A performance audit to determine whether the Australian Energy Regulator (AER) is effectively regulating the National Energy Market has found the Regulator to be only partly effective.
In his report, Regulation of the National Energy Market, Auditor-General Grant Hehir said the AER had only partially appropriate governance arrangements to oversight its NEM regulatory responsibilities.
“At the time of the audit, the AER was implementing a range of recommendations from previous reviews aimed at improving its governance, management and risk approaches,” Mr Hehir said.
“The AER has not established a performance monitoring, measurement and reporting framework that enables it to clearly demonstrate its effectiveness in regulating energy markets,” he said.
Mr Hehir said AER was not able to demonstrate that the Energy Made Easy energy price comparator website had been effective or represented value for money.
He said AER had been partially effective in identifying compliance risks, however the basis for, and effectiveness of its annual compliance priorities was not clear.
“The AER has been partially effective in identifying and resolving non-compliance through education, compliance monitoring and enforcement activities,” the Auditor-General said.
“While many individual education activities sought to address non-compliance, the absence of an education strategy and evaluation framework made it difficult for the AER to demonstrate that its approach was effective.”
Mr Hehir made six recommendations relating to risk management; performance measurement; tools to support assessment processes; an information framework for compliance activities; and decision frameworks to streamline enforcement approaches.
His report can be accessed at this PS News link and the 116-page printed report at this link.
The audit team was Tracey Martin, Nathaniel Loorham, Chay Kulatunge, David Willis, David Van Schoten, Supriya Benjamin and Andrew Morris.
