AER – Access Arrangements underway

Access Arrangements & Price Determinations

Oct 28
AER – Access Arrangements underway

This summarises the access arrangement and price determination activity currently underway with the Australian Energy Regulator (AER).

Draft determinations

The AER has recently published its draft determinations for:

  • Powerlink in Queensland (2017-2022) – electricity transmission network service provider; and
  • TasNetworks in Tasmania (2017-2019) – electricity distribution network service provider.

Key points in these determinations are summarised below.

Building block Powerlink (QLD) TasNetworks

(TAS)

Proposal Draft determination Variance Proposal Draft determination Variance
Regulated revenue

($m nominal)

4,017.2 3,720.8 -7.4% 511.9 446.6 -12.7%
Cost of capital

(2017/18)

6.04% 5.48% 0.64% 6.04% 5.48% 0.64%
Forecast capital expenditure

($m 2016/17)

959.7 775.2 -19.2% Forecast capex asset lives shorter than efficient benchmark company
Efficiency Benefit Sharing Scheme – forecast operating costs

($m 2016/17)

41.1 18.1 -56%

Corrects a difference in base years used to forecast opex and EBBS

PowerLink and TasNetworks have until 1 December 2016 to submit revised proposals to the AER and public submissions are also due by that date.  Interested stakeholders have until 23 December 2016 to make submissions on the revised proposals.  The AER intends to publish its final decisions towards the end of April 2017.

Access arrangement proposals submitted

Two transmission companies have recently submitted access arrangement proposals to the AER for consideration, these are:

Submissions on APA Group’s initial proposal closed on 18 October 2016 and the AER is expecting to release its final decision for AusNet Services by the end of January 2017.

Framework and Agreements

Publishing Frameworks and Approach papers constitute the first step in an access arrangement process and provide guidance on how the AER will apply transmission incentive schemes.  Three transmission electricity service providers are currently in this first stage of the access arrangement process for the 2018-2023 regulatory periods, these are:

Key dates for the access arrangement timetables are shown in the table below.

Indicative date Access Arrangement event Party
1 January 2017 Initial revenue proposals Service providers
March 2017 Issues papers AER
September 2017 Draft determinations AER
December 2017 Revised revenue proposals Service providers
30 April 2018 Final determinations AER