The Australian Energy Market Commission (AEMC) has published terms of reference for a review to develop new approaches for the regulation of electricity distribution and transmission reliability across the National Electricity Market (NEM).

The joint Review of National Frameworks for Transmission and Distribution Reliability is part of the package of reforms announced by the Council of Australian Governments (COAG) on 7 December 2012.

It notes that costs associated with investment in network infrastructure are passed on to consumers through electricity bills; and underlines the importance of having networks provide reliability levels consistent with the price that consumers are willing to pay.

COAG’s Standing Council on Energy and Resources (SCER) acknowledged that it is appropriate for reliability levels to vary within jurisdictions, but recognised that the way that reliability levels are set currently differs across the market.

The state, territory and federal energy ministers have asked the AEMC to develop nationally consistent frameworks for expressing and setting standards; and reporting on transmission and distribution reliability outcomes. SCER requests that the frameworks incorporate values of customer reliability, assessment of price/reliability trade-offs and be able to account for local conditions.

This review will be conducted as separate transmission and distribution workstreams and will build on previous work undertaken by the AEMC, specifically:

  • the SCER response to the AEMC’s National Transmission Reliability Standard Framework, published in November 2011;
  • the Review of Distribution Reliability Outcomes and Standards, New South Wales workstream, finalised by the AEMC on 31 August 2012; and
  • the national workstream for the Review of Distribution Reliability Outcomes and Standards draft report, published by the AEMC on 28 November 2012.

For more information please see the Australian Energy Market Commission website.