As part of our response to the Treasurer's request on regulatory reform opportunities, we initiated our capital expenditure (capex) model review, to streamline and simplify obligations in the energy sector. The standardised capex model has been used since 2021 for each electricity distribution determination, and we consider it timely to review the model in preparation for the 2028 distribution determinations. Our review also proposes a model for transmission to try and replicate the benefits we have seen from our standardised model.
The model has streamlined the resources and consultation required between the AER and distributors to review and manage standard control services capex forecasts. This has increased consistency and reduced modelling errors across electricity distribution regulatory proposals. The standardised model has provided distributors with greater transparency regarding our decisions and how alternative forecasts are determined.
This project aims to reduce the regulatory burden on networks by improving on the current distribution capex model and creating a streamlined template for transmission networks. The updated distribution capex model reflects reporting patterns and addresses common issues we have observed during recent distribution determinations. While the introduction of a standardised transmission capex model allows networks to provide meaningful data without the need to develop a model for each revenue determination. Through our review, we intend to build upon the benefits of the initial standardised capex model for both distribution and transmission electricity networks.