AER consults on draft decisions for Ausgrid, Endeavour Energy, Essential Energy, Evoenergy, TasNetworks and Power and Water Corporation 2024-29 regulatory proposals

AER consults on draft decisions for Ausgrid, Endeavour Energy, Essential Energy, Evoenergy, TasNetworks and Power and Water Corporation 2024-29 regulatory proposals. The AER has released draft decisions on the 2024–29 revenue proposals submitted by six electricity network businesses across four states and/or territories. Businesses have until 30 November 2023 to respond to the respective draft decisions in a revised proposal. The businesses have proposed expenditure in areas such as improved network resilience to address climate change, the uptake and integration of consumer energy resources.

Original Press Release:

Sept. 28 -- Australian Energy Regulator issued the following news release:

The AER has released draft decisions on the 2024-29 revenue proposals submitted by six electricity network businesses across four states and/or territories: New South Wales, the Australian Capital Territory, Tasmania, and the Northern Territory.

Electricity transmission and distribution network business are required to submit revenue proposals to the AER every five years outlining how much they intend to recover from consumers over the next five years.

Our draft decisions on expected revenues for the 2024–29 period are ($nominal):

* Ausgrid: $9,619.6 million, or $144.3 million (1.5%) less than proposed

* Endeavour Energy: $5,597.8 million, or $5.6 million (0.1%) less than proposed

* Essential Energy: $6,191.1 million, or $185.7 (3.0%) less than proposed

* Evoenergy: $1,043.7 million, or $34.8 million (3.2%) less than proposed

* Power and Water Corporation: $1,016.4 million, or $74.7 million (6.8%) less than proposed

* TasNetworks: $1,826.0 million, or $111.5 million (6.5%) higher than proposed (distribution); $880.1 million, or $13.2 million (1.5%) higher than proposed (transmission)

The draft decisions follow a rigorous and thorough consultation and assessment process undertaken by the AER, and come at a challenging time for energy consumers and the sector more broadly.

The AER has sought to balance the need for efficient and prudent investments in new and emerging areas that support the energy transition, while ensuring consumers facing cost-of-living pressures pay no more than necessary for electricity services that meets their current and future needs.

The businesses have proposed expenditure in areas such as improved network resilience to address climate change, the uptake and integration of consumer energy resources (including rooftop solar, batteries and electrical vehicles), and cyber security and digitalisation measures.

The AER has approved proposed expenditures that are well justified and have made reductions to proposed expenditures that require further justification.

Movements in market variables such as interest rates, bond rates and expected inflation are currently acting to increase regulated revenues, and for TasNetworks these have resulted in higher draft decision outcomes than reflected in initial proposals. Updates for these movements are a standard part of our decision making process.

The New South Wales and Australian Capital Territory businesses have also proposed export pricing as part of their tariff arrangements. The AER has approved these proposals which would reward solar users who contribute energy to the grid when it is most needed. Further information on export reward tariffs can be found here(https://www.aer.gov.au/system/files/AER%20-%202024-29%20electricity%20resets%20-%20export%20reward%20tariffs%20and%20you%20factsheet%20-%20September%202023_0.pdf).

The AER also notes that two of the businesses (Endeavour Energy and Essential Energy) were selected for the early signal pathway under the Better Resets Handbook. These businesses have met most of the AER’s expectations, as set out in the Handbook. The AER has also accepted the majority of their proposals at the draft determination stage, and commends both businesses for their commitment and participation in this new process which places greater emphasis on genuine consumer engagement to support well-justified revenue proposals.

Next steps

The businesses now have until 30 November 2023 to respond to the respective draft decisions in a revised proposal.

The AER will hold online public forums on the draft decisions in early October:

* 9 October 2023: Ausgrid, Endeavour Energy, Essential Energy (NSW) - See Eventbrite here(https://www.eventbrite.com.au/e/predetermination-conference-nsw-2024-29-electricity-revenue-proposal-tickets-706381294467?aff=erelpanelorg).

* 10 October 2023: TasNetworks (TAS) - See Eventbrite herehttps://www.eventbrite.com.au/e/predetermination-conference-tas-2024-29-...).

* 11 October 2023: Evoenergy (ACT) - See Eventbrite here(https://www.eventbrite.com.au/e/predetermination-conference-act-2024-29-electricity-revenue-proposal-tickets-706430280987?aff=ebdssbdestsearch).

* 18 October 2023: Power and Water Corporation (NT) - See Eventbrite here(https://www.eventbrite.com.au/e/predetermination-conference-nt-2024-29-electricity-revenue-proposal-tickets-706432617977?aff=ebdssbdestsearch).

Interested stakeholders are invited to provide written submissions on the draft decisions and revised proposals by 19 January 2024.

The AER’s final determinations, which will be made by 30 April 2024, will set revenues that will form the basis for charges for the 1 July 2024 to 30 June 2029 period.

Source: Australian Energy Regulator

[Category: Water Utilities, Utilities, Regulatory and Legal, ESG]