Economic Future Priorities During 2011-12, the Commission’s regulatory activities included: the that took effect from 1 July 2012; performing licensing functions including the assessment of license suitability and granting of a retail electricity license to ERM Retail and an Independent Power Producer license to TKLN Pty Ltd, as well as monitoring of licence compliance; publishing the 2010-11 Power System Review which reports on the trends in adequacy and security of the Territory’s power system; developing and publishing a Guaranteed Service (GSL) Code which sets out arrangements for payments by an electricity network service provider to small customers who have received a very poor level of service; implementing an Electricity Retail Supply Code to codify arrangements necessary to support effective business to business interactions and to provide appropriate customer protection (including consultation with industry participants on the operation of the new Code); developing and commencing consultation on a new Electricity Standards of Service Code; commencing consultation on the 2014 Network Determination process; and providing information to customers and market participants on the Territory electricity market and regulatory arrangements. The Commission’s priorities for 2012-13 include: working with Government, relevant government agencies and industry participants to progress the findings and recommendations from the Commission’s Priority Work Program reviews and ensure the Territory has a clear regulatory framework, through the development of an Electricity Industry Code, for the Territory electricity market that conforms with good industry practice in terms of the electricity market reforms and economic regulation; continuing the 2014 Network Determination process and monitoring the network price regulation arrangements to apply from 1 July 2014; continuing to focus on regulatory and technical compliance of electricity industry participants, including monitoring the progress of licensees in establishing and maintaining their compliance processes in accordance with the appropriate Australian Standards; developing the scope and structure of the Power System Review through increased interaction with industry participants, technical advisors and advice from other regulators with the objective of publishing a more robust system planning report, consistent with those published for the NEM, and able to be used for assessing the supply-demand balance and investment needs of the Territory’s electricity industry; and continuing to develop more specific and detailed regulatory arrangements to facilitate retail contestability and the associated electricity retail supply activities.
Chapter 4 Electricity Supply Industry The electricity supply industry in the Territory is regulated by the Electricity Reform Act, Electricity Networks (Third Party Access) Act, Utilities Commission Act and associated legislation. This statutory framework was introduced on 1 April 2000. The statutory framework is primarily focused on regulating the activities of electricity industry participants and customers in the Alice Springs and Tennant Creek power systems – referred to as the market systems. Key elements of the statutory framework are: third-party access to the Darwin-Katherine, Alice Springs and Tennant Creek electricity networks; staged introduction of retail contestability, with all customers becoming contestable from 1 2010; and an independent economic regulator, the Utilities Commission, to regulate monopoly electricity services, licence market participants and enforce regulatory standards for market conduct and service performance. are currently three retailers operating in the market systems – PWC, QEnergy and ERM Retail. In the three market systems, PWC is currently the main electricity generator, with almost 92 per cent of generation capacity. Although there are privately owned generators operating in the Darwin-Katherine and Alice Springs systems and exporting electricity into those systems, these suppliers generate electricity under contract for PWC Generation rather than selling directly to an electricity retailer. PWC Generation provides the fuel used for electricity generation and takes all electricity generated. PWC is also the network service provider and is responsible for system control. The Darwin-Katherine, Alice Springs and Tennant Creek networks are not interconnected, and are separated by long distances. Electricity supply in regional and remote centres of the Territory is mainly managed by the Territory Government and the service provider through a contract for service model. The Commission has limited regulatory functions in regional and remote centres, with the main responsibility being licensing. The Commission has the following functions in the electricity supply industry: to perform licensing functions, granting licences to to undertake electricity generation, electricity networks, system control and retail operations in the Territory; to develop standards of service and supply and to make codes and rules relating to the conduct or operations of the electricity supply industry or individual licensed entities; to monitor, and promote improvement in, standards and conditions of service and supply and the operations of the electricity supply industry and licensed entities; to regulate prices charged by PWC Networks for provision of electricity network services (transport of electricity across the network) and charges
Service The Commission considered that the matters raised by QEnergy and determined that a review of the Retail Supply Code was warranted. In July 2012, the Commission released a consultation paper to facilitate public consultation on the amendments proposed by QEnergy. The Commission extended the scope of the consultation to consider any additional proposed amendments from other stakeholders and other areas of the Retail Supply Code identified by the Commission that may require amendments. Submissions were received from the Northern Territory Major Energy Users (NTMEU), PWC and QEnergy. The NTMEU and QEnergy are supportive of further amendments to the Code, while PWC supports the arrangements as they stand. The Commission intends to release an Options Paper for public consultation in late September 2012, which will detail potential options for amending the Retail Supply Code. The Commission monitors standards and conditions of service and supply and the operations of the electricity supply industry and licensed entities. The Commission may also develop standards of service and supply, authorised by legislation. The Commission publishes an annual Power System Review, reporting on power system performance during the year, and providing an assessment of the adequacy of the power systems to meet forecast demand in the medium term. Regular and comprehensive reporting on power system and distribution network performance and health is a feature of the electricity supply industry throughout Australia. Electricity businesses in other Australian jurisdictions have developed systems and processes for regular and comprehensive reporting of power system and distribution network performance over a period of time. The 2010-11 Review was released in 2012 and continues the increased focus on electricity demand analysis that was commenced in the 2009-10 Review, in order to provide a robust assessment of the adequacy of the power system, including generation, transmission and distribution networks. The Commission engaged Evans & Peck to assist the Commission to prepare the 2010-11 Review, particularly by providing expert advice on power system and reliability performance. For 2010-11, the System Review provided: an assessment of the adequacy of PWC’s forecasts; a review of methodologies used to develop energy and demand forecasts, and provide a view as to the reasonableness of the underlying assumptions; an assessment of the adequacy of electricity generation supplies relative to forecast peak demand and an assessment of fuel supply adequacy for the medium and long term;
Appendix A: Decisions in 2011-12 During 2011-12, the Commission made the following decisions: Decision Type Date of decision Expires Electricity Retail Supply Code PWC – Electricity Network Licence PWC – Electricity Generation Licence Network Access Tariffs Code 11 August 2011 Until revoked or superseded Variation 28 October 2011 To 30 June 2020 Variation 28 October 2011 Until superseded Approval 22 May 2012 1 July 2012 to 30 June 2013 Business to Business Approval 14 December 2011 To 29 Procedures Guaranteed Service Level (GSL) Code 2013 Code 1 January 2012 Until revoked or superseded TKLN Pty Ltd Grant of Independent 24 May 2012 Until superseded Producers Licence ERM Power Retail Pty Ltd of Retail licence 24 May 2012 Until superseded System Control Technical Approval of variation 30 May 2012 Until revoked or superseded