2012–13 Distribution Loss Factor approval process

Distribution Network Service Providers (DNSPs) have an obligation to provide distribution loss factors (DLFs) approved by the AER to AEMO for publication by 1 April 2012. An assessment is required under clause 3.6.3(i) of the National Electricity Rules (NER) and the DLFs must be determined in accordance with a methodology published either by the AER or the DNSP (where the AER has not published a methodology). The AER has previously decided not to publish a DLF calculation methodology.

AER process for approval of DNSPs DLF calculations for 2012-13 and beyond

The AER’s proposed timeline and process for approval of future year DLFs will be a continuation of the approach used in recent years for approving DLFs. The following package should be submitted by the end of the second week in March each year to guarantee the AER can complete its assessment in time to meet the 1 April deadline for receipt of approved DLFs by AEMO.

DNSPs should determine DLFs in accordance with their own published methodology or, where appropriate, the relevant published methodology operating in their jurisdiction as at 31 December 2007. Methodologies may be amended where necessary to better reflect the principles set out in the NER so long as the revised methodology is provided to the AER and published by the DNSP in an accessible form.

DNSPs must determine their DLFs in accordance with their respective published methodologies. For approval by the AER the DNSP is to provide to the AER:

  1. Publication of methodology for determining DLFs
  2. Independent certification of DNSPs’ DLFs
  • The DLFs in a format fit for publication by AEMO
  • A copy of the methodology (in electronic form) and
  • An independent assurance/certification that the DLFs have been calculated by the application of the relevant published methodology.

The AER considers that an assurance or certification provided by an auditor or a technical consultant is acceptable. The AER does not intend certification to be unduly burdensome but set at a standard sufficient for the certifying party to be confident that the appropriate data has been used, the correct methodology applied and that the results are a fair statement of the applicable loss factors for that firm.

Timeline for AER approval of DNSPs’ 2012-13 DLFs

Friday, 9 March 2012 DNSPs submit DLFs and supporting documentation (including independent certification report) to the AER.

Thursday, 22 March 2012 AER provides approved DLFs to AEMO on behalf of DNSPs.

Issued date: 
7 December 2011
AER reference: 
AC 481/11
Infocentre general enquiries 1300 302 502 AERInquiry@aer.gov.au