The COAG Energy Council announced today that the energy Ministers of Australia’s States and Territories had agreed that the rights of parties affected by the decisions of the Australian Energy Regulator to seek limited merits reviews by the Australian Competition Tribunal (the Tribunal) would not be abolished. Instead, the COAG Energy Council agreed to implement a series of reforms to the existing limited merits review arrangements. This decision followed a three month inquiry into four policy options: (1) maintain the existing appeal arrangements as they are; (2) pursue legislative amendments to reform the appeal arrangements; (3) reform the way the Tribunal makes its decisions; and (4) scrap limited merits review rights altogether. The inquiry was initiated by the COAG Energy Council after some Ministers expressed concerns that there had been an excessive number of expensive and time-consuming appeals recently, and that the existing arrangements may not be serving the long-term interests of consumers properly.

During the inquiry, Frontier Economics and leading law firm Herbert Smith Freehills were engaged by Energy Networks Australia to prepare a policy paper explaining why limited merits review rights were essential to providing checks and balances on regulatory decision-making and promoting confidence in the regulatory system. The report also proposed a range of reform options targeted at addressing the concerns expressed by policymakers. The report was consistent with the ultimate findings of the COAG Energy Council that the limited merits review regime should be retained but reformed.

A working group of officials has been tasked with developing detailed legislative amendments, which the COAG Energy Council is due to consider in the first quarter of 2017.

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