Not so smooth: assessing outcome against intent

PIAC’s view is that the AEMC’s assessment criteria do not support a proper assessment of the networks’ derogation proposal. The focus should be to consider whether the likely effect of the proposed derogation would be to increase the amount of revenue that could be recovered in the absence of the derogation, regardless of the final adjustment amount. The assessment criteria currently proposed by the AEMC are too narrow to properly accommodate consideration of consumer impacts and efficiency. Once more appropriate criteria are set, stakeholders and the AEMC can undertake a more useful analysis of the proposal and get a better picture of the impact on consumers. PIAC makes some key recommendations to the AEMC on the basis of economic analysis PIAC commissioned from Sapere Research Group.