The full decision RIS is now available on the SCER website. Officials will soon release for consultation a legislative package, including amendments to the National Electricity Law and National Gas Law, to give effect to this policy.The key policy changes are summarisedbelow.

SCER intends to keep the Australian Competition Tribunal (the Tribunal) as the review body and maintain the limited nature of merits review. However, SCER is introducing much clearer links to the long term interests of consumers through a series of changes to the national energy laws and rules which modify the test for initiation, processes, and roles of participants in a review process.

Limited Merits Review Test

Limited merits review will be based on the following processes:

  1. the applicant must demonstrate that the original decision-maker made an error of fact, an incorrect exercise of discretion or was unreasonable in its original decision and make a prima facie case that addressing this would lead to a materially preferable outcome in the long term interests of consumers; and
  2. the Tribunal assesses whether, taking into account any interlinked matters, addressing the grounds and the interlinked matters would deliver a materially preferable outcome (in the context of the overall decision) in the long term interests of consumers, as set out in the National Electricity Objective (NEO) or National Gas Objective (NGO).

The Role of the Regulator

For regulatory determinations, the regulator must:

  • develop a record of its regulatory process to be made available to the Tribunal for reviews; and
  • include in its final determination an explanation of the interlinkages between different component parts of its decision and how its overall decision is in the long term interests of consumers, in accordance with the NEO or NGO.

In addition, the regulator, in regulatory determination processes, and the Tribunal, in review processes, must:

  • where there is discretion around a range of decisions, make the overall decision that, on balance, it considers is materially preferable in terms of serving the long term interests of consumers as set out in the NEO or NGO; and
  • undertake appropriate consultation with relevant users or consumer groups served by the network business that is the subject of the regulatory determination.

Seeking Leave to Appeal

In applying for leave to appeal, applicants will be required to establish:

  • an error of fact, incorrect exercise of discretion or unreasonableness in the original decision; and
  • that there is a prima facie case that correcting the alleged error, incorrect use of discretion or unreasonableness will result in a materially preferable outcome compared to the original decision for delivering the long term interests of consumers as set out in the NEO and NGO. In doing so, the applicant must identify any interlinked areas of the original decision that contribute to the overall decision.

In assessing an application for leave to appeal, the Tribunal will determine whether the applicant has established an error of fact, incorrect exercise of discretion or unreasonableness and made a prima facie case that addressing these and any interlinked issues will result in a materially preferable overall decision in the long term interests of consumers.

The Role of the Tribunal in Undertaking a Review

In making its decision, the Tribunal must:

  • demonstrate that it provides, compared to the original decision, a materially preferable outcome in the long term interests of consumers as set out in the NEO and NGO;
  • seek guidance from the parties to the review and any interveners on interlinked areas;
  • demonstrate how it has taken into account interlinked areas when determining whether a materially preferable overall decision in the long term interests of consumers as set out in the NEO and NGO exists;
  • remit decisions to the original decision-maker routinely and only vary decisions where these are not of a highly technical nature; and
  • remit decisions to the original decision-maker where there is likely to be a materially preferable outcome in the long term interests of consumers as set out in the NEO and NGO, but where establishing this would require redoing the entire, or a significant proportion of, the original decision-making process.

The Tribunal would be generally limited to the information that was before the original decision-maker and, in the case of decisions by the regulator that must include, but is not limited to, the record of the regulator and relevant final determination. If a party wishes to submit new information, it must demonstrate that it:

  • is pertinent to the matter being heard;
  • was not unreasonably withheld from the original decision-maker; and
  • could reasonably be expected to have been considered by the regulator in its regulatory determination process.

Parties to Reviews, Costs, and Consumer Participation

All participants in reviews will generally be required to bear their own costs associated with participation in a review process. Network businesses will not be able to pass costs associated with reviews through to consumers as part of their regulated revenues, either prospectively or following a review.

Barriers to user and consumer participation will be addressed in the following ways:

  • the record of the regulator will include any submissions that were received from user and consumer groups;
  • the Tribunal will be required, as the regulator is required, to consult with users and consumers as part of its review process;
  • lowering of the risk that users and consumers may have legal costs incurred by network businesses or the regulator awarded against them; and
  • removal of the provision that small users and consumers may have costs awarded against them on the basis that they conducted their case without due regard to submissions or arguments made to the Tribunal by another party.

Changes to the Tribunal’s Functions in Legislation beyond the National Energy Laws

The Competition and Consumer Regulations 2010 will be amended to ensure the provisions that apply to the energy sector allow the Tribunal to take a less formal and more investigative process and that it act as speedily as a proper consideration of the matter allows, having regard to the scope of the issues being reviewed.

Review of the Tribunal’s Role in Energy Matters

A review of the Tribunal’s performance under these reformed arrangements will commence no later than the end of 2016. This review is intended to establish whether there is a requirement for future additional amendments to the structure of the Tribunal or the establishment of a new review body to ensure delivery of the policy intent.

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