Power companies face tougher regulations

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Power companies face tougher regulations

Power companies who appeal decisions by the energy regulator could face tougher regulations.

State energy minsters have failed to reach consensus on doing away with a process that allows power companies to subvert attempts by the energy regulator to keep a lid on prices.

While they admitted the system wasn't working and should be reformed, the ministers could not agree to abolish the limited merits review that allows the companies to appeal the Australian Energy Regulator's decisions.

Victoria's Energy Minister Lily D'Ambrosio said only the Commonwealth, South Australia and Victoria wanted to abolish the regime.

"Unfortunately, we were not able to get unanimity," she told reporters after the COAG Energy Council meeting in Melbourne on Wednesday.

"But we managed to get a consensus around providing some stricter controls around how appeals can be made by the monopoly power businesses."

The council says they all agreed in principle that significant and immediate reform to the process was needed.

A working group will develop amendments for approval in the first quarter of next year.

These amendments will look at forcing companies to pay the costs of an appeal and demonstrate that overturning the regulator's decision wouldn't result in "serious detriment" to the long-term interests of consumers.

The ministers also agreed to fast-track regulatory changes that need to occur to facilitate the full integration of new energy technologies and in particular renewable energy.

They will also look at improving the security and reliability of the energy market in the wake of the SA blackout.

There was also no consensus on a national renewable energy approach, which concerned many states and territories.

"It's very disappointing to see a paralysed federal government not stepping up to the plate and meeting their responsibilities to transition our economy to cleaner energy sources," Queensland Energy Minister Mark Bailey said.

Ms D'Ambrosio said the government was using the states to reach its own 23 per cent target by 2020 without doing much work.

Victoria has a 40 per cent renewable target by 2025, while SA already produces more than 40 per cent and Queensland is pushing for 50 per cent by 2030.

"A failure of leadership means that the states have to do a lot of the heavy lifting," she said.

The next COAG Energy Council meeting will be held in February.