Essential Energy - Cost pass through - critical infrastructure licence conditions

Commencement date: 
28 September 2021
Effective date: 
1 July 2022
Service provider/Asset: 
AER General Inquiries
AER reference: 


On 28 September 2021, Essential Energy submitted a cost pass through application to the AER seeking to recover costs in relation to new licence conditions, which require it to strengthen its cyber and physical security (critical infrastructure licence conditions). Essential Energy must achieve full compliance with the critical infrastructure licence conditions by 30 June 2024.

On 31 March 2022, the AER released its decision on Essential Energy’s critical infrastructure licence conditions cost pass through application. The AER has determined that the introduction of the critical infrastructure licence conditions is a service standard event, and also a positive change event under the National Electricity Rules. As part of our determination, we have excluded proposed capex and opex costs of $4.5 million ($2020–21) which Essential Energy included in its application for physical or property related measures as we are not satisfied these costs are incremental and clearly distinguishable from business as usual costs.

The AER has approved a pass through amount of $30.6 million ($nominal, smoothed) to be recovered as follows over two regulatory years:

  • $14.9 million ($nominal) to be recovered in 2022–23
  • $15.7 million ($nominal) to be recovered in 2023–24.