On 26 February 2016, the Australian Competition Tribunal (the Tribunal) handed down its judgment on merits reviews sought by a number of energy networks and consumers on revenue determinations made by the Australian Energy Regulator (AER) in 2015. The Tribunal found in favour of the networks on most issues and did not uphold the appeals brought by consumers.
These merits reviews were the latest of several that have been sought, and typically won, by networks against the AER over the years. Critics have suggested that the repeated success of the businesses is evidence that the appeal arrangements are stacked against the AER. Some have also argued that these reviews are too complex, expensive and bad for consumers.
A knee-jerk policy response to these criticisms might be to curtail the existing appeal arrangements. This new bulletin from Frontier (Australia) explains why a merits review regime is essential to a well-functioning regulatory system.
For more information, please contact Marita O'Keeffe on m.okeeffe@frontier-economics.com.au or phone +61 3 9620 4488.
