ActewAGL Distribution - Determination 2014-19 - Remittal

  • Accepting submissions
Sector: 
Segment: 
Commencement date: 
16 August 2017
Regulatory period: 
1 July 2014 to 30 June 2019
(5 years)
Status: 
Contact: 
General enquiries – NSW/ACT Remittals NSWACTremittal@aer.gov.au
AER reference: 
62670

Overview

The AER is required to remake its decision on the electricity distribution determination that applies to ActewAGL Distribution for the period 1 July 2014 to 30 June 2019 (the remittal).

On 19 October 2017, the AER commenced consultation on issues related to the remaking of our operating expenditure (opex) final decisions for electricity distributors – Ausgrid, Endeavour Energy and ActewAGL – for the remittal. The issues paper progresses opex specific matters since the Full Federal Court’s decision in May 2017, requiring us to remake our final decisions for opex and return on debt.

The AER expects to commence the return on debt remittal work after the Australian Competition Tribunal hands down its decisions for ActewAGL Distribution’s ACT gas network and Jemena Electricity Networks.

Invitation for submissions

We invite energy consumers and other interested parties to make submissions on our opex issues paper by close of business EDST on Thursday 30 November 2017 by email to NSWACTremittal@aer.gov.au.

Background

In April and June 2015 the AER published final decisions on distribution determinations for NSW and ACT electricity distributors (Ausgrid, Endeavour Energy, Essential Energy and ActewAGL Distribution) for 2019-24, and on the access arrangement for the NSW gas distributor, Jemena Gas Networks for 2015-20.

All five businesses sought merits review of the AER’s final decisions. The Public Interest Advocacy Centre (PIAC) also applied for review of the AER’s NSW final decisions. The Commonwealth minister intervened.

The Tribunal handed down its decisions in February 2016 (and March 2016 for JGN). It remitted the decisions back to the AER to be remade, in particular in accordance with its orders regarding the return on debt; the value of imputation credits (gamma), which is relevant to the businesses’ tax allowance; the four electricity distributors’ operating expenditure (and for ActewAGL the implications of this for the Service Target Performance Incentive Scheme); and aspects of JGN’s capital expenditure.

In March 2016 the AER sought judicial review of the Tribunal’s decisions on gamma, return on debt and opex in the Full Federal Court.

The Court upheld the AER's appeal in respect of the Tribunal's construction of the rules regarding gamma, which feeds into the businesses tax allowance. The Court dismissed the AER's appeal in relation to the return on debt and the operating expenditures of the electricity businesses.

The AER must now revisit its decisions on return on debt; the four electricity distributors’ operating expenditure (and for ActewAGL the implications of this for the Service Target Performance Incentive Scheme); and aspects of JGN’s capital expenditure.