The AER has released its final decision to approve TasNetworks' application for a waiver of obligations under clause 7.1(a)(ii) of the Transmission Ring-fencing Guidelines. This decision confirms our draft decision of 21 March 2014.
Clause 7.1(a)(ii) of the Guidelines provides that a transmission network service provider must not carry on a related business, which includes the activity of distribution. Having considered TasNetworks' application, we consider that the benefit to the public of compliance with the ring-fencing obligation is in this case outweighed by the administrative cost of compliance to TasNetworks.
The waiver will allow TasNetworks to own and operate both the transmission business currently operated by Transend and the distribution business operated by Aurora. Integration of the two Tasmanian network businesses is one of a number of reforms to the Tasmanian electricity supply industry announced by the Tasmanian Government on 15 May 2012.