Since 2008, the Courts have ruled repeatedly that a series of decisions made by the Australian Energy Regulator (AER) have contained material errors that need to be corrected in order to promote the long-term interests of consumers of energy in Australia.

Following a number of recent appeals that once again found the AER had erred in its decisions, the Federal Government has introduced a Bill into Parliament that seeks to abolish limited merits reviews (LMRs) of regulatory decisions made by the AER. The passing of the Bill into law would effectively ban any challenge to the AER acting against the long-term interests of consumers or setting the revenues that regulated energy networks are allowed to earn below their efficient costs. The Turnbull Government’s attempts to remove scrutiny of the AER will increase the chance of political interference in what was designed to be an independent regulatory process.

Frontier Economics’ Managing Director, Danny Price, explains in this submission to the Senate Legislation Committee examining the Bill why abolition of LMR rights would harm, rather than promote, the long-term interest of consumers of energy in Australia.

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