The electricity supply chain can be thought of as comprising three distinct sectors. Generators produce electricity, electricity is transported through transmission and distribution networks to downstream electricity users. Large users and energy retailers organise electricity contracts and on-sell electricity to consumers. Generators and retailers are able to buy and sell electricity in the Wholesale Electricity Market. The ERA has several regulatory functions applying to one or more of these sectors. The ERA’s role in the electricity supply chain in Western Australia is to:
- approve access arrangements for Western Power’s electricity transmission and distribution networks. An access arrangement sets out the prices, terms and conditions that a network owner can charge companies to use its infrastructure.
- administer the licensing regime. This involves issuing licences to entities generating, transmitting, distributing or retailing electricity, monitoring and enforcing compliance with licence conditions and approving customer protection measures.
- monitor the behaviour of participants in the wholesale electricity market (where retailers buy electricity from generators) to make sure that they are following the market rules and report to the Minister for Energy about the effectiveness of the market.
The ERA plays no role in setting retail electricity and gas prices, which are set by Government.