Reports & Publications

Independent Verifier for Powerco Limited's recent customised price-quality path (CPP) proposal to the NZ Commerce Commission

farrierswier was independent verifier for Powerco Limited’s (Powerco) recent customised price-quality path (CPP) proposal to the NZ Commerce Commission (the Commission). Powerco proposes to step up the investment it says its network needs so that it can continue to meet customer expectations. The verification process adds value to the quality of CPP proposals and to the Commission’s decision-making by testing, in advance of submission, the assumptions that underpin forecast information on major capital projects, operating expenditure, and energy demand. The Commission noted that it was very satisfied “by the rigour of Farrier Swier’s analysis” and considered that our review of Powerco’s proposal was “thorough and undertaken to a high standard”. As a result, the Commission said that it had confidence in our report and intends to rely on our opinion when making its decision on Powerco’s proposal. A copy of farrierswier's report can be downloaded by hitting this link: More »

Limited Merits Review - Bad decisions taken quickly are not preferable to ensuring good decisions are taken

Geoff Swier was one of a group of former regulators and advisors – Greg Houston, Paul Kenny, Prof Graeme Samuel, Geoff Swier and Ann Whitfield – who made a submission to the COAG Energy Council’s review of the limited merits review (LMR) regime. Key points of the submission included that bad decisions taken quickly are not preferable to ensuring good decisions are taken; and that the existence of effective and efficient arrangements for merits-based review of administrative decisions is fundamental to the long term success of any regulatory regime. The submission concluded that beyond measures to address the procedural hiatus that has developed, and perhaps other minor process or consumer resourcing changes, there is no apparent evidentiary basis for making further substantial changes to the LMR framework at this time. More »

2016 Energy Retailer Survey Report for the Australian Energy Market Commission

Farrier Swier Consulting undertook: - research for the Australian Energy Market Commission as input to its 2016 Retail Competition Review. We conducted surveys and held interviews with a range of electricity and gas retailers across the NEM in early 2016. More »

Economic considerations for interpreting the National Gas Objective, Expert report prepared by Geoff Swier for Gilbert + Tobin

In December 2015, the Economic Regulatory Authority of Western Australia (ERA) released its draft decision not to approve Goldfields Gas Transmission’s (GGT) access arrangement proposal for the 2015-19 period. GGT made further submissions to the Draft Decision, including an expert report prepared by Geoff Swier. The report dealt with questions concerning the National Gas Objective of the National Gas Law and the ERA’s approaches for deprecation and cost allocation. More »

Emerging Rate-of-Change-of-Frequency Problem in the NEM: Best-practice Regulatory Analysis of Options

An electrical power system is designed to run at a nominal frequency, typically 50 or 60 Hz. Power system security cannot be maintained, and the system may collapse, if an event such as a sudden generator outage occurs and the rate of the subsequent frequency change is not managed. Historically in the NEM this Rate of Change of Frequency (RoCoF) has been managed by the resistance to frequency change given by the plentiful system inertia, a byproduct of energy production from existing generators. Increasing penetration of renewable generation, which does not provide system inertia, raises questions about whether this previously free system inertia has an emerging value and how to best manage RoCoF in future. The report focuses on how decisions about investment and operation of technical RoCoF management solutions should best be made in the NEM. It considers whether and how these decisions should be made by regulatory bodies, system operators, or markets, and develops a framework based on the National Electricity Objective and principles of best practice regulation to define what is meant by the “best” option for RoCoF management policy. This report was prepared by Marcelle Gannon, towards the Master of Energy Systems degree (University of Melbourne). Geoff Swier and Sally Farrier supervised the study. More »

Expert report for Jemena Gas Networks NSW (JGN) - Economic considerations for the interpretation of the National Gas Objective

The report prepared by Geoff Swier was included as part of JGN’s 2015-20 Access Arrangement proposal submitted to the Australian Energy Regulator (AER) on 30 June 2014. Questions considered include: What is the meaning of the National Gas Objective? (NGO); How should an economic regulation regime be designed to promote the NGO? Is the building blocks approach likely to contribute to the achievement of the NGO?; and What are the consequences and nature of material error in the application of the building blocks approach for achieving the NGO? More »

Gas Market Scoping Study

The Australian Energy Market Commission engaged K Lowe Consulting, with peer review from Farrier Swier Consulting, to assist in undertaking a study and preparing a report on the current state of the east coast gas market. The report provides an overview of changes in the east coast gas market, and identifies areas of potential improvement in the market and regulatory arrangements. Geoff Swier and Linda McMillan provided peer review of Chapters 7-11 of the report. More »

Farrier Swier Consulting Newsletter May 2013

Some of the highlights of recent work and news about our people. More »

Expert report on regulatory process and practices

Geoff Swier prepared an expert report for the Energy Networks Association assessing rule changes proposed by the Australian Energy Regulator in relation to regulatory process and practices for energy network regulation. More »

Expert report on limited merits review regime

Geoff Swier prepared an expert report for the Financial Investors Group for submission to a review on the limited merits review regime being undertaken by the Standing Council on Energy and Resources. More »

Smart meters, the Victorian Experience - Infratil Investors Day

Shaun Dennison spoke to the Infratil Investors day on Victoria’s experience in mandating the rollout of smart meters. More »

Socially optimal allocation of water resources -Report to the Living Victoria Ministerial Advisory Council

The Minister for Water, Victoria appointed an independent Ministerial Advisory Council to produce a roadmap to advise Government on urban water sector reform. The Council consists of four leading experts in the water sector and related fields, including urban planning and development, environment, energy, urban design and local government. Sally Farrier was asked by the Council to examine the economic mechanisms that can be used to support the socially optimal allocation of all current water resources within the Melbourne system and that could support future investment in sustainable water resources. More »

Submission to Productivity Commission Inquiry examining the case for microeconomic reform in Australia's urban water sector

Geoff Swier collaborated with Dr Larry Ruff (Market Reform), to prepare a submission to the Productivity Commission Inquiry examining the case for microeconomic reform in Australia’s urban water sector. The submission provided input to the Commission’s Inquiry based on the authors’ experience in the urban water sector in Australia and in the reform of similar network industries in Australia and internationally. It deals primarily with potable water supply and also considered other parts of the urban water cycle – e.g. waste water and storm water – to the extent that these affect potable water supply. More »

Dispute Resolution Panel determination: Synergen Power and AEMO - scheduling error

Geoff Swier was appointed to determine a dispute between AEMO and Synergen Power in relation to a declared scheduling error affecting the Mintaro Gas Turbine Station in South Australia. More »

Expert Panel Advice: Compensation claim from Synergen Power

Geoff Swier chaired an expert panel to make recommendations to the Australian Energy Market Commission on Synergen Power’s claim for compensation. The claim related to a period of very high spot prices in South Australia in January 2009, which resulted in an Administered Price Cap (APC) being imposed. The National Electricity Market Rule entitles a generator to claim compensation when an APC is imposed and the generator is unable to recover the direct costs of operating a power station. More »

Appeal Panel: TRUenergy v VENCorp and others

Geoff Swier was appointed to a Panel to determine a dispute between TRUenergy and VENCorp under the Victorian Gas Industry Market and Systems Operations Rules. The other panel members were Sir Anthony Mason (chair), and Tony Fitzgerald QC. The Panel rejected TruEnergy’s claim. The Panel’s determination went on appeal to the Supreme Court of Victoria. Justice Cavanough upheld the Panel’s determination. More »

Managing CPRS transition: implications for electricity retail price regulation

In August 2009, Farrier Swier Consulting prepared a report for the Energy Retailers Association of Australia: Managing CPRS transition: implications for electricity retail price regulation. The report found that it will take some time for the electricity industry to transition to a low carbon future with an effective liquid carbon market. The transition period will be characterised by volatility and uncertainty in wholesale electricity prices, in part because of uncertainty in carbon prices, and an increased risk of unexpected generator failure, with potential flow-on effects for retailers through failed hedging arrangements. To maintain a financially viable and competitive retail sector, retail prices must reflect costs. During the more volatile transition period, there must be flexibility to adjust retail prices quickly. Such adjustments are at odds with current retail price regulation. Therefore, governments need to remove or change retail price regulation. More »

Independent expert report by Geoff Swier for Jemena Gas Networks (NSW) on the appropriate classification of the NSW gas networks.

Geoff Swier prepared an independent expert report for Jemena Gas Networks (NSW) on the appropriate classification of the NSW gas networks. The expert report was included in a submission by Jemena Gas Networks to the relevant decision maker, the National Competition Council (NCC). The NCC decision on classification agreed with the conclusions of the expert report (April 2009). More »

Independent expert report for Jemena Gas Networks (NSW) on the regulatory treatment of operating expenditure by the AER

Geoff Swier prepared an Independent expert report for Jemena Gas Networks (NSW) on the regulatory treatment of operating expenditure by the AER. More »

Feasibility Study and Recommendations for the Large User Water Market

On behalf of the three Melbourne metropolitan retail water companies, FSC prepared a report supporting the assessment of alternative structures for the Melbourne metropolitan water sector. More »

Study for the Australian Utility Regulators Forum on comparing Indexed Approaches with Building Blocks

Geoff Swier and Sally Farrier prepared a report for the Utility Regulators Forum investigating the potential use of indexed approaches such as Total Factor Productivity for determining regulated prices for monopoly infrastructure More »

Sustainability and implementation of economic regulation in the Water Sector in Victoria, Australia

Paper by Sally Farrier and Geoff Swier published in Water Supply Vol 5 No 2 pp 75-85 IWA Publishing 2005 More »

Best Practice Regulation

Speech - The Australian Energy Regulator and best practice regulation - Geoff Swier 6th April 2006, ACORE seminar series, Australian National University, Canberra More »

Investigation into the burden of regulation in NSW

The NSW Government asked IPART to undertake a review to identify areas of material and unwarranted regulatory burden in NSW. Sally Farrier and Linda McMillan assisted IPART with its investigation, focusing on systemic, institutional and governance arrangements that impact on regulatory efficiency. Final Report - Investigation into the burden of regulation in NSW and improving regulatory efficiency, October 2006, Independent Pricing and Regulatory Tribunal, New South Wales More »