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Today the Australian Competition Tribunal published its judgments on several merits reviews of revenue reset decisions made by the Australian Energy Regulator (AER). These appeals, the most complex of their kind ever seen in Australia, were brought by the Public Interest Advocacy Centre (PIAC) on behalf of electricity consumers, three electricity distributors in New South Wales (NSW), one electricity distributor in the Australian Capital Territory, and one gas pipeline network operator in NSW. The revenue impact of the errors claimed by the appellants, over the forthcoming regulatory period, totalled in excess of A$8.5 billion. The issues on which review was sought were very wide-ranging. In terms of revenue impact, the most substantive issues related to the AER’s decisions on the return on equity allowance, the return on debt allowance, the value of imputation credits (for the purposes of determining the corporation tax allowance) and the AER’s use of benchmarking to determine operating expenditure allowances for the electricity distributors that sought review. Frontier (Australia and Europe, jointly) advised the networks involved in the appeals on all of these issues. The Tribunal found that the AER had erred in relation to all of these matters, except the return on equity, and has remitted them back to the AER for reconsideration. The Tribunal did not uphold the appeals brought by PIAC.

For more information, please contact Marita O’Keeffe on m.okeeffe@frontier-economics.com.au or phone +61 3 9620 4488.

Last week, Frontier (Australia) hosted a series of seminars in Melbourne, Sydney, Canberra and Brisbane aimed at stimulating policy debate on the future of energy network regulation in Australia. The seminars examined how regulators could design incentives to encourage regulated energy networks to become more efficient and provide higher quality services to customers. In particular, the seminars examined recent innovations in incentive use by Ofgem in Great Britain, and considered what lessons from that experience could be drawn for Australia.

The seminars were delivered by a panel of speakers, including Commissioners from the Australian Energy Markets Commission, Board Members from the Australian Energy Regulator, Mike Huggins (Director, Frontier Economics) and senior management from Australian Gas Networks. Over 250 people, including consumer and public interest groups, policy makers, regulators, members of the energy industry and other regulated industries, and academics attended in the four cities.

For more information, please contact Marita O’Keeffe on m.okeeffe@frontier-economics.com.au or phone +61 3 9620 4488.

Dr Philip Williams AM, Head of Legal and Competition at Frontier (Australia), presented this evening at the second annual Bannerman Competition Lecture in Melbourne. The event was hosted by the Australian Competition and Consumer Commission and the Business Law section of the Law Council of Australia.

Philip’s lecture, ‘QCMA: 40 years on’, reflected on the Queensland Co-Op Milling Association Limited and Defiance Holdings Limited (QCMA) matter, ruled on by the Trade Practices Tribunal in 1976.

Comments in memory of Ron Bannerman (appointed the first Commissioner of Trade Practices in 1966 and then inaugural Chairman of the Trade Practices Commission in 1974) were delivered by Professor Maureen Brunt AO. The landmark determination, which Professor Brunt contributed to as a Tribunal member, determined a methodology for analysing competition issues which was adopted by the Federal and High Courts and is still influential today.

Philip's speech is available here.

For more information, please contact Marita O’Keeffe on m.okeeffe@frontier-economics.com.au or phone +61 3 9620 4488.

 

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