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Annual Report 2015-2016 Statement of Compliance Hon Annual Report 2015-2016 Statement of compliance Hon. Dr Mike Nahan MLA Treasurer 13th Floor, Dumas House Havelock Street West Perth WA 6005 Dear Treasurer ECONOMIC REGULATION AUTHORITY 2015-16 ANNUAL REPORT In accordance with section 61 of the Financial Management Act 2006, we hereby submit for your information and presentation to Parliament, the annual report of the Economic Regulation Authority for the financial year ended 30 June 2016. The annual report has been prepared in accordance with the provisions of the Financial Management Act 2006, the Public Sector Management Act 1994 and the Treasurer’s Instructions. Yours sincerely, Stephen King Steve Edwell Member Member ii Annual Report 2015-2016 Economic Regulation Authority OVERVIEW Contact details Accessing the annual report Office address Our 2015-16 annual report and previous annual reports are PERFORMANCE Office hours 9:00 am to 5:00 pm Monday to Friday available on our website www.erawa.com.au (except public holidays) To make our annual report as accessible as possible, we have provided it in the following formats: Street address Level 4, Albert Facey House • An interactive PDF version, which has links to other 469 Wellington Street sections of the annual report, as well as external links to PERTH WA 6000 content on our website. SIGNIFICANT ISSUES Postal address • An online version, which allows for quick and easy viewing PO Box 8469 of annual report sections. This version also features easy PERTH WA 6849 to use download and print functions. Telephone: (08) 6557 7900 • A text version, which is suitable for use with screen reader Facsimile: (08) 6557 7999 software applications. Email: [email protected] This report can also be made available in alternative formats Website: www.erawa.com.au upon request, including audio, large print and braille. AND LEGAL COMPLIANCE More information about us is available on our website National Relay Service or you can connect with us through Twitter @ERA_WA TTY: 13 36 77 or find us on Linkedin and YouTube (To assist persons with hearing and voice impairment) DISCLOSURES REQUIREMENTS OTHER LEGAL Annual Report 2015-2016 Economic Regulation Authority iii CONTENTS Statement of compliance ........................................ii Inquiries ..........................................................42 Governance disclosures .................................98 Contact details .......................................................iii Prison inquiry ..............................................43 Other legal requirements ................................99 Accessing the annual report ..................................iii Licensing, monitoring and customer Expenditure on advertising ............................99 Contents ................................................................iv protection .......................................................45 Disability access and inclusion plan ...........100 Overview ..............................................................5 Licensing ....................................................46 Compliance with public sector Key achievements in 2015-16 ...........................9 Monitoring .................................................. 47 standards and ethical codes ....................... 102 Access .............................................................9 Customer protection ...................................50 Recordkeeping plans ................................... 102 Economics ..................................................... 10 Independent statutory committees .............52 Government policy requirements ................103 Licensing, monitoring and customer Corporate services .........................................54 Substantive equality .....................................103 protection ....................................................... 10 Corporate governance................................54 Occupational safety, health and injury Stakeholder consultation ................................ 12 Human resources systems .........................54 management ................................................103 Operational structure ..................................... 12 Functional review ........................................55 Government building contracts ....................103 About us ........................................................ 12 Communications ........................................55 Reconciliation action plan ............................103 Our responsible minister ................................. 13 Significant issues impacting the agency ......57 Workforce planning and diversity................103 Relevant legislation ......................................... 13 Disclosures and legal compliance .................60 Staff development ........................................105 Organisational structure ................................. 14 Financial statements ......................................62 Diversity........................................................105 Governing body .............................................. 17 Certification of financial statements ................62 Employee assistance ....................................106 Corporate executive .......................................20 Statement of comprehensive income .............63 Social and charitable activities ......................106 Performance .....................................................20 Statement of financial position ........................64 Other disclosures .......................................... 107 Performance management framework .........20 Statement of changes in equity ......................65 Complaints handling ..................................... 107 Relationship to government goals ..................20 Statement of cash flows .................................66 Public interest disclosures ............................ 107 Key performance indicators ...........................21 Notes to the financial statements....................67 Memoranda of understanding ......................108 Financial performance....................................23 Key performance indicators ...........................91 Audit and risk ...............................................108 Agency performance ......................................23 Formulating the ERA’s key performance Appendices...................................................... 110 Access ...........................................................23 indicators ........................................................91 Appendix 1: Administered legislation .............. 110 Gas access ................................................25 Key effectiveness indicators ...........................91 Appendix 2: Other legislation impacting Electricity access ........................................28 Key efficiency indicators .................................93 the agency .......................................................111 Rail access .................................................32 Ministerial Directives ......................................94 Energy markets ..............................................37 Other financial disclosures ............................94 Wholesale electricity market .......................37 Pricing policies of services provided ...............94 Gas retail market ........................................42 Capital works .................................................96 Staffing policies ..............................................97 iv Annual Report 2015-2016 Economic Regulation Authority HEADING CONTINUED OVERVIEW OVERVIEW PERFORMANCE Message from the Governing Body SIGNIFICANT ISSUES Regulation in free market economies should be kept to a minimum. However, regulation is an unavoidable part of an effective, customer- focused economy, helping to ensure businesses do the right thing by consumers. In the case of economic regulation, the focus is on ensuring that regulated businesses operate efficiently, provide reliable services and do not earn unreasonably large profits. As the State’s independent economic regulator, the ERA regulates the AND LEGAL COMPLIANCE electricity, gas, water and rail industries. These industries are essential to households and businesses, and underpin the overall performance of the Western Australian economy. DISCLOSURES Economic regulation of these industries is crucial because of a lack of competition. Effective economic regulation is a substitute for competition, imposing market discipline on the regulated businesses. The ERA has a wide range of tools at its disposal to ensure that regulated businesses operate in the best interests of the community. REQUIREMENTS OTHER LEGAL Annual Report 2015-2016 Economic Regulation Authority 5 OVERVIEW One of our key responsibilities is regulating for total revenue by $496 million for DBNGP that, in 2014, Vinalco offered electricity in a way access to the transmission pipelines and and $159 million for GGP. The owners of both that was ‘related to market power’. We have distribution systems used to transport gas. pipelines now have an opportunity to apply to asked the Independent Market Operator to refer We determine the default prices, terms and the ACT for a review of our decision. the matter to the Electricity Review Board for an conditions on which third parties can access order of contravention. As with gas, our role in rail is to facilitate efficient this infrastructure to transport and receive gas. use of infrastructure. We do this by applying We also monitor the regulatory scheme
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