The National Electricity Rules (NER) specify that electricity network service providers must allocate costs in accordance with cost allocation methods. The network service providers must prescibe how they will allocate their costs between the different services that they provide for the purposes of regulation.
The AER is required to assess the cost allocation methods to ensure that:
- they are in accordance with the requirements of the National Electricity Law (NEL) and NER; and
- gives effect to and is consistent with the AER's Cost allocation guidelines.