electricity industry framework

The electricity industry regulatory framework is highly complex. The electricity distributors and retailers are regulated by the Essential Services Commission of Victoria (ESC). The ESC is the independent economic regulator established by the State Government of Victoria to regulate prescribed and certain excluded essential utility services supplied by the electricity industry. In addition to the state regulations, the industry is also regulated at a national level by the Australian Energy Regulator (AER).

National Reform of the electricity and gas frameworks is being progressed by State and Federal Governments. The regulation of generation, transmission, distribution and retail companies are expected to be regulated by Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER) from 1 January 2007. Distributors such as United Energy Distribution are required to provide open access to their networks to facilitate competition in generation, retailing and network augmentation. As such, distributors are subject to, licences, codes and guidelines issued by the ESC.

In particular, distribution prices are regulated by the ESC via its pricing determinations which apply for 5 year periods. The ESC also sets minimum service performance standards with which distributors must comply.

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