Network access and interconnection

Within the regulatory framework, detailed commercial and technical conditions of network access, and the specific terms of interconnection, are key areas where competition is being encouraged through the use of a network provided by a monopoly supplier. The content of these terms and conditions is of particular importance where the network operator is vertically integrated, as in many network industries. Incorrect network pricing can create perverse incentives that lead to inefficient system use and investment timing and location. For example, electricity transmission pricing regimes that excessively penalise the utilisation of existing assets experiencing spare capacity can inefficiently deter consumption and encourage inefficient by-pass.

Frontier Economics in Australia has been a key advisor to policy makers, regulators, governments and businesses on the development of the electricity transmission investment and pricing regime in Australia. For example, Frontier has in recent years provided extensive advice to the Australian Energy Markets Commission on the electricity transmission revenue, pricing and investment regimes. Frontier has also provided extensive advice on access pricing arrangements and access disputes in a diverse range of sectors including rail, telecommunications, water and wastewater, airport and gas sectors.