AGL calls for more efficient network regulation to lower costs for consumers

AGL has submitted its response to the Australian Energy Market Commission’s Electricity Network Regulation Review Package 2, outlining reforms aimed at delivering lower costs, more efficient investment and better outcomes for consumers. As Australia's energy transition accelerates, households and businesses are investing in rooftop solar, batteries, electric vehicles and electrification at unprecedented scale. These investments are creating new opportunities to meet network and system needs in ways that are often more flexible and lower cost than traditional infrastructure solutions. Regulation should evolve to ensure customer resources, competitive services and network investments can compete on their merits to deliver the best outcome for consumers.

A key theme of AGL's submission is improving the efficiency and accountability of network investment decisions. Consumers fund network assets over many decades and should be protected from inefficient expenditure. AGL has called for stronger scrutiny of major projects, greater transparency around claimed benefits and enhanced accountability where projects fail to deliver the outcomes consumers are paying for. The submission also proposes reforms to create a more technology-neutral and expenditure-neutral framework. This includes development of a broad UK-style TOTEX model, improved market testing of alternatives and more consistent assessment of network and non-network solutions. These reforms would help ensure the lowest-cost reliable solution is selected, regardless of whether it involves traditional infrastructure, customer resources or competitive services. AGL has also highlighted the importance of allocating risks to the parties best placed to manage them.

Consumers should not bear risks that networks or competitive providers can reasonably control. Better risk allocation can strengthen accountability, improve investment decisions and reduce costs over time. As networks increasingly interact with competitive markets and customer-led energy services, AGL's submission also emphasises the importance of preserving competition and ensuring regulatory decision-making reflects an appropriate mix of expertise. This includes recommending stronger competition capability on the Australian Energy Regulator Board. Across all recommendations, AGL's objective is straightforward: to ensure economic regulation supports lower costs, more efficient investment, stronger competition and better outcomes for consumers. As the energy system continues to evolve, the regulatory framework should reward the solutions that deliver the greatest value to customers, regardless of where those solutions originate.

Read the full submission here.