ActewAGL's cost allocation method CAM governs the manner in which ActewAGL is allowed to allocate costs to the distribution services that it provides. Allocation of costs between services is required to accurately represent costs incurred in providing the respective services. This prevents cross-subsidisation between distribution services and other services ActewAGL provides.
Our assessment of ActewAGL's CAM was assisted by advice from KPMG, which we engaged.
On 7 June 2013, the AER approved the revised CAM submitted by ActewAGL in accordance with chapter six of the Electricity Rules. Its revised CAM replaces ActewAGL’s previous CAM approved by the AER in 2008. ActewAGL’s previous CAM was prepared and approved by the AER under transitional arrangements which expire at the end of the 2009-14 regulatory control period. Under those transitional arrangements, ActewAGL’s previous CAM reflected as much as practicable its CAM used to prepare its last regulatory proposal for the Independent Competition and Regulatory Commission.
ActewAGL submitted its revised CAM for approval ahead of the upcoming regulatory control period, so its regulatory proposal for the new control period may be prepared accordingly. The CAM approved by the AER on 7 June 2013 is the first for ActewAGL prepared entirely in accordance with the National Electricity Rules’ cost allocation requirements.