Last week, Ty Christopher, Director of the Energy Futures Network at the University of Wollongong, explained how, thanks to the people’s rooftop solar revolution, he believes energy regulations are no longer fit for purpose. This week, he calls for structural reform to put consumers before gentailers – that is, generator retailers who own the assets that generate electricity and also sell electricity to businesses and homes.

If old rules no longer apply, what should we do?

The big challenge is we're talking here about multi-billion dollar companies, in particular, the large retailers and the large gentailers.

There’s three big retailers that dominate the market: AGL, Origin and Energy Australia. They collectively have so much of the market under their control that they can influence the wholesale price of electricity and hence increase what we all pay for our electricity. 

People with backgrounds in large energy corporations, including fossil fuel companies and the large grid operators dominate, in their numbers, the board membership of the Australian Energy Market Operator (AEMO). So we have a situation where the market operator is run by a board, and that board is populated with many people with backgrounds in large energy corporations and fossil fuel companies, and that market operator is expected to control the market and make sure the market is working properly. My question is in whose best interests will they operate the market? I think we can all guess the answer…

Not many people know about this situation – when I say it to people, they're almost shocked by it. But it has forever been that way. Indeed, AEMO is funded via fees paid by market participants. So, the big energy companies who use and benefit from the market are the ones paying the market controller to operate the market. My question again is in whose best interests will they operate the market?

Do we need more transparency in the energy sector? 

I think what we need is to fundamentally restructure the board of AEMO and the other regulatory agencies such as the the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER). Some of these regulators might present to us one or two token board positions  which are there as the customer representative. Well, I say good luck when that comes down to a vote when you are the one customer representative in a room full of board members who come from industry backgrounds. 

So I think that the answer for us, as consumers, is quite obvious. 

We should basically be replacing the boards of these energy regulators with boards that are majority, not entirely, but majority dominated by representatives who look after our interests as energy consumers, not the interests of the multi-billion-dollar companies that make multi-billion-dollar profits out of charging us for energy and energy services. 

Yes, industry representatives should have a voice at the table perhaps, but I really fundamentally ask the question as to whether that voice should be the dominant one, and the one that prevails, or whether us as consumers should have the final say. 

So that would be the most immediate change that could be made. 

That would be, I think, the best thing to bring down electricity prices and shift the focus in the electricity market onto better use of distributed energy resources (solar, batteries, et cetera) and bring about more democratic access to clean energy – really addressing some of those structural reforms that are needed in how the energy markets operate. 

Who would you put on the boards? What would be the best combination? 

I think we could be looking to not-for-profit and social interest bodies that are already out there to place their senior members and their existing board members onto these energy boards as a very good start. 

I'm thinking here about representatives from, say, the Salvation Army and Energy Ombudsman. People who are seeing in real time, in their main reason for being, the impacts of energy poverty and the of cost-of-living crisis in families. They would bring that real shared perspective into them saying, 'Well, now hang on a minute, let's set some rules up here that operate much better in the interests of all energy consumers and businesses.' 

We hear lots of talk about energy market reform, but talk does nothing to structurally address any of the problems that are here, and neither do handouts for electricity bill relief, much needed though they are. Rather than pursuing one-off political sugar rush solutions, or talking about reform, we should instead demand our leaders take positive action to appoint regulatory boards who will operate in our best interests as energy consumers. 

Ty Christopher, Endeavour Energy’s former ‘chief engineer’, is an electrical engineer who brings 37 years of hands-on experience in the power supply industry to his current role as Director of the Energy Futures Network at the University of Wollongong.

Read more Energy Explained articles

• Should you put rooftop solar on your home?
• The case for home and community batteries
• Electricity Regulation – Kicking goals or killing time before the bell?
• The hidden cost in your electricity bill
• Why restructuring the market may save you money
• Why should we 'Electrify Everything' – and why can't Wollongong run on sun?
• How much power can solar actually deliver?