Dispute between Sietel Limited and United Energy for the upgrade of electricity supply

Sector: 
Segment: 
Category: 
Dispute
Release date: 
1 August 2011
Outcome: 

Final decision - 1 August 2011
The AER received notification from Sietel Limited that it was withdrawing its complaint to the AER because Sietel and United Energy reached mutually agreeable terms for the substation lease. Therefore, the AER was not required to make a final decision in regard to the fairness and reasonableness of the lease terms originally offered by United Energy to Sietel.

Overview

Sietel Limited sought the upgrade of an existing electricity substation on its premise from its distribution network service provider United Energy. United Energy offered the upgrade under its standard lease term of 30 years plus a 30 year option over the land where the substation is currently located and the new transformer would be located.

Sietel does not consider that 30 year lease with option is reasonable and sought AER’s opinion on this matter. Under United Energy’s Electricity Distribution Licence, if a dispute arises, any question as to the fairness and reasonableness of such terms and conditions is to be decided by the AER.

Draft decision - 7 March 2011
On 7 March 2011, the AER released a draft decision paper on the fairness and reasonableness of United Energy’s offer to Sietel.

Submissions to draft decision
Submissions closed 6 April 2011. The AER received three submissions to its draft decision.