AER review of electricity transmission and distribution WACC parameters
The National Electricity Rules provide that the AER may review the weighted average cost of capital (WACC) parameters to be adopted in determinations for electricity transmission and distribution businesses. Reviews are to be conducted every five years with the first review to be concluded by 31 March 2009. The outcomes of this review will apply to all electricity determinations where the proposal is submitted between 31 March 2009 and before the completion of the AER's second review, in 2014.
For transmission determinations, the WACC parameters must be as per the outcomes of this review. For distribution determinations, a departure from the outcomes of this review is allowed for individual determinations if there is persuasive evidence to do so.
Issues paper
On 6 August 2008, the AER released an issues paper canvassing issues relevant to this review. Submissions on the issues paper closed on 17 September 2008.
On 11 December 2008, the AER released its proposed statement (transmission) and proposed statement of regulatory intent (distribution) on the WACC parameters. The AER also published its explanatory statement on the proposed WACC parameters, and consultants reports commissioned by the AER in the context of the proposed statements.
The AER has scheduled a public forum to discuss its proposed WACC parameters and to receive oral submissions from interested parties on Wednesday, 17 December 2008, at the Hilton, Melbourne Airport, commencing at 10am. Interested parties can register to attend the public forum by sending a completed registration form, via email to
aerinquiry@aer.gov.au or via fax to (03) 9290 1457, by COB Friday, 12 December 2008.
Any enquiries about the public forum should be directed to the AER’s Network Regulation South Branch on (03) 9290 1444 or at the above email address.
Interested parties are invited to make submissions to the AER on the explanatory statement and proposed statements by COB Wednesday, 28 January 2008. Because the NER require the AER to release its final statement on the revised WACC parameters (transmission) and final statement of regulatory intent on the revised WACC parameters (distribution) by 31 March 2009, the AER notes that it is unlikely to be able to fully consider or give full weight to any submission received after this date.
Submissions can be sent electronically to aerinquiry@aer.gov.au. Alternatively, written submissions can be sent to:
Mr Chris Pattas
General Manager
Network Regulation South Branch
Australian Energy Regulator
GPO Box 520
Melbourne VIC 3001
The AER prefers that all submissions be publicly available. This is to facilitate an informed and transparent consultative process. Accordingly, submissions will be treated as public documents unless otherwise requested. Parties wishing to submit confidential information are requested to:
clearly identify the information that is the subject of the confidentially claim, and
provide a non-confidential version of the submission.
All non-confidential submissions will be placed on the AER's website.
The AER will deal with all information it receives in the review process, including submissions on the proposed statements, in accordance with the ACCC/AER information policy. The policy is available on the AER website.
Final statements
The AER must release its final statement (transmission) and final statement of regulatory intent (distribution) on the WACC parameters by 31 March 2009.
