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Energy reform lights a path to new investment.



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1 July 2005 05/213

ENERGY REFORM LIGHTS A PATH TO NEW INVESTMENT

An important first step to a new era of energy market efficiency has been welcomed by Federal Industry Minister Ian Macfarlane today.

Mr Macfarlane said the start of the Australian Energy Regulator (AER) and the Australian Energy Market Commission (AEMC) this morning was a significant milestone on the path to a truly national energy market.

“The AER replaces a plethora of state-based energy regulators, creating a streamlined regulatory framework that will promote vital investment in Australia’s energy system.

“It’s a strong signal to potential investors that Australia is serious about creating a positive climate for the estimated A$20 billion investment in new energy infrastructure needed over the next decade.”

Mr Macfarlane said the Australian Government would fully fund the regulator in its first year of operation, with negotiations currently underway with the States to determine future funding arrangements and broader energy market reforms.

“Labor Governments across the country have been calling for a national approach to infrastructure and this is their chance to turn rhetoric into reality.

“Infrastructure doesn’t get any more fundamental than keeping the lights on across the nation and it’s vital the states get on board.

“Today marks an important first step, but there are still important reforms ahead to strengthen competition and improve investment in Australia’s energy market for the benefit of all consumers.”

The AER and the AEMC represent the implementation of the first major set of commitments outlined in the 2004 COAG Australian Energy Market Agreement.

Under the new structure:

• Rules to guide electricity market development will be made the by the AEMC; and • Regulatory enforcement and compliance with the rules will be the responsibility of the AER.

The changes have broad industry support. CMR05-312