This document is a proposal to the Australian Energy Markets Commission (AEMC) to change the National Electricity Rules (the Rules) in respect of the calculation of the regulated return on debt.
This proposal represents the views of the seven sponsoring companies who constitute the Rule Change Committee: Amcor, Australian Paper, Rio Tinto, Simplot, Wesfarmers, Westfield and Woolworths. These companies are members of the Energy Users Association of Australia.
The member companies of the Committee include four of Australia’s 20 largest listed companies and together the member companies cover a broad cross-section of the Australian economy including manufacturing, resources, property and retail.
The members of the Committee have become concerned about electricity price increases. Rising network charges resulting from higher capital expenditure and higher regulated rates of returns have been the main factors. The Committee examined this and concluded that failures in the design and conduct of regulation have played a significant part in this outcome. It has delivered excessive over-investment and windfall gains for the owners of the regulated network service providers (NSPs). Addressing these failures will help to ensure a sustainable and reliable industry that charges for its services fairly.
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