# **3.5.3. Australia**

NECA fulfills many of the tasks of an independent market monitor for the Australian electricity market. It periodically prepares market analysis reports that are released to the market using data on bids, schedules and output levels released by the National Electricity Market Management Company (NEMMCO) on its web-site that day after the market operates. Although NECA’s authority as the National Electricity Code administrator comes from the ACCC, NECA satisfies the independence criteria described above. Australia also has a number of other market monitoring entities. The Australian Bureau of Agricultural and Resource Economics (ABARE) is a government economic research agency noted for its independent research and analysis. It periodically prepares reports and analyses of Australian energy markets, including electricity. The National Competition Council was established by all Australian governments in November 1995 to act as a policy advisory body to oversee the implementation of National Competition Policy (NCP). It oversees competition policy as it is applied to the electricity industry. The Productivity Commission, the Australian Government's principal review and advisory body on microeconomic policy and regulation, conducts public inquiries and research into a broad range of economic and social issues including: competition policy, productivity, the environment, economic infrastructure, labor markets, trade and assistance, structural adjustment and microeconomic reform. It has also been an active participant in the Australian electricity reform process. The public availability of wholesale market data has allowed each of these entities to provide an informed perspective on conditions in the NEM to the ACCC and public at large.

# **4. Conclusions**

One positive outcome from the California electricity crisis is that a market monitoring process is currently being put in place throughout the US to ensure that such a sequence of events will not occur again. Although there are still problems with interested parties gaining access to data from the wholesale market to perform the necessary analyses, FERC is currently working to put in place a market monitoring process that is forward-looking, fully integrated with and supported by its regulatory process, uses consistent measures of market performance and relies on independent market monitoring entities at the wholesale market level.

The Australian market provides an instructive example of the necessary foundation for a very effective market monitoring process: (1) rapid public disclosure of all relevant market data, and (2) the availability of entities with the time, expertise and legal mandate to prepare reports on market performance using this data. As I have emphasized previously, market monitoring is fundamentally about providing smart sunshine regulation (Wolak, 2004). Providing state-of-the-art analysis with the best possible data, and making this information available to the relevant regulatory authority is a necessary condition for effective market monitoring.

As the experience of the California ISO DMA and MSC during the period June 2000 to June 2001 illustrates, an additional necessary condition is that the regulatory 18