Jemena Gas Networks (NSW) - Access arrangement 2015-20 - Remittal

  • Accepting submissions
Sector: 
Segment: 
Commencement date: 
25 August 2017
Regulatory period: 
25 August 2017 (5 years)
Status: 
Contact: 
General enquiries – NSW/ACT Remittals NSWACTremittal@aer.gov.au
AER reference: 
62669

Overview

The AER is required to remake its decision on the access arrangement that applies to Jemena Gas Networks (JGN) for the period 1 July 2015 to 30 June 2020.

On 21 December 2017, the AER put out its position paper and invited submissions from interested parties on issues related to the remaking of our debt decision for electricity distributors – Ausgrid, Endeavour Energy, Essential Energy and Actew AGL - for the period 1 July 2014 to 30 June 2019 and Jemena Gas Networks for the 2015-20 access arrangement period.

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 cost of 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.

An issues paper on capital expenditure will not be released. The AER will release its draft decision on capital expenditure together with its decision on debt in 2018. The AER will host a roundtable meeting with Jemena Gas Networks and the Consumer Challenge Panel (subpanel 10) in January 2018, ahead of the draft decision.