The AEMC is seeking stakeholder feedback on the proposed approach to the 2019 review of economic regulation of electricity networks.

This annual review considers potential changes to the regulatory framework to support the continual evolution of the grid as more and more decentralised energy resources like solar PV, battery storage and electric vehicles connect.

This includes looking at better ways for network businesses to integrate and use distributed energy resources located in homes and businesses, where these are a lower cost alternative to investing in poles and wires.

In a new paper, the Commission sets out its approach to determining whether the economic regulatory framework is robust, flexible and continues to support the efficient operation of the energy market in the long term interest of consumers.

The proposed key areas to cover are:

  • Possible alternative ways of assessing network expenditure and remuneration – as recommended by the Finkel Review and following on from the Commission’s 2018 Review that found the incentives for capital and operating expenditure are not aligned
  • Whether new metrics or issues should be included in the Commission’s annual monitoring of key trends in grid usage and development and uptake of new technologies and business models
  • How to best facilitate innovative network projects, potentially through formal regulatory sandbox arrangements. Consultation on the regulatory sandbox component of the review started in December 2018 with advice on any proposed arrangements to be included in the 2019 final report.

The final report for the 2019 Electricity economic regulatory frameworks review will also provide a centralised repository of information and an update on the work already underway to support efficient investment in decentralised energy resources.

Submissions to the approach paper close on 14 February 2019. A stakeholder workshop will be held in March. Details will be provided in coming weeks.

This review forms part of the AEMC’s ongoing work to give consumers more choices about energy products and services and to support the evolution of the energy sector.

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