Improving Institutional Performance

Australia's energy markets are facing significant disruptions and the structures governing them must be flexible enough to adapt to new challenges. Delivering the best outcomes for energy consumers requires clearly specified and stable policies, appropriate regulations, the delegation of some roles to specialist institutions, suitably qualified and experienced institutional managers, and institutional separation.

Review of Governance Arrangements

The final report of the Review of Governance Arrangements for Australian Energy Markets, which was commissioned by the Energy Council, was released in October 2015. The report concluded that the current arrangements are fundamentally sound but also identified opportunities to improve the transparency, timeliness, resources, and clarity of function and purpose of energy market governance arrangements that will increase confidence in energy market policy and decision making.

The COAG Energy Council welcomed the final report and released its response in December 2015. The Council’s Senior Committee of Officials has agreed an implementation plan to deliver the Council’s response to the Governance Review.

The Governance Review Implementation Plan (GRIP) breaks up the agreed responses into eight projects, with differing priority levels. The three key projects currently underway are the reforming of Council operations, improving AEMC processes, and the proposed separation of the AER from the Australian Competition and Consumer Commission (ACCC). All of these initiatives are aimed at improving institutional performance.

The COAG Energy Council’s response and the GRIP can be found here.

Statements of Expectations for the AEMC and AER

In 2013, the Council agreed to an accountability and performance framework for the AEMC and the AER, consisting of:

  • Statement of Expectations developed by the Council
  • Statement of Intent to be developed by the AEMC and AER respectively.

For more on this project, click here.