AER: re-examination of the determinations on debt for the NSW and ACT electricity distributors and for NSW gas distributor Jemena Gas Networks (submissions by 10 February 2018)

“The Australian Energy Regulator (AER) today released a position paper inviting submissions on how it proposes to remake its remitted debt decisions for the NSW and ACT electricity distributors and for NSW gas distributor Jemena Gas Networks (JGN), following a Full Federal Court decision on the matter in May 2017.

The remittal decisions may affect the return on capital for electricity distributors Endeavour Energy, Essential Energy, Ausgrid and ActewAGL for their 2014-19 regulatory control periods and for gas distributor JGN for its 2015-20 access arrangement period.

The AER’s original decisions in April 2015 for the electricity distributors and in June 2015 for JGN proposed to apply a full transition from the on the day approach to the trailing average approach for estimating the cost of debt. The difference in the return on capital (as a result of the alternate debt estimation methodologies related to the transition) sought by the businesses relative to the AER’s final decisions was around $1.2 billion. This is based on calculations at the time of the initial Australian Competition Tribunal hearing in late 2015.

During the time the appeal processes were underway, all of the electricity distributors submitted their annual pricing proposals consistent with our final decisions for the 2015–16 regulatory year, which we approved. For JGN the prices for the 2015-16 year were also set in accordance with our final determination.”

The AER has asked for submissions in response to the issues paper by 10 February 2018

Full AER post:

https://www.aer.gov.au/communication/aer-re-examination-of-the-determinations-on-debt-for-the-nsw-and-act-electricity-distributors-and-for-nsw-gas-distributor-jemena-gas-networks

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