Submission to draft Terms of Reference for IPART to review electricity distribution reliability standards

PIAC supports the NSW Independent Pricing and Regulatory Tribunal (IPART) developing a report which recommends “changes to electricity distribution reliability standards… that could deliver bill savings.” This should lead to a correction of the earlier over-investment in the NSW electricity distribution networks which been a major cause of the affordability pressures faced by NSW households.

PIAC also supports IPART recommending “any other measures that could be imposed on or implemented by the NSW distribution network businesses within the current regulatory framework that would be likely to reduce network prices.” Distribution network businesses are currently required by national regulations to engage and listen to consumers. However, PIAC considers there would be benefit from greater prescription in certain aspects of network engagement – in particular, network businesses should also be required to demonstrate how they have taken onboard the information gathered through engaging with consumers.

PIAC supports IPART’s review of the reliability standard being done on the basis of an economic assessment with informed, deliberative consumer engagement. A robust and transparent economic assessment must ensure that the costs of any changes to the reliability standard are outweighed by the benefits consumers will receive. An essential part of this is the use of deliberative engagement to obtain informed input from consumers about exactly what services consumers value and their relative importance compared against other pressures such as price.