Accepting submissions
Type
Sector
Electricity
Segment
Consumer matters
Distribution
Retail
Transmission
Region
Australian Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Status
Open
Date initiated

In 2019, we developed the values of customer reliability (VCR) methodology for standard outages (up to 12 hours), following extensive consultation and quality assurance. We used that methodology to calculate our VCR.

We must review the 2019 VCR methodology before updating the VCR and update the VCR by 18 December 2024.

Background

VCR seek to reflect the value different types of customers place on reliable electricity supply under different conditions. VCR play an important role in ensuring customers pay no more than necessary for reliable energy, helping energy businesses identify the right level of investment to deliver reliable energy services to customers.

Scope of the review

Our 2024 VCR methodology covers standard power outages (up to 12 hours) in the National Electricity Market (NEM) and the Northern Territory.

Most outages customers experience in the NEM and the Northern Territory originate in distribution networks. Consequently, the standard outage VCR have a wide application, including as an input for cost-benefit assessments, such as those applied in regulatory tests that assess network investment proposals.

The AER will separately undertake work to address outages that are longer than 12 hours. For example, storm-related outages in Queensland (December 2023 - January 2024) and Victoria (February 2024), where some customers experienced prolonged outages, highlight the importance of this work. 

Progress

  • Ahead of our 2024 VCR review, we issued an information notice on 14 December 2023 to provide stakeholders with information on the background, reasoning, and scope of the review.

  • On 22 March 2024 we published our first draft determination on the VCR methodology, commencing formal consultation using the expedited rules consultation procedure. We set out our proposed amendments to the 2019 VCR methodology, our rationale for the amendments, and our reasons for considering the proposed amendments a Non-material Proposal under the National Electricity Rules. 

  • On 21 May 2024, we published a notice of our decision to switch to the standard rules consultation procedure for the 2024 review. The decision followed stakeholder feedback and allows additional consultation opportunities and further consideration of issues raised by stakeholders. The first draft determination is now considered a consultation paper.

  • On 5 June 2024, we published our revised draft determination on the VCR methodology, responding to key points raised by stakeholders in response to the first draft and identifying several areas where we consider further stakeholder views would be valuable.

Key Documents

2023-12-14 AER - Information notice - 2024 VCR review

Document
We've released an information notice to tell our stakeholders about our thinking and next steps for the 2024 Values of Customer Reliability (VCR) review.

2024-03-22 AER - Consultation paper (first draft determination) - 2024 VCR methodology

Document
Our first draft determination commenced our formal consultation for the VCR, setting out our proposed amendments to the methodology for 2024.
Authors
AER

2024-05-21 AER - Notice - consultation procedure change for 2024 VCR review

Document
The standard procedure allows additional consultation opportunities for the 2024 VCR review and further consideration of issues raised by stakeholders.
Authors
AER

2024-06-05 AER - Revised draft determination - 2024 VCR methodology

Document
The revised draft follows our consultation paper from 22 March 2024 and our switch to the standard rules consultation procedure. Submissions close on 3 July 2024.
Authors
AER
Updated