Federal Court upholds AER's electricity distribution determination for the Australian Capital Territory

The Federal Court recently delivered its judgment dismissing ActewAGL's application to review the AER's 2009 electricity distribution determination for the Australian Capital Territory.

ActewAGL did not appeal the AER's determination to the Australian Competition Tribunal, but did seek to have the determination reviewed by the Federal Court. In particular, ActewAGL's claim was that the AER's decision relating to the risk free rate used to calculate the rate of return was incorrect.

Had ActewAGL's application been successful, electricity distribution charges on average in the ACT would have increased by about 3.9 per cent in 2011–12, with further increases until the end of the regulatory control period in 2014. This would translate to an increase of about 1.6 per cent next financial year for the average residential customer's electricity bill.

In its judgment on 8 June 11 the Federal Court stated that the AER's decision was based on reasonable grounds and was justified with reference to its reasons.

"The judgment is good news for ACT electricity users and it is also pleasing that the court has recognised the AER's reasoned decision on this issue," AER chairman Mr Andrew Reeves said.

"Considering all relevant material and making a judgment supported by reason is at the heart of the task entrusted to regulators," Mr Reeves said.

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