Electricity Market Review – Phase 2

The former Public Utilities Office undertook a review of the electricity market in the south west of the State. The review was undertaken in two phases.
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Phase 1 of the Electricity Market Review identified an urgent need for industry and market reform in the electricity sector to address a problem of high and increasing costs of electricity services. Phase 2 of the Electricity Market Review was launched on 24 March 2015.

The reform projects under Phase 2 can be categorised as follows: Network Regulation, Market Competition, Institutional Arrangements and Wholesale Electricity Market Improvements. 

  1. Network Regulation
    Examination of the transfer of regulation of the Western Power network including price, connection and access, from the Western Australian regime to be regulated under the National Electricity Law and Relevant National Electricity Rules.
  2. Market Competition
    Consideration of reforms to enhance market competitive outcomes through full retail contestability and the removal of barriers to entry in the retail and wholesale market.
  3. Institutional Arrangements
    Transfer of system management functions and market operation functions to the Australian Energy Market Operator, creation of a new market rule change committee, establishing a Western Australian reliability panel, investigating the merits of replacing the five Market Objectives with the singular National Electricity Objective, and replacing Western Australian Energy Disputes Arbitrator and Western Australian Energy Disputes Board with more cost-efficient dispute resolution bodies and procedures.
  4. Wholesale Electricity Market Improvements
    Reforms to the Reserve Capacity Mechanism to address the manner in which the capacity price and volume is determined; and reforms to existing energy market operations and processes.

Governance

The Steering Committee appointed to oversee Phase 2 consisted of Ray Challen (Chair), David Swift, Michael Court, Lyndon Rowe, Paul Evans, Steve Wood and Seán McGoldrick.

The Steering Committee was supported by a Project Office based within the former Public Utilities Office.