A big win for energy consumers

The Australian Competition Tribunal decision on pricing reset proposals from Victorian energy distribution businesses has delivered a significant saving for Victorian energy consumers

The Australian Competition Tribunal has reviewed pricing reset proposals from Victorian energy distribution businesses and determined that they could not claim a further $345 million from Victorian consumers for building or maintaining the energy distribution network. This decision delivered a significant saving for Victorian energy consumers.

Throughout 2016, CPRC engaged in the Limited Merits Review process with the expert assistance of the Public Interest Advocacy Centre. In our submissions to the Australian Competition Tribunal, CPRC and PIAC argued against price rises in the Victorian Distribution Businesses’ regulatory reset proposals – the amount of money required to build and maintain the network of poles and wires.

In October 2017, the Tribunal rejected arguments from the five businesses that they should be allowed to recover costs of some $345 million from Victorian consumers. The Distribution Businesses did not appeal the decision.

Late last year, the Federal Government also abolished Limited Merits Review from the Electricity Distribution Price Reset process, by passing the Competition and Consumer Amendment Bill 2017, following CUAC’s and other submissions to the COAG Energy Council in late-2016 arguing for the process to be removed.

While supporting of the move, PIAC Senior Solicitor Julia Mansour noted that under the replacement review regime, “the Network companies will still be able to challenge the Regulator’s pricing decisions by seeking judicial review. The Victorian decisions show that stronger consumer involvement in reviews is crucial to achieving fairer outcomes in the price-setting process”.

The Senate Environment and Communications Legislation Committee subsequently recommended mechanisms to ensure standing- and cost-protections for consumers in judicial review proceedings.

While very welcome the next steps must be to ensure the alternate process better reflects consumer views in the price-setting processes and to rebuild consumer trust and better regulation of an evolving energy market.

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