The New South Wales, Victorian and Queensland Governments have joined forces to fight for regulatory reform of the federal energy sector and will push for greater consumer protections at a special meeting of Energy Ministers today.
New South Wales Energy Minister Chris Hartcher, Victorian Energy Minister Michael O’Brien and Queensland Energy Minister Mark McArdle will call for major changes to national regulatory arrangements to better protect the interests of households and small business.
“The Australian Energy Regulator (AER) must operate in the ‘long-term interest of consumers’. With a 60 per cent increase in electricity prices in New South Wales over the last five years and with the other Eastern States experiencing increases also, clearly the interests of consumers have been ignored and the Federal regulator has failed,” Mr Hartcher said.
“Ironically, when the Prime Minister speaks about overspending by state network businesses she doesn’t understand that it’s her own Commonwealth body that regulates their capital expenditure.
“In 2009 the AER determined New South Wales network expenditure for the period up to 2014, which locked in a five-year impost on consumer power bills. About $25 billion was approved by the regulator and an additional $1.8 billion was added to prices as a result of the defective appeals process.
“The States, industry and the Federal agencies all understand that reforming the regulatory framework is the most significant structural change needed in the national market. The Prime Minister does not.
“The benefit of the New South Wales Government’s reform of the distribution businesses and at least $400 million in savings won’t be realised for consumers if the AER isn’t better resourced and better respected.”
Mr O’Brien said that the Australian Energy Regulator needed to be separated from the Australian Competition and Consumer Commission (ACCC), to create a stronger umpire with greater independence and clearer accountability.
“The size of household power bills are directly affected by the strength and capacity of our energy regulator. Australians need an independent expert watchdog with better resourcing to protect consumer interests,” Mr O’Brien said.
“A standalone regulator is in the best interests of energy customers. The time for Australia’s energy regulator being tied to the apron strings of the ACCC has well and truly passed.”
Mr McArdle said the three Energy Ministers remain committed to making changes that will provide benefits to households over the long term.
“Queensland consumers will be best served by a fully independent AER with transparent decision making processes,” Mr McArdle said.
“An independent AER is a very reasonable proposition that would help to deliver important outcomes for consumers that the Prime Minister says she wants as an outcome from COAG.
“This is a reform that has wide acceptance from all sections of the electricity industry and is only being blocked by the Commonwealth.”
The three Energy Ministers said they will continue working to identify opportunities that promote the best interests of electricity consumers across the three States.