The Australian Competition and Consumer Commission today issued its Draft Statement of Principles for the Regulation of Electricity Transmission Revenues (DRP). The DRP is a guide for the regulation of electricity transmission business revenues.
"The focus of the review has been on improving the climate for investment through greater certainty, improving incentives for efficiency, and providing greater transparency about transmission network performance", an ACCC Commissioner, Mr Ed Willett, said.
"The ACCC, through its review of the DRP, has taken measures to increase certainty of investment for transmission networks through its decisions on the value of the asset base, the capital expenditure (capex) framework and weighted average cost of capital (WACC).
"Recent investment outcomes show around $4.6 billion invested in transmission. The changes proposed aim to further underpin strong investment outcomes.
"Further the ACCC is adopting an incentive form of regulation which aims to encourage efficiency while balancing the provision of adequate service quality to consumers".
In August 2003, the ACCC issued a discussion paper seeking comments on the DRP. The ACCC has now issued:
- the Draft Statement of Principles for the Regulation of Electricity Transmission revenues – Background Paper (Draft Background Paper)
- the Draft Statement of Principles for the Regulation of Electricity Transmission Revenues (Draft SRP). This document is a consolidated version of the revised regulatory principles set out at the end of each chapter of the Draft Background Paper.
Both documents will be available at the ACCC's website.
The DRP forms part of a package which aims to improve investment outcomes in the NEM. Other elements of the package include:
- the Regulatory Tes
- new Service Standards measure
- the Electricity Regulatory Report for 2002/03.
The ACCC invites interested parties to comment on the issues outlined in the Draft Background Paper and the Draft SRP. It expects to issue the final SRP document early next year.