Price Determinations – Electricity distribution in the NEM

Access Arrangements & Price Determinations

Aug 20
Price Determinations – Electricity distribution in the NEM

The AER is currently undertaking price determinations for the following electricity distribution network service providers:

TasNetworks (formerly Aurora Energy) (2017-2021) – TAS.

  • TasNetworks has requested a new Framework & Approach (F&A) which was published on 9 Jul 2015.
  • The regulatory proposal needs to be submitted by Jan 2016.

Essential Energy (2014-2019) – NSW.

  • Essential Energy submitted a revised regulatory proposal on 20 Jan 2015.
  • The AER published its final decision on 30 Apr 2015 which saw reductions in both the rate of return and allowable forecast operating costs (30% reduction).

Endeavour Energy (2014-2019) – NSW.

  • Endeavour submitted a revised regulatory proposal on 20 Jan 2015.
  • The final decision was published 30 Apr 2015, allowing 28% less revenue to be recovered over the period:
    • The Weighted Average Cost of Capital (WACC) was lower and forecast operating costs were reduced by 17%.
    • The AER accepted Endeavour’s capex forecast.

ActewAGL (2014-2019) – ACT.

  • A revised regulatory proposal was submitted on 20 Jan 2015.
  • The final decision was published on 30 Apr 2015 which saw a:
    • 31.5% reduction in allowable revenue impacted by lower WACC;
    • 35% reduction in forecast operating costs; and
    • 10% reduction in forecast capital costs.

Energex (2015-2020) – QLD.

  • The AER’s preliminary decision was published on 30 Apr 2015.
    • Overall a 22.6% reduction in allowable revenue.
    • The operating cost forecast was accepted.
    • Forecast capital costs were reduced by 27% from the original submission.
  • Energex submitted a revised regulatory proposal on 3 Jul 2015.
  • A final decision from the AER is required by 31 Oct 2015.

Ergon Energy (2015-2020) – QLD.

  • The AER’s preliminary decision was published on 30 Apr 2015.
    • Overall a 27% reduction in allowable revenue.
    • A 10% reduction in forecast operating costs.
    • Forecast capital costs were reduced by 36% from the original submission.
  • A revised regulatory proposal was submitted on 3 Jul 2015.
  • The final decision is required by 31 Oct 2015.

SA Power Networks (2015-2020) – SA.

  • The AER’s preliminary decision published on 30 Apr 2015.
    • Overall a 32% reduction in allowable revenue.
    • A 19% reduction in forecast operating costs.
    • Forecast capital costs reduced by 32% from the original submission.
    • The depreciation charge was reduced by 43% because of a different methodology used by the AER to calculate remaining asset lives.
  • A revised regulatory proposal was submitted by SA Power Networks on 3 Jul 2015.
  • A final decision is required by 31 Oct 2015.

Other activity:

The Victorian electricity distribution services providers Jemena, SPAusNet, United Energy, Powercor and CitiPower submitted their regulatory proposals on 30 Apr 2015 and submissions closed on 13 Jul 2015.  The AER published an issues paper on 10 Jun 2015 and is currently preparing draft determinations for each company.  Final decisions are required by end Apr 2016.