Australian Energy Regulator
The Australian Energy Regulator (AER) is the regulator of the wholesale electricity and gas markets in Australia. It is part of the Australian Competition and Consumer Commission and enforces the rules established by the Australian Energy Market Commission.
The AER was established in July 2005. The next year all 13 bodies previously responsible for energy regulation had transferred responsibility to the AER. Decisions made by the regulator are subject to appeal.
The AER’s current functions are focused on regulating the natural monopoly transmission and distribution sectors of the national electricity market, monitoring the wholesale electricity market and enforcing electricity market rules. The AER's regulatory functions and powers are conferred upon it by the national electricity law and the national electricity rules.
Under the national electricity law and national electricity rules, the AER’s key responsibilities at the present time include:
- regulating the revenues of transmission network service providers by establishing revenue caps
- regulating the revenues of distribution network service providers
- monitoring the electricity wholesale market
- monitoring compliance with the national electricity law, national electricity rules and national electricity regulations
- investigating breaches or possible breaches of provisions of the national electricity law, rules and regulations
- instituting and conducting enforcement proceedings against relevant market participants
- establishing service standards for electricity transmission network service providers
- establishing ring-fencing guidelines for business operations with respect to regulated transmission services
- exempting network service providers from registration.
The AER currently has three members who are statutory appointments, including a full-time chair. Mr Andrew Reeves is the Chair of the AER. Part IIIAA of the Trade Practices Act provides that one of the members of the AER must be a commissioner of the ACCC, with Mr Edward Willett appointed in this capacity. Ms Cristina Cifuentes is the AER member selected by the States and Territories. The chairman Andrew Reeves has been critical of the rules regarding how prices are determined saying there is a "systematic bias towards inflated forecasts".
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