Benchmark upstream augmentation charge rates for Citipower's network
Guidance Paper: The AER’s conclusion on the benchmark upstream augmentation charge rates for CitiPower’s network
The Australian Energy Regulator (AER) released, on 25 June 2010, the Guidance Paper: The AER’s conclusion on the benchmark upstream augmentation charge rates for CitiPower’s network.
It should be noted that this AER conclusion only relates to the interpretation and application of the Essential Services Commission of Victoria’s Electricity Industry Guideline No. 14 - Provision of Services by Electricity Distributors to CitiPower’s augmentation charges.
The AER’s findings are based on a consultation process following CitiPower’s approach in charging new customers the full marginal average unit cost for future augmentation of CitiPower’s shared network assets upstream of the customers’ connection points (commonly referred to as deep connection charge) as part of the overall project cost in calculating connection charges, regardless of whether such augmentation takes place immediately or some time in the future.
The guidance paper provides the AER’s conclusions on the fair and reasonable benchmark upstream augmentation charge rates for CitiPower’s network. The AER will use the findings of this paper to inform any future assessment of whether CitiPower’s connection charges under its distribution licence conditions are fair and reasonable and in accordance with Guideline No. 14.
Below is the consultation process undertaken in reaching the AER’s conclusions.
Draft Decision: Benchmark upstream augmentation charge rates for Citipower's network
The Australian Energy Regulator (AER) released, on 19 February 2010, the Draft Decision: Benchmark upstream augmentation charge rates for Citipower's network.
The Draft Decision took into account the submissions recieved on the AER's previous request for consultation. The AER considered that its original proposed calculation method required modification, so as to better take into account new connecting customers’ prescribed connection life.
The AER sought additional consultation on the methodology presented in this draft decision.
On July 17 2009, the AER released a formal decision on CitiPower's capital contribution charge policy for recovering future upstream network augmentation costs. The formal decision is available below. This decision follows a draft decision on "CitiPower's capital contribution charge for marginal cost of network reinforcement" published by the Essential Services Commission of Victoria (ESCV) in December 2008.
The AER concluded that CitiPower's current charge rates for recovering future upstream network augmentation costs do not comply with Electricity Industry Guideline No.14 of the ESCV because these rates do not take appropriate account of the timing of future augmentations. However, further consultation on the charging rates proposed by the AER is desirable as it did not receive sufficient information through the initial consultation process to form a final view on this matter.
The ESCV's draft decision is available on the ESCV's wesbite.
