Given TNSPs’ regulated monopoly role in planning, operating and maintaining the transmission network, as well as in providing connections to transmission networks, it is necessary to have appropriate controls in place to support competitive outcomes in markets within which TNSPs may operate.
Ring-fencing is essential to deter and detect any discriminatory conduct by regulated businesses when providing negotiated transmission services. On this basis we consider the AER should focus on the costs and benefits of addressing potential harm and conflicts of interests, rather than reported harm. The AEMC has acknowledged that discriminatory conduct may be difficult to detect, and developers would be reluctant to report this conduct because of concerns about the impact on future projects. The very possibility of TNSPs engaging in discriminatory conduct materially reduces competition and investor confidence, creating the potential for inflated prices for consumers.
In our response to the issues paper, we have provided detailed feedback on the types of negotiated transmission services that should be ring fenced, obligations that be applied, and removal of maximum limit on waivers
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