AER’s Conboy on restoring confidence in energy regulation

AER Chair Paula Conboy

AER Chair Paula Conboy

Australian Energy Regulator (AER) Chair Paula Conboy has signalled a new approach to energy network regulation, which will see greater collaboration by the regulator and energy businesses for the benefit of consumers.

Speaking in Brisbane at the 2017 Energy Networks Australia Regulation Seminar on the topic of ‘Evolving faster: regulating transformed energy markets’, Ms Conboy said that increased funding for the AER and the Commonwealth Government’s proposed removal of limited merits review will change the way the AER does business.

“In a world without limited merits review, everyone needs to engage earlier in the regulatory process so that we can resolve key points of disagreement between stakeholders.”

The limited merits review process produced a more adversarial relationship between the regulator and regulated entities in the past, but the removal of the review process means a change of approach by all is inevitable, according to Ms Conboy.

“That change can and should result in a more transparent and positive interaction between the market, the regulator and that most important component of the jigsaw, the consumer,” Ms Conboy said.

“We are already seeing some network businesses responding to the need to vary their approach to stakeholder engagement. Many are now proactively engaging consumers in their regulatory process and reaping the rewards,” she added.

Citing Australian Gas Networks and its recent access arrangement proposal, Ms Conboy said “Our goal is to incentivise and reward well-evidenced, transparent and reasonably costed regulatory proposals. Further, this process could save consumers, the businesses and the AER significant resources, and promote greater regulatory predictability. I think AGN would agree that the approach they took in their Victorian and South Australian gas reviews led to a much more streamlined process for all involved.”

Ms Conboy also reaffirmed the AER’s strong commitment to stakeholder engagement.

“We will continue to undertake extensive consultation throughout each of our regulatory processes. Consultation is not something we pay lip service to—it is foundational to our ethos, and that will not change.”

To read Ms Conboy’s full speech, click here.

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