The Australian Energy Market Commission (AEMC) has released the final position paper on economic regulation of network service providers and price regulation of gas services.

 

The new rules will give the regulator a suite of new tools to set maximum prices that network businesses will be allowed to charge.

 

The rules will also introduce incentives to improve business practice and efficiency by requiring the regulator to benchmark network companies against each other and publish regular performance reviews.

 

They also allow the Australian Energy Regulator (AER) to review past efficiency of network spending when determining revenues and prices for network businesses.

 

AEMC Chairman, John Pierce, said the new rules were focused on improving the AER’s capacity by giving it a new toolkit to determine efficient costs for each regulated business – and enabling it to decide what costs are efficient.”

 

“These new rules will have an immediate impact on the AER’s ability to set efficient costs.,” Mr Pierce said.

 

“These costs are one of the factors that affect price outcomes, along with management and shareholder oversight of network businesses, and elements of the external environment such as overall electricity demand.”

 

 

The final rules will be outlined on November 29, with the rules coming into effect on that day.