1. Commission's Powers and Approach
1. The Commission should work with stakeholders including consumers, market participants and Government agencies to achieve its objectives.
2. In particular, whenever possible, the Commission should use its powers of persuasion and promotion, and provision of information, guidelines and model arrangements, to achieve its objectives rather than recommending regulations and rules.
3. However, the Government recognises that clear and effective regulations and rules are required in many key parts of the market. Accordingly, the Commission has powers under the Electricity Act 1992 to make recommendations to the Minister of Energy concerning new or amended regulations and rules. The Commission should be prepared to use these powers fully where required to achieve the Government's policy objectives.
Consultation
4. Where the Commission proposes new regulations or rules, or substantial changes to existing regulations or rules, the Act requires it to follow good processes. These include identification of the main options, assessment of costs and benefits, and consultation with and exposure of its analyses to affected parties. It is also required to satisfy itself that other options (such as information, education and voluntary arrangements) are unlikely to satisfactorily achieve the Government's objectives.
5. The Government expects the Commission to maintain a protocol on its consultation processes.
Advisory Groups
6. The Commission should make extensive use of advisory groups wherever possible to develop industry arrangements and make recommendations concerning regulations and rules. These advisory groups should have the necessary expertise and be appropriately representative of affected parties, including consumers. The Commission should consider providing limited funding assistance for consumer representatives where it considers that this may improve the quality of decision-making.
Innovation
7. The Commission should keep in mind the importance of encouraging innovation. It should therefore consider, when deciding how best to deliver on its objectives, any trade-offs between certainty and clarity on the one hand and encouraging and allowing scope for innovation on the other.
Information
8. High quality information is essential for efficient markets. The Commission should give high priority to ensuring that relevant information is made available to market participants and to the public at large on matters relating to the electricity sector.
Administration of Regulations and Rules
9. The Government expects the Commission to take responsibility for monitoring compliance, investigating alleged breaches and if necessary, taking enforcement action in relation to regulations and rules, particularly:
- Electricity Governance Regulations 2003
- Electricity Governance Rules 2003
- Electricity (Low Fixed Charge Tariff Option for Domestic Consumers) Regulations 2004
- Electricity Governance (Connection of Distributed Generation) Regulations 2007
and for any subsequent amendments to these regulations and rules.
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