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20 May 2011

Dear Raif

United Energy Distribution (UED) and Multinet (the businesses) welcome the opportunity to comment on the Department of Primary Industries (DPI) Issues Paper titled Victorian Licensing Arrangements.

The businesses appreciate the consultation on these important licensing and Victorian regulatory design issues. The businesses note from our previous discussions with you, that these issues will be decided around July-August this year in preparation for agreed policy decisions to be provided to Cabinet for drafting. The businesses welcome the opportunity to continue meeting with DPI on a regular basis to discuss the DPI position on these issues and to understand where the framework is heading.

Our detailed response is attached, in summary our key messages are:

  • The businesses support the need to continue an ongoing minimal licensing regime in Victoria for network businesses. This is the most efficient solution whilst providing regulatory continuity and investment certainty.
  • The suggested reduction in regulatory burden with a statutory authorisations regime is illusory ¡V the authorisation regime for retailers under the National Energy Customer Framework (NECF) contains all the same features of a licensing regime.
  • The businesses suggest the Victorian licensing regime be dealt with in the Application Act for the NECF.
  • The businesses are supportive of the Australian Energy Regulator (AER) managing the ongoing network licence framework.
  • Investor institutions take the Victorian network licence seriously and also the mechanism regarding a potential loss of licence. The businesses are concerned that any change in this area may impact investor¡¦s views and credit rating agencies views of the regulatory certainty that holding a licence brings to the table. Any adverse impacts or uncertainty in this area could result in lower credit ratings and increased costs of borrowings which is not in the interests of customers.
  • As a general statement, the businesses support that the remaining regulatory arrangements for Victoria should be managed by the national rule maker as opposed to straying from the benefits of the national reform.
  • The DPI gap analysis document would be useful to assess the types of issues which are seen as needing to remain because the management of remaining Victorian obligations may be best assessed on a case by case basis.
  • It would be beneficial to include the Victorian arrangements in the most relevant national instrument over time as Victorian requirements. By adopting this approach, this allows all jurisdictional differences to be defined and located together and potentially aligned over time.
  • Even if the Government is not attracted to some Victorian matters being housed as Victorian variations within national instruments, subject to approval of the Ministerial Council on Energy (MCE), the businesses strongly urge the Government to place obligations that are related to service delivery and access matters (eg Guaranteed Service Levels (GSLs) and unaccounted for gas (UaFG)) with the AER.

Please feel free to call me if you wish to discuss any aspects of this submission further.

Yours sincerely

Verity Watson
Manager Regulatory Strategy

Attachment

Background

The NECF provides a framework which requires retailers to move from the current jurisdictional licensing arrangements for each fuel to a national retailer authorisation scheme. The Issues Papers suggest that the relevant entities covered by NECF are:

  • Authorised retailers;
  • Entities that retail electricity but are exempt from authorisation;
  • Electricity distributors who are Distribution Network Service Providers (DNSP¡¦s) under the National Electricity Law (NEL);
  • Gas distributors subject to access regulation under the National Gas Law (NGL); and
  • Other jurisdictionally nominated distributors.

The Issues Paper therefore considers that from a NECF viewpoint alone, no licensing regime is necessary. However, the licensing regime performs a diverse range of functions:

  1. Limiting entry to the energy sector.
  2. Imposing regulatory obligations on licensed businesses.
  3. Imposing statutory obligations on licensed businesses.
  4. Prohibiting cross-ownership between licensed businesses of different types.
  5. Identifying energy businesses that may exercise special statutory powers.
  6. Requiring exit from the energy sector (revocation).
  7. Funding regulatory activities.

The Issues Paper recognises that these matters are significant in the development of the overall regulatory regime in Victoria once NECF is in place. Any changes in the licensing framework need to be considered in conjunction with the enforcement regime.

United Energy and Multinet (the businesses) welcome the opportunity to comment on this important Issues Paper and look forward to further consultation and discussions with DPI on the Victorian regulatory framework.

Future of Distribution licensing arrangements

The Issues Paper suggests a number of options of how the current licensing arrangements could better align with the national framework for energy regulation, these include;

  1. Repealing the license regime in its entirety;
  2. Replacement with more limited nomination or registration regime; and/or
  3. Supplementation of these options with a more robust regime for regulating small scale energy suppliers.

In assessing the future need for a Victorian electricity and gas distribution licensing framework, the DPI poses several questions:

  • Will there be substantial functions remaining within the Victorian energy legislative or regulatory framework which are currently underpinned by licenses?
  • If so must these functions be performed by a licensing regime? „h If not, what are the alternative means for achieving the same end?

The Issues Paper recognises that there may be two separate issues in the management of regulatory functions in this area ¡V large scale licensed distributors and small scale exemptvnetworks. In relation to small scale activities, DPI note that there is significant innovation occurring in the small scale area which seeks to improve energy efficiency by combining on site power generation with utilisation of waste heat etc. While DPI note that any solution needs to be flexible enough to not prevent development in this area, DPI are not seeking to reproduce the shortcomings of the current exempt network arrangements in a future regime under NECF.

Questions

  1. What should the basis of any limitation on entry to the distribution sector be?
  2. What kinds of network infrastructure should be exempted from such a limitation?
  3. What measure of competence should be satisfied by a business choosing to build some form of distribution infrastructure?

The businesses support the DPI assumption that organisations with sufficient financial resources to purchase ownership of a distribution company should also have the resources to ensure that it continues to be run competently. Whilst financial viability has been part of the entry criteria for retailers, the Victorian framework has never considered financial viability as an entry criterion for distribution.

The businesses support maintaining an ongoing Victorian distribution licence for large scale networks.

DPI considers that it is impractical to prevent entry for those who must operate some form of distribution infrastructure unavoidably and incidentally to their business. Whilst DPI wish to encourage competition and innovation in this area, they have acknowledged that there is no regulatory awareness of the extent of small scale operations nor monitoring or enforcement of these activities.

Further DPI acknowledge that customers interests are best protected by ensuring that entry is limited to competent entities whilst allowing innovation in new network infrastructure to be built on competitive terms in a well regulated matter.

The Essential Services Commission (ESC) and DPI have both consulted on the management of small scale exempt network activities in the past.

The AER will also embark on consultation on the ongoing exempt network framework in relation to the National Electricity Rules (NER) in the future.

Further complexity is added to the small scale activities in relation to smart meter services within embedded networks (for example time of use pricing/price signals, customer protections, privacy considerations etc). The management of some of these issues could be perceived as matters best dealt with by the jurisdiction. However these issues also need to be considered in relation to many of the customer protections afforded by NECF for distribution activities. Also, there is an interplay with the potential ongoing need for licensed distributors to meet the market transaction/data requirements under the NER for embedded network customers to have a retailer of choice.

As smart meters provide more opportunity for varied services to customers by a number of parties, these matters are likely to become more complex. Policy decisions in this area need to be well considered and informed by consultation with the various stakeholders. Continuation of electricity embedded networks needs to be supported by clear roles and responsibilities of the licensed distributor and the small scale operator across the whole regulatory framework.

At one level a licensing or registration framework could be considered a means of providing a regulatory hook to maintain awareness of the growing number of embedded networks and customers impacted. A licensing framework could be used to ensure that customers were offered the same levels of protection within embedded networks as those directly connected on the licensed distributor¡¦s network.

The businesses strongly support the DPI view that retailer of choice in gas embedded networks is not practical and hence gas embedded networks should be more restrictive.

Imposing regulatory obligations on licensed distribution businesses

The Issues Paper recognises that there are a number of Victorian regulatory instruments which concern the operation of the Victorian interconnected energy systems which are not covered by national frameworks eg Victorian Codes and Orders in Council for Advanced Metering Infrastructure (AMI).

DPI should also include the tariff order and the excluded service guideline in this list as these support the framework for other AMI services which are not covered by the NER. Additional customer protections for smart meters placed in the Electricity Customer Metering Code, Energy Retail Code and Distribution Code/Use of System Agreement (UoSA) should also be considered. These additional customer protections may relate to distributor ¡V retailer arrangements or to retailer -customer engagement.

Imposing regulatory obligations on retail businesses

In relation to the retailer-customer engagement, from the Issues Paper it is unclear how DPI are addressing the ongoing imposition of regulatory requirements on retailers without a retail licensing regime in Victoria.

The NECF refers to jurisdiction energy legislation which is included in the term energy laws. Whilst the National Energy Retail Law (NERL) requires many instances of distributors complying with energy laws, there are very few instances where an authorised retailer needs to comply with any remaining jurisdictional arrangements. The businesses query the compliance and enforcement arrangements for any jurisdictional energy legislation which retailers may have to comply with. For example, it would appear that recent regulatory changes that were required for smart metering in Victoria which are not currently in NECF would not be adequately covered.

Imposing regulatory obligations on small scale network operators

Questions

  1. What impact will arise from the imposition of regulatory obligations on small scale network operators?

The ESC recommendations in light of their small scale licensing review and the General Exemptions Order should be reviewed and bought up to date with the current environment.

The ESC recommendations and any new recommendations could be implemented through the Victorian network licensing regime applicable to small scale operators. Enabling a regulatory body to continue the Victorian licensing regime allows the Victorian Government the ability to apply this regime to small scale operators or not and to vary the licenses as required.

Prohibiting cross-ownership between licensed distribution businesses of different types

The Issues Paper notes that the cross ownership provisions in the Electricity Industry Act (EIA) and Gas Industry Act (GIA) are complex and would need oversight by a suitable regulator. On the basis that they do not override or substantially depart from the Competition and Consumer Act and industry has moved to voluntarily disaggregate, DPI query the ongoing need.

Questions

  1. Is there any reason why Victorian-specific cross-ownership restrictions are required in the energy sector after the commencement of the final national frameworks?

The businesses consider that these arrangements in the EIA and GIA were meant to be temporary or transitional in nature. Given that industry has disaggregated, the businesses support the DPI view that they can be repealed as part of the NECF legislative package.

Identifying energy businesses for the purposes of statutory powers of distribution businesses

The Issues Paper notes that network business have access to statutory powers to work on public and private land as this is integral to provision of network services. These powers rely on the businesses being licensed.

Questions

  1. How might businesses that must exercise these statutory powers be identified in the absence of holding a licence?

The businesses support the need to continue an ongoing minimal licensing regime in Victoria for network businesses to provide continuity and investment certainty.

The need to fix the piggy backing arrangement does not arise.

Requiring exit from the distribution sector

The Issues Paper states that it would be extremely unlikely that a regulator would exercise its power to revoke the licence of a large scale distribution business. The impact of removing the licence to operate critical infrastructure would have a severe effect on the community.

The EIA and GIA provide powers for the ESC to appoint administrators if regulatory non compliance threatens the security of energy supply. As the market becomes more national in character, national step in rights may be a more practical intervention scenario.

Questions

  1. In what circumstances might a network business be required to cease operating?
  2. What alternatives are there to appointment of administrators to businesses that are required to exit the energy sector?

Network businesses fund critical infrastructure using significant borrowings. Investor institutions consider that there is value in a distribution licence, stable regulatory environment and returns, and the minimal risk of licence revocation. Investor institutions take the network licence seriously and also the mechanism regarding a potential loss of licence.

The businesses are concerned that any change in this area may impact investor¡¦s views and credit rating agencies views of the regulatory certainty that holding a licence brings to the table. Any adverse impacts or uncertainty in this area could result in lower credit ratings and increased costs of borrowings which is not in the interests of customers.

The businesses stress the importance of ongoing certainty in this area regarding maintaining a Victorian network licence and maintaining Victorian provisions regarding a regulatory body, such as the AER, appointing administrators for regulatory non compliance that threatens the security of energy supply.

Investor institutions take the Victorian network licence seriously and also the mechanism regarding a potential loss of licence. The businesses are concerned that any change in this area may impact investor¡¦s views and credit rating agencies views of the regulatory certainty that holding a licence brings to the table. Any adverse impacts or uncertainty in this area could result in lower credit ratings and increased costs of borrowings which is not in the interests of customers.

Funding regulatory activities related to distribution

Regulatory activities such as administering and enforcing regulatory arrangements need to be funded. Victorian agencies may be funded from industry fees or general revenue whilst the AER are funded by the Commonwealth under the terms of the Australian Energy Market Agreement (AEMA).

Victorian distribution licence fees can be expected to decline and the AER costs will increase as they take over more responsibilities.

Questions

  1. What is the appropriate basis for funding the cost of regulation if the licensing regime is ended or substantially modified to accommodate the national framework?

For example an electricity network licence may only need to consist of the following sections;

  • Grant of a Licence
  • Term
  • Compliance with Victorian specific matters
  • Variation
  • Identification of the distribution area.

A Gas network licence could be similar.

Whilst we recognise that some jurisdictional regulatory provisions will remain, there should not be a significant amount of work for a regulatory body to administer and enforce the obligations. Any ongoing costs to manage the remaining Victorian regulatory functions should decrease significantly.

The businesses are supportive of the AER managing the ongoing network licence framework. Given that the AER is funded by the Commonwealth, there should be no need for ongoing licence fees to be paid to the ESC or to the AER.

If there were a need to pay any licence fee to the AER for the Victorian functions, then given the significantly reduced Victorian framework, any licence costs would be expected to be significantly lower than those currently paid with the same cost pass through arrangements remaining.

The costs of a regulatory body managing a small network licensing regime should be minimal.

Determining the Policy response

The Issues Paper notes 4 main options which may provide a suitable framework for the future, these are;

  1. 1. Open system (at State level), where no further authorisation or licensing requirement is imposed on the generation, transmission and distribution sectors at the State level, leaving this entirely to the national frameworks.
  2. Continue licensing, where no change to the current licensing frameworks is made, but redundant regulatory arrangements are rescinded.
  3. Move to statutes, where authorisation becomes a matter of statutory nomination and obligations are spelled out in statutory frameworks.
  4. Inverted licensing, where licensing requirements are ¡¥inverted¡¦ to exempt major energy companies from licensing requirements, but subjecting small (currently exempt) entities to a requirement to obtain an appropriate licence.

Combinations of these alternatives are also possible.

Questions

  1. Do any implications arise from shifts from regulatory to statutory requirements?
  2. Do any implications arise from the absence or replacement of a licensing regime?
  3. Are there relevant considerations for Government regarding the body that grants and revokes an energy authorisation? (e.g. the ESC, the AER, AEMO, the Minister for Energy or the Governor-in-Council?).
  4. Can national concepts of authorisation and registration under the NEL, NGL and NERL be relied upon to underpin Victorian statutory obligations and powers, or should nomination, registration and/or authorisation be performed under a Victorian scheme?
  5. On what basis might a person be granted (or refused) such authorisation?

14. Do any implications arise from shifts from regulatory to statutory requirements?

The Issues Paper states that if the current Victorian licensing arrangements were to be adopted, many functions would be removed in deference of the national framework. There would be no significant implementation issues in managing a slim line, minimalist licensing regime in Victoria.

The Issues Paper notes that a suitable body would need to be nominated for continued administration of the regime. Future changes to the slim line licence should be minimal. The businesses support the continuation of the current framework where licences can be easily located on a regulator¡¦s website.  In addition the licences are relatively easy to amend to accommodate changes in the network such as gas extension projects.

If aspects of the NECF such as local area retailer are assigned by a jurisdiction and linked to a distribution licence then there are benefits in having transparency of the licence and postcodes or streetnames that delineate network boundaries. Generally the regulatory processes that manage changes to Victorian instruments provide open and transparent consultation processes for all stakeholders.

The businesses strongly prefer this approach for administrative matters rather than to Orders or Gazettes made by government where these arrangements may be nominated without formal consultation processes. In addition, these processes provide far less transparency of history and are difficult for industry stakeholders to locate.

The businesses support the need to continue an ongoing minimal licensing regime in Victoria for network businesses. This is the most efficient solution whilst providing regulatory continuity and investment certainty. The suggested reduction in regulatory burden with a statutory authorisations regime is illusory ¡V the authorisation regime for retailers under the NECF contains all the same features of a licensing regime.

15 Do any implications arise from the absence or replacement of a licensing regime?

The businesses are funded by a number of debt instruments. These debt instruments are based on the network business having a licence and regulatory arrangements in place which offer some level of certainty that the debt will be repaid. Investors and ratings agencies take our licence seriously, they consider the licence and definition of a distribution area as well as the revocation processes.

If the licence regime were replaced then statutory arrangements would need to provide this same level of comfort regarding the security of the investment to the banks and institutions.

Given some form of Victorian regulatory obligations will remain, an open regime is not a real option as change and enforcement of statutory obligations would be unwieldy. Moreover, enforcement of remaining Victorian obligations would be cumbersome.

The Issues Paper provides no real advantage or arguments as to why there is a benefit in moving to a statutory licensing arrangement. A suitable body is required to manage a registration or nomination regime under the statutory regime. The table suggests some reduction in regulatory burden but this is illusory ¡V the authorisation regime for retailers under the NECF contains all the same features of a licensing regime.

There is no compelling reason to move away from the current Victorian licensing regime, especially if the regulatory authority is the AER. We consider that the Government should not create additional uncertainty and cost that would be associated with any move away from continuing the network licensing regime.

16 Are there relevant considerations for Government regarding the body that grants and revokes an energy authorisation? (e.g. the ESC, the AER, AEMO, the Minister for Energy or the Governor-in-Council?).

The businesses favour a regulatory body to undertake this role in preference to the other suggestions provided in the Issues Paper. Given the move to national arrangements, the businesses consider that the AER is best placed with the technical and administrative capability to take on this role.

The businesses suggest the Victorian licensing regime be dealt with in the Application Act for the NECF.

17 Can national concepts of authorisation and registration under the NEL, NGL and NERL be relied upon to underpin Victorian statutory obligations and powers, or should nomination, registration and/or authorisation be performed under a Victorian scheme?

The businesses consider the suggested benefit in moving to a statutory scheme, by way of reduced regulatory burden compared with a licensing regime, to be illusory if the regulator is the AER.

The businesses suggest the Victorian licensing regime be dealt with in the Application Act for the NECF.

18 On what basis might a person be granted (or refused) such authorisation?

There is no need to alter the Victorian distribution entry criteria for large scale distribution. As noted earlier, for small scale distribution further consideration and consultation is required.

What is the efficient way forward?

The Issues Paper canvassed three distinct issues regarding enforcement of obligations in a new regime;

  • Who is to enforce and whether the enforcement body has exclusive powers?
  • Where and how to enforce (eg VCAT, courts etc)?
  • What is to be enforced?

The paper canvasses the four options below - whether the licensing regime is retained or replaced and whether the enforcements is done jurisdictionally or though the national framework.

Retain functions with Victorian regulator(s).

Transfer to national regulator.

Retain licensing regime

(1) Maintain status quo. ESC or another designated body would continue to licence & enforce any related licence conditions.

(2) Licensing & associated enforcement function would be conferred on AER (with agreement of MCE).

Replace licensing regime (with statutory regime, etc).

(3) New statutory framework would be developed with designated enforcement regime & bod(ies).

(4) Regulatory requirements would be made part of the national framework through NERVB, and enforcement functions conferred on AER (with agreement of MCE).

The Issues Paper considers that there are substantial advantages with a single regulator responsible for all energy industry regulatory enforcement action in Victoria and hence favours option 2 or 4.

Questions

  1. Are there material costs from the duplication of an authorisation function in the Victorian and national frameworks?
  2. What Victorian regulatory arrangements ¡V that are not covered by the future national frameworks ¡V require substantial regulatory oversight?
  3. What is the most appropriate and effective enforcement regime for Victoria-specific regulatory arrangements?
  4. When and where should customers have the right to take enforcement action?
  5. Which body is best placed to oversee Victoria-specific regulatory arrangements?
  6. Should Victoria reform small scale licensing activities in concert with the implementation of the NECF?
  7. What Victorian regulatory arrangements ¡V that are not covered by the future national frameworks ¡V require substantial regulatory oversight?

19 Are there material costs from the duplication of an authorisation function in the Victorian and national frameworks?

The businesses favour a Victorian licensing framework administered by the AER. This is the most efficient solution whilst providing regulatory continuity and investment certainty.

20 What Victorian regulatory arrangements ¡V that are not covered by the future national frameworks ¡V require substantial regulatory oversight?

Without being privy to the DPI detailed gap analysis this is a difficult question to answer. The businesses acknowledge, in principle, some existing regulatory provisions will be required. We anticipate further consultation on the detail.

There has been minimal regulatory oversight of the Victorian specific regulatory arrangements that are in place today. There has been some monitoring of services and compliance activities which have been performed by the AER acting in the ESC enforcement role until the start of this year. There has also been some development of the regulatory framework for smart metering customer protections and for feed in tariff initiatives. Once these types of requirements are established, they should not require substantial oversight.

Further once the duplication in the Victorian regulatory arrangements is removed then the regulatory oversight requirement is likely to be minimal.

The retention of statutory powers is required.

21 What is the most appropriate and effective enforcement regime for Victoria-specific regulatory arrangements?

The Issues Paper notes that licensing and enforcement powers can be conferred on the AER as a jurisdictional specific set of functions, as allowed by the AEMA with the consent of the MCE.

The businesses support this as an appropriate arrangement and consider that it would have very little additional costs.

22 When and where should customers have the right to take enforcement action?

The current Victorian framework requires the business to be part of an ombudsman scheme. Some form of jurisdictional ombudsman scheme will remain with the ombudsman also presiding over the NECF customer complaints process.

These are appropriate arrangements for customer redress and have been proven adequate. With proper regulatory powers in the AER, no further direct customer enforcement rights could be justified as providing benefits that would outweigh the costs.

Looking at the type of regulatory obligations that might remain, as set out in section 3.1.2, direct customer enforcement is inappropriate.

The enforcement issues around a statutory regime, including the wholly inappropriate police role, are enough to dismiss this option. How could the costs of a stand alone set of civil penalties and remedies and stand alone enforcement body be justified as providing benefits that would outweigh the costs?

Providing a seamless arrangement for customer complaints regardless of whether the issue is NECF or jurisdictionally related would provide an effective framework.

23 Which body is best placed to oversee Victoria-specific regulatory arrangements?

The national reform process has established the Australian Energy Market Commission (AEMC) as the national rule maker and the AER as the national economic regulator. As a general statement, the businesses support that the remaining regulatory arrangements for Victoria should be managed by the national rule maker as opposed to straying from the benefits of the national reform. This was a deliberate decision by the MCE rather than having the economic regulator in charge of the rules and the enforcement of those rules which is a lack of segregation.

The businesses suggest a model akin to metrology arrangements where certain jurisdictional aspects of small customer metering are able to be governed in a national instrument. The Australian Energy Market Operator (AEMO) are advised of the jurisdictional variations by the Minister (and subject to MCE agreement) these changes are able to be catered for as tables of differences in the national instruments. The AEMO Consumer Administration and Transfer Solution (CATS) procedures operate in a fairly similar manner.

The DPI gap analysis document would be useful to assess the types of issues which are seen as needing to remain because the management of remaining Victorian obligations may be best assessed on a case by case basis. The examples we have provided below illustrate that there is not a one size fits all approach.

The businesses consider that GSLs and GSL exemption threshold and processes currently in the Electricity Distribution Code are intimately linked to the AER pricing determinations and may be best managed by the AER in these pricing processes.

Smart metering customer protections and arrangements, while sensitive to the arrangements in Victoria, may be best managed by the AEMC with a view that potentially longer term they move from a Victorian regulatory instrument into the NECF. The businesses are not wishing to impose Victorian smart meter customer protections on other jurisdictions, rather it would be useful to include the Victorian arrangements in the most relevant national instrument over time (like, as a model, the metrology arrangements mentioned above). By adopting this approach, this allows all jurisdictional differences to be defined and located together.

The gap analysis and remaining regulatory requirements may provide clarity on whether the Government wishes to hold the customer protections closer to Victoria to allow jurisdictional differences or whether there may be benefit in moving these to the AEMC. If the AEMC were to manage the remaining jurisdictional regulatory requirements, then these jurisdictional differences may be more easily aligned over time to consistent national arrangements.

Unaccounted for gas is currently regulated in the Gas Distribution Code and there are heads of power established for unaccounted for gas in the retail market procedures. Again, where there are financial impacts intimately related to access arrangements, the businesses consider that the AER should decide the incentives (benchmark/price risk, measurement) and the procedure becomes a matter of administering the process in line with the AER determination.

Similarly, there is a move in the gas market to consolidate the various metering arrangements across instruments into the retail market procedures. Whilst we are generally supportive of this approach, matters that impact metering type/cost, accuracy and competition should be managed by the rule maker, the AEMC and matters of an administrative or lower order nature should be covered in procedures managed by AEMO.

Even if the Government is not attracted to some Victorian matters being housed as Victorian variations within national instruments, subject to approval of the MCE, the businesses strongly urge the Government to place obligations that are related to service delivery and access matters (eg GSLs and UaFG) with the AER.

As a general statement, the businesses support that the remaining regulatory arrangements for Victoria should be managed by the national rule maker as opposed to straying from the benefits of the national reform.

The DPI gap analysis document would be useful to assess the types of issues which are seen as needing to remain. The businesses recognise that this may be best assessed on a case by case basis.
It would be beneficial to include the Victorian arrangements in the most relevant national instrument over time as Victorian requirements. By adopting this approach, this allows all jurisdictional differences to be defined and located together and potentially aligned over time.

Even if the Government is not attracted to some Victorian matters being housed as Victorian variations within national instruments, subject to approval of the MCE, the businesses strongly urge the Government to place obligations that are related to service delivery and access matters (eg GSLs and UaFG) with the AER.

24 Should Victoria reform small scale licensing activities in concert with the implementation of the NECF?

The businesses note that the AER will be consulting in this area shortly. The businesses also recognise that this area is likely to become more complex over time and we are keen to ensure that our role is clearly defined and limited to matters which we can control.

25 What Victorian regulatory arrangements ¡V that are not covered by the future national frameworks ¡V require substantial regulatory oversight?

Refer to our response to Question 20.

Transitional Arrangements

Questions

  1. What impacts arise from abolishing licences if licensing arrangements are to be reformed?
  2. Are there any other transitional issues that DPI should be aware of?

The impacts of abolishing the licensing arrangements have been covered in our response to Q15.

The businesses have no further comment in relation to Q26 at this stage. The businesses note that many of the responses on the remaining regulatory framework could have been informed by the DPI gap analysis work and the consequential issues paper. The businesses look forward to working with DPI on these matters over the next few months and considering our responses to this submission in light of this further information as the Victorian regulatory framework is being developed.