Submission to AER’s Review of options to address gaps in transmission ring-fencing framework

PIAC provided a response to the Australian Energy Regulator’s (AER) consultation paper on Options to address gaps in transmission ringfencing framework.

We support the strengthening of the ringfencing regime, enabling a greater set of services to be provided on a contestable basis. There is substantial revenue available to be returned to consumers by driving down costs of contestable services, most notably connection and storage.

We note however, that while the regulatory changes enabling generators to use third-party providers for things like connection storage have been in place for some time, the actual take-up of services provided by anyone other than the regulated Transmission Service Provider (TNSP) has so far been very small.

This is likely because generators don’t want to take on the risks less preferential treatment or even retaliation from the TNSP for using other providers. It’s not that discriminatory behaviour has actually occurred – it’s just the potential for it that drives generators to take the ‘safe’ option of sticking with the regulated provider.

In order to alleviate this and drive real competition for connection and other services, we support adding transparency and reporting requirements for TNSPs, as well as providing the AER new powers to address discriminatory behaviour when it occurs, or when there is potential for it to occur.

In addition, we propose a new mechanism for generators to lodge complaints with the AER citing concerns about discriminatory behaviour confidentially, and ensure that the AER’s investigations and actions do not expose complainants to identification by and discrimination from the TNSP.