Networks NSW challenge AER’s Regulatory Determinations

by Energy Action | Aug 21, 2015
The Australian Competition Tribunal on 17 July 2015 granted leave to Ausgrid, Endeavour Energy and Essential Energy to apply for a review of the decisions handed down by the Australian Energy Regulator in its April 2015 final determinations on network charges.

The NSW distribution network service providers Ausgrid, Endeavour Energy and Essential Energy are collectively known as Networks NSW.

On 30 April 2015, the Australian Energy Regulator (AER) released its final determinations in relation to Networks NSW’s distribution charges for the 2014-19 period. Those determinations significantly reduce the amount that the NSW distribution businesses can recover from customers over the next four years, as shown in the table below.

Network business

Segment

Business revised proposal

AER final decision

Percentage difference

ActewAGL

Distribution

$863 million

$591 million

-32 per cent

Ausgrid

Distribution

$9754 million

$6576 million

-33 per cent

Endeavour Energy

Distribution

$4441 million

$3183 million

-28 per cent

Essential Energy

Distribution

$5546 million

$3826 million

-31 per cent

TransGrid

Transmission

$2906 million

$2189 million

-25 per cent

Directlink

Transmission

$79 million

$69 million

-12 per cent

Source: AER

Along with ACT energy provider ActewAGL, the applications to the Competition Tribunal are appealing the final decisions on grounds that the AER has made material errors in determining revenue requirements for areas such as operational expenditure and the rate of return.

An application to the Competition Tribunal for the review of the AER’s final decisions was also filed by the Public Interest Advocacy Centre. Taking a contrary position to the networks, the application by the Public Interest Advocacy Centre contends that the AER final decision is too generous and allows the service providers to maintain what the Advocacy Centre considers to be unnecessarily high electricity prices for consumers.

A review hearing will be held in September 2015.

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