Position paper: Pass-throughs and revenue cap re-openers

The AER has released a position paper inviting comments from interested parties on approaches under the National Electricity Rules in relation to varying a transmission network service provider’s (TNSP’s) revenue cap allowance within a regulatory period in response to exogenous events.

The paper seeks comment about the practice, adopted for the recent TransGrid and EnergyAustralia revenue resets, of providing TNSPs with detailed pass-through rules that specify the type of events that qualify for, and the mechanism by which a service provider can apply for, a revenue cap adjustment. In the position paper, the AER indicates a preference for replacing the revenue cap re-opener provisions specified in the Statement of Regulatory Principles with detailed pass-through arrangements.

The AER understands that the AEMC will be releasing its proposed amendments to Chapter 6 of the NER in early February 2006 and that these proposals are likely to address the issues of re-openers and pass-throughs. The AER asks interested parties to take into account the AEMC draft proposals when responding to this position paper. The AER, in finalising its position, will reflect the regulatory framework proposed by the AEMC and will make necessary amendments.

Interested parties are invited to make written submissions by 24 February 2006. The AER hopes to release a final determination on the issues raised in this paper in April.

Issued date: 
21 December 2005
AER reference: 
AC 005/05