Nexa Advisory welcomes the opportunity to respond to the Australian Energy Market Commission’s (AEMC) consultation paper on Package 1 of the Electricity Network Regulation Review and the related Nexa Advisory and Energy Networks Australia (ENA) rule change requests.
Since the rise in the take up of solar rooftop in Australia by consumers, the consumer energy market has been contested by incumbent networks. As a result, the protections delivered by the Australian Energy Regulator (AER) Ring-fencing Guideline (Guideline) have been progressively weakened – most visibly through the expansion and normalisation of waivers that permit distribution network service provider (DNSP) participation in contestable markets without sufficiently robust conditions, monitoring, or transparency. This creates material risks for competitive neutrality and consumer outcomes at precisely the time these markets are becoming central to the energy transition.
The clean energy transition requires capable, innovative and financially resilient networks that perform their essential monopoly functions in a timely and efficient fashion. It also requires competitive markets that can mobilise private capital, discover better business models and give consumers meaningful choice.
These objectives are complementary when the regulatory boundary is clear. Networks should provide regulated services, make network information and facilities available on fair terms, and procure competitive capabilities where possible. They should not receive a general licence to fund and operate adjacent services through the regulated asset base.
Nexa therefore urges the AEMC to:
- strengthen service-classification discipline, connection and access arrangements, cost allocation and ring-fencing;
- progress Nexa’s rule change through a principles-based NER and detailed AER guideline model; and
- reject the ENA rule change proposal.
Read our full submission here: Nexa Advisory submission – AEMC ENRR Package 1