On 30 April 2015, we released our final decision on Ausgrid's distribution determination for the 2014-19 regulatory control period.
On 20 May 2015 the AER wrote to the NSW and ACT network businesses setting out how it proposes to correct a small number of administrative errors in its 30 April determinations. This is to ensure that the associated legal documents accurately reflect its decisions.
In May 2015, Ausgrid applied to the Australian Competition Tribunal for merits review and the Federal Court for judicial review of the AER’s final 2014-19 distribution determination. The tribunal made its decision on 26 February 2016. It remitted the decisions back to the AER to be remade in accordance with its orders as to the value of imputation credits (gamma), return on debt and operating expenditure (opex).
In March 2016 the AER applied to the Federal Court for judicial review of the Australian Competition Tribunal decisions to set aside the NSW and ACT electricity and gas distribution network revenue determinations. In May 2017, the Full Federal Court handed down its decision on the AER's appeal of the Tribunal decision. The Court upheld the AER's appeal in respect of the Tribunal's construction of the rules regarding gamma. The Court dismissed the AER's appeal over the Tribunal's ruling on return on debt and opex of the electricity businesses. The AER must therefore revisit its decision on these matters.
During the regulatory control period, Ausgrid’s revenue allowance may be amended for certain events by adjusting the post-tax revenue model. These events include the annual update for the return on debt, and any cost pass through or contingent project applications. The Updates milestone identifies the events related to this distribution determination and provides links to the adjusted post-tax revenue model. The most recent update added to the AER website was published on 3 December 2015.
The AER is required to determine the revenue allowance for Ausgrid under the National Electricity Rules. The AEMC deferred the full regulatory determination process for Ausgrid’s next regulatory control period (2014–19). As part of the transitional arrangements, the AER determined a placeholder revenue allowance for a transitional regulatory control period (1 July 2014 to 30 June 2015) on 16 April 2014.
Following receipt of Ausgrid’s regulatory proposal on 31 May 2014, the full determination process commenced. The AER assessed the revenue allowances for the whole regulatory control period (1 July 2014 to 30 June 2019). In the full determination, the AER trued up any difference between the placeholder revenue allowance for the transitional year and the revenue requirement for the transitional year that is established in the full determination process.