2nd Oct 2014, 12:11 PM – Senate Motions — Electricity Network Companies

Summary

Senator Milne’s motion calls for an independent body to be appointed by the Federal Government to investigate electricity network prices, and also investigate whether homes and businesses with rooftop solar are being financially disadvantaged by network companies.

This inquiry will uncover whether this infrastructure was really needed or whether the system is being used by electricity companies as a money spinner.

Text of motion

Referred to the Environment and Communications References Committee for inquiry and report by March 2015:

(a) the manner in which electricity network companies have presented information to the Australian Energy Regulator (AER), and whether they have misled the AER in relation to:

• (i) their weighted average costs of capital,
• (ii) the necessity for the infrastructure proposed,
• (iii) their regulated asset valuations, and
• (iv) actual interest rates claimed against actual borrowing costs;

(b) How electricity companies including State Government owned electricity companies such as Energex have calculated the weighted average cost of capital and how this measure has changed over time;

(c) Where anomalies are identified in relation to price structuring or allegations of price rorting by electricity companies including State Government owned electricity companies such as Energex are raised, that these matters are investigated by a national independent body created by the Federal Government with the required powers and reach to investigate and prosecute where necessary;

(d) to ascertain whether state-owned network companies have prioritised their focus on future privatisation proceeds above the interests of energy users;

(e) whether the arrangements for the regulation of the cost of capital are delivering allowed rates of return above the actual cost of capital;

(f) whether the AER has actively pursued lowest-cost outcomes for energy consumers;

(g) whether network monopolies should have the right to recover historic overspending that has delivered unwanted and unused infrastructure;

(h) how the regulatory structure and system could be improved;

• (i) whether the arrangements for the connection and pricing of network services is discriminating against households and businesses that are involved in their own electricity production;

(j) whether the current system provides adequate oversight of electricity network companies; and

(k) any other related matter.