The ERA is an independent statutory authority established by the Parliament of Western Australia. Our purpose is to benefit the WA community by promoting an efficient and customer focused economy. We aim to achieve this purpose through the range of regulatory functions that we perform. We also provide advice to the government on important economic issues.
The ERA has a range of regulatory functions related to energy. These include: issuing licenses to gas and electricity companies, monitoring licensees’ compliance with their licence, monitoring the electricity and retail gas market, and determining access to certain energy networks. We are also responsible for administering some of the regulatory instruments covering customer protection and energy network access.
In addition to our regulatory role, we can be requested by the State Treasurer to inquire into and provide advice on matters related to energy, such as what the retail price of energy should be.
We are responsible for administering the energy licensing scheme, including issuing and amending energy licences. We also monitor and report to the Minister for Energy on the operation of the energy licensing scheme.
We do this by arranging for independent auditors to perform periodic compliance audits of the licensees and, for the licensees that operate supply infrastructure, asset management system effectiveness reviews.
If a licensee fails to meet performance criteria or other conditions of its licence we must report this to the Minister and may enforce compliance through a range of mechanisms set out in legislation.
There are three regulatory instruments that set the service standards electricity and gas licensees must comply with. These are the:
These instruments deal with issues such as marketing, billing and payments, assistance for customers in financial hardship, complaints, the provision of information to customers and other matters.
The Electricity Code and Gas Marketing Code must be reviewed at least once every two years.
We are also responsible for approving the standard form contract of licensees who supply energy to small use customers (who use less than 1TJ of gas or 160MWh of electricity per year).
Monitoring the Western Australian Wholesale Electricity Market
Electricity generators and retailers can buy and sell electricity on the Western Australian Wholesale Electricity Market
(WEM). We monitor this market to ensure that companies are not manipulating prices or taking advantage of the market rules in an unintended manner that is detrimental to competition. If the market is not working effectively, market participants may earn unreasonably large profits, which would ultimately result in consumers paying more for electricity.
We also provide a report each year to the Minister for Energy on how effectively the WEM is operating. The report highlights any concerns about parts of the market that may need to be improved.
Access Determinations for Energy Networks
We approve the terms and conditions that gas pipeline owners/operators and Western Power can offer companies wanting to use their infrastructure.
Reasonable terms and conditions for “access” to a gas pipeline or electricity network are important, as they enable retailers to transport the energy they purchase from gas or electricity suppliers to customers. While parties can negotiate other arrangements, an access arrangement sets the price and basic terms and conditions for a typical service that would be sought.
The terms and conditions for “access” define the benchmark price and basic terms and conditions that parties can fall back on if they are unable to negotiate.
The Government sets the retail costs of electricity and gas prices paid by household and business customers. A component of the total retail energy costs is made up of the transportation costs of energy (the network transmission and distribution tariffs determined by us).
Gas Retail Market Oversight
The gas market in WA is contestable, which means that customers are able to choose their gas retailer if there is more than one provider in their area. We are responsible for overseeing the rules in the gas retail market to ensure customers are protected should they choose to switch their supplier.
The government sets the retail energy prices (the prices paid by household and regulated business consumers for electricity and gas). However, through our advisory role we can provide advice to the government on important economic issues in relation to electricity and gas. For example, the government has in the past asked us to investigate and provide advice on the efficient level of tariffs for Horizon Power and Synergy.