Submission: AEMC Electricity Network Regulation Review – Package 1, Consultation paper

23 July 2026 

To: The Australian Energy Market Commission (AEMC)
Re: Electricity Network Regulation Review – Package 1, Consultation paper

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input to the AEMC Electricity Network Regulation Review – Package 1.

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

IEEFA’s view, set out in our 2024 report Reforming the economic regulation of Australian electricity distribution networks, is that Australian distribution network economic regulation needs a first-principles review that examines all aspects of the regulatory regime together, including contestability, ring-fencing, cost allocation and network returns. The AEMC’s decision to structure this work as Package 1 (service classification and ring-fencing) followed by Package 2 (expenditure efficiency, incentives and returns) is a reasonable administrative sequencing, particularly given the two rule changes from Energy Networks Australia (ENA) and Nexa Advisory that are relevant to Package 1. However, IEEFA considers that the two packages address economically interdependent questions and should feed into one another. Because they are being run separately, Package 1’s service classification decisions are being made without a directly relevant piece of evidence: whether a network service provider (NSP) proposing expanded regulated scope has (or should have) a demonstrated incentive to do so. 

Kind regards,

Johanna Bowyer, Lead Analyst, Australian Electricity