AER as part of its review of incentive schemes releases position paper on the Capital Expenditure Sharing Scheme

The Australian Energy Regulator (AER) has as part of its review of incentive schemes for regulated networks released a position paper on the Capital Expenditure Sharing Scheme (CESS) for network service providers.

We are now seeking submissions on the views presented in the paper.

These views were informed by earlier stakeholder submissions received in March to our discussion paper and include:

  • retaining the CESS because it has been successful in providing incentives to network service providers to incur efficient capital expenditure
  • retaining the current 30% sharing ratio as a default rate
  • considering a variable rate, with a 30% default rate that may be lowered to 20%, to be assessed against certain criteria
  • introducing additional transparency with requirements for network service providers to explain the reasons for differences between actual capex incurred and our approved forecasts in preceding regulatory control periods.

Invitation for submissions

We invite stakeholders to make submissions on this position paper by Friday, 9 September 2022. Submission should be sent to

To help formalise your submission, we are hosting a stakeholder workshop on Friday 26 August 2022, 2 to 4 pm. The workshop will provide an opportunity for stakeholders to raise questions and provide feedback. Stakeholders can now register to attend.

The AER will take submissions and feedback from the workshop into account in finalising its draft decision, to be released in October 2022.

Issued date: 
11 August 2022
AER reference: 
AC 125/22
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