than a regulated basis;
- an ability for the ACCC to adjust the revenue earned by transmission businesses if they do meet required service levels or if they exceed these levels; and
- a negotiation framework for customers seeking to negotiate with a monopoly transmission or distribution network business.
A copy of the draft determination is available on the ACCC website: http://www.accc.gov.au or from Mrs Maxine Helmling