The Productivity Commission has published a draft report that has found that regulation and ownership arrangements of electricity networks ‘require overhaul’ to create a more consumer-orientated energy market.

 

The Electricity Network Regulation Frameworks report found that the costs of electricity network – the poles and wires criss-crossing the seaboard – now represent as much as one-half of the average person’s power bills, with network costs responsible for much of the surge in electricity prices over the last five years.

 

“The current regulatory regime is undermining the capacity of network business managers to run their businesses efficiently, and puts up barriers to consumer involvement. There is no quick fix, but our proposed reforms can deliver a more efficient system and potentially save billions of dollars,”  Presiding Commissioner Philip Weickhardt said.

 

The Commission concluded that a phased introduction of a more cost-based pricing scheme, combined with smart technologies, would lead to a significant cut to network costs and end the need for large hidden subsidies.

 

The Commission also recommended the formation of a new industry-funded consumer body to oversee the creation of regulatory determinations and merit reviews.

 

The full report can be found here