Power and Water Corporation - Cost Allocation Method 2018

Commencement date: 
13 February 2018
Effective date: 
1 July 2019
AER reference: 


On 1 July 2015 responsibility for economic regulation for PWC’s electricity distribution network was transferred to the AER. Under Chapter 6 of the National Electricity Rules (NER) Northern Territory and clause 3.1 of the AER’s Cost Allocation Guidelines, PWC is required to submit a CAM (cost allocation method) to the AER for approval.

On 24 November 2017, PWC submitted its proposed CAM to the AER for approval. The CAM reflects PWC’s multi-utility corporate and organisational structure. The CAM governs the manner in which PWC is allowed to allocate costs to the electricity distribution services it provides. Allocation of costs between services is required to accurately represent the costs incurred in providing those services. This prevents cross-subsidisation between distribution services and other services PWC provides.

We studied PWC’s proposed CAM to assess its compliance to the requirements of the NER Northern Territory and the AER’s Cost Allocation Guideline. We have approved PWC’s CAM and the details of our assessment are set out in the AER decision paper.