Energy generation and distribution

Industry Commission inquiry report

Signed 17 / 05 / 1991

The Industry Commission inquiry report contains the findings of the Industry Commission's public inquiry.

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Volume 1 contents
Volume 2 contents
Volume 3 contents

Preliminaries
Cover, Copyright, Signing page, Acknowledgement, Structure of the report, Preface, Terms of reference

A corporatisation model for public utilities
Relationship with government
Fairer competition

Regulation of private utilities
Market power
Franchise terms and conditions
Trade in natural gas

The benefits of administrative reform
Productive efficiency
Pricing efficiency
Local management and energy conservation

Going beyone administrative reform: the need for structural change

Promoting competition in the electricity industry

Promoting competition in the natural gas industry

Ownership

Review

Recommendations
Schedule 1: Promotion of competition in the electricity supply industry
Schedule 2: Promotion of competition in the natural gas supply industry
Schedule 3: Corporatisation of public utilities
Schedule 4: Regulatory change to private utilities
Schedule 5: Sale of publicly owned assets
Schedule 6: Other initiatives to increase efficiency

Preliminaries
Cover, Copyright, Signing Page, Contents, Major abbreviations used in this report, Glossary

PART I - BACKGROUND INFORMATION

1 Introduction
1.1 The reference
1.2 The Commission's approach
1.3 Inquiry procedures
1.4 Structure of the report

2 Key features of the electricity and natural gas supply industries
2.1 Industry size
2.2 Ownership and structure
2.3 Linkages with other sectors of the economy
2.4 Regulatory framework

PART II - EXISTING AND POTENTIAL PERFORMANCE

3 The economic performance of the electricity and natural gas supply industries
3.1 Basis for assessing performance
3.2 Recent performance
3.3 Initiatives for improving performance
3.4 The scope for improvement

4 The economic benefits of improving performance
4.1 Reforms considered
4.2 Specifications of the ORANI model
4.3 Results
4.4 Summary

PART III - FUTURE DIRECTIONS FOR REFORM

5 A corporate model for public utilities
5.1 Rationale underpinning corporatisation
5.2 Relationship with government
5.3 Competitive neutrality
5.4 Complementary initiatives
5.5 Summary of proposals

6 Regulation of private utilities
6.1 Regulation to control the use of market power
6.2 Regulation of gas transmission and distribution tariffs
6.3 Franchise terms and conditions
6.4 Trade in natural gas
6.5 Summary of proposals

7 Structural changes to promote competition
7.1 The benefit of promoting competition
7.2 Practical concerns
7.3 Promoting competition in the electricity industry
7.4 Promoting competition in the natural gas industry
7.5 Summary of proposals

8 The question of ownership
8.1 The case for public ownership
8.2 Does it matter if governments retain ownership?
8.3 Realising the potential gains from the transfer of ownership
8.4 Alternative ownership structures
8.5 Summary of proposals

9 Pricing
9.1 Introduction
9.2 Current pricing practices
9.3 Short term pricing strategies
9.4 Longer term pricing strategies
9.5 Summary of proposals

10 Load management and energy conservation
10.1 Least cost planning
10.2 Role of users, utilities and governments in load management and energy conservation
10.3 Institutional impediments and / or market failures
10.4 Summary of proposals

References

Preliminaries
Cover, Copyright, Contents

1 Terms of reference and conduct of the inquiry
1.1 Terms of reference and Treasurer's press release
1.2 Conduct of the inquiry

2 Industry structure and markets
2.1 Introduction
2.2 Electricity, gas and the energy market
2.3 Future energy developments
2.4 Key features of the electricity and natural gas supply industries

3 Current legislative and regulatory frameworks
3.1 The electricity supply industry
3.2 The natural gas industry

4 Recent initiatives by governments / authorities to improve the efficiency of the electricity and gas supply industries
4.1 Commonwealth
4.2 New South Wales;
4.3 Victoria;
4.4 Queensland;
4.5 South Australia;
4.6 Western Australia;
4.7 Tasmania;
4.8 Northern Territory;
4.9 Australian Capital Territory

5 Community service obligations
5.1 What are CSO's
5.2 CSO's in the electricity and gas industries
5.3 The economic effects of alternative funding approaches
5.4 The rationale for existing CSO's
5.5 Summary

6 Electricity and gas interconnections
6.1 Introduction
6.2 Electricity
6.3 Gas

7 Cogeneration
7.1 Introduction
7.2 What is cogeneration?
7.3 Promoting competition
7.4 The economics of cogeneration
7.5 Cogeneration potential in Australia
7.6 Impediments to the development of cogeneration

8 Intergovernmental relations
8.1 Introduction
8.2 Taxation
8.3 Australian Loan Council
8.4 Commonwealth Grants Commission
8.5 Transitional arrangements

9 Reform initiaves in selected overseas countries
9.1 Introduction
9.2 Overview of international trends in energy industries
9.3 The electricity and gas supply industries in selected countries

10 Electricity pooling and coordination arrangements
10.1 Introduction
10.2 Pooling and coordination transactions
10.3 Alternative pooling and coordination arrangements

11 Profile of current environmental policies and programs
11.1 Introduction
11.2 Infrastructure planning requirements
11.3 Rehabilitation requirements
11.4 Emission and discharge controls
11.5 Energy conservation
11.6 Renewable energy projects

12 Demand side management
12.1 Introduction
12.2 Demand side management - what is it?
12.3 Potential savings from demand side management
12.4 Role of users, utilities and governments in demand side management
12.5 Institutional impediments and / or market failures
12.6 Summary