On 19 August the Council of Australian Governments (COAG) Energy Council decided that its Senior Committee of Officials would conduct a fresh review of the limited merits review (LMR) regime that applies to regulated energy networks in Australia. The current LMR regime allows networks regulated under the National Electricity Law and the National Gas Law to seek merits reviews of the decisions made by the Australian Energy Regulator. A number of such reviews have been sought recently.

The terms of reference for the inquiry states that it will assess:

  • the effectiveness of the merits review regime under the NEL and the NGL since the last such inquiry was concluded in 2013; and
  • whether and to what extent the LMR regime has met its original policy intent.

The terms of reference also makes clear that the inquire must “explore all feasible options, including the removal of limited merits review, to achieve the objectives of administrative review generally and the energy sector specifically.”

A recent bulletin from Frontier (Asia-Pacific), Unappealing prospects, explains why a merits review regime is essential to a well-functioning regulatory system, and argues that a knee-jerk policy response that curtails or removes the existing LMR regime should be avoided.

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