The Australian Energy Regulator (AER), Energy Networks Australia and Energy Consumers Australia are working together in a new initiative to find ways to better engage customers in network revenue determination processes and identify opportunities for regulatory innovation.

The three organisations believe there are opportunities to better incorporate consumer views in revenue determination processes, and to improve consumer trust and confidence in network regulation. Energy customers’ priorities should drive business and regulatory outcomes.

Through this joint initiative, the AER, Energy Consumers Australia and Energy Networks Australia aim to explore options for consumers and businesses who want to have deeper engagement in the development and approval of regulatory proposals. This may lead to developing an alternative path for network businesses to take in forming their regulatory proposals, and for the AER in approving those proposals.

The AER is looking at ways to closely engage with network businesses and their customers to identify key issues earlier, and work collaboratively to resolve them—even before a regulatory proposal is lodged.

The AER’s revenue determination process under the National Electricity Rules or National Gas Rules could then be aligned with the degree of agreement reached between the business and suitably qualified customer representatives. This could mean some AER decision processes are streamlined or expedited, as long as the proposal meets the long term interests of consumers.

It is an experimental approach to promote regulatory innovation. We intend to learn by ‘doing’. The goal is to undertake a trial in the development of one or more network businesses’ revenue proposals in the near future, and consider further reform opportunities. This process of exploration will be an important outcome of the joint initiative in itself.

We will all consult with our stakeholders on this initiative, including through a discussion paper, workshop and public submissions process.

Constructive engagement with customers is increasingly important as the energy sector continues to transform. This initiative is an example of the proactive, stakeholder collaboration that will be required in order to meet customer needs into the future.

For more details contact Garth Crawford: (02) 6272 1555.

If you would like to receive updates throughout this consultation process, please register your interest at: RegulatoryInnovation@aer.gov.au.