Terms of Reference

Inquiry into the performance and management of electricity network companies

On 2 October 2014, the Senate agreed that the following matter be referred to the Environment and Communications References Committee for inquiry and report by the first sitting day in March 2015:

(a) the manner in which electricity network companies have presented information to the Australian Energy Regulator (AER), and whether they have misled the AER in relation to:

    (i)    their weighted average costs of capital, 

    (ii)    the necessity for the infrastructure proposed,

    (iii)    their regulated asset valuations, and

    (iv)    actual interests rates claimed against actual borrowing costs;

(b)    how electricity companies, including state government owned electricity companies such as Energex, have calculated the weighted average cost of capital and how this measure has changed over time;

(c)    where anomalies are identified in relation to price structuring or allegations of price rorting by electricity companies, such as Energex, are raised, the possibility of these matters being investigated by a national independent body created by the Federal Government with the required powers and reach to investigate and prosecute, where necessary;

(d)    to ascertain whether state-owned network companies have prioritised their focus on future privatisation proceeds above the interests of energy users;

(e)    whether the arrangements for the regulation of the cost of capital are delivering allowed rates of return above the actual cost of capital;

(f)    whether the AER has actively pursued lowest-cost outcomes for energy consumers;

(g)    whether network monopolies should have the right to recover historic overspending that has delivered unwanted and unused infrastructure;

(h)    how the regulatory structure and system could be improved;

(i)    whether the arrangements for the connection and pricing of network services is discriminating against households and businesses that are involved in their own electricity production;

(j)    whether the current system provides adequate oversight of electricity network companies; and

(k)    any other related matter.

Committee Secretariat contact:

Committee Secretary
Senate Standing Committees on Environment and Communications
PO Box 6100
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 3526
Fax: +61 2 6277 5818