Essential Energy - Annual pricing 2017-18

Sector: 
Segment: 
Status: 
Commencement date: 
3 April 2017
Effective date: 
1 July 2017
Contact: 
AER General inquiries AERInquiry@aer.gov.au
AER reference: 
61867

Overview

On 3 April 2017, Essential Energy submitted to the AER an annual pricing proposal for the New South Wales electricity distribution network for the period 1 July 2017 to 30 June 2018.

On 5 May 2017, Essential Energy submitted a prices report.

On 8 May 2017, the AER accepted an enforceable undertaking from Essential Energy.

On 16 May 2017, the AER published the approved Essential Energy 2017-18 pricing proposal. This was after the AER assessed Essential Energy's pricing proposal as compliant with its enforceable undertaking and its approved 2017-19 Tariff Structure Statement.

The AER and Essential Energy have developed a new enforceable undertaking which sets out how Essential Energy's revenues and network tariffs will be determined from 1 July 2017 to 30 June 2019. The enforceable undertaking also obliges Essential Energy to continue to provide network services consistent with the non-price terms and conditions of its 2015-19 electricity distribution determination. A similar approach was undertaken for the period 1 July 2016 to 30 June 2017. The main change is that the new enforceable undertaking will facilitate the application of Essential Energy’s Tariff Structure Statement which takes effect on 1 July 2017.

Essential Energy offers the enforceable undertaking because in February 2016 the Australian Competition Tribunal set aside the AER’s May 2015 distribution determination decision for Essential Energy. Subsequently, the AER sought judicial review of the Australian Competition Tribunal decision in the Full Federal Court of Australia and the outcome of this review is yet to be handed down. An enforceable undertaking can set out placeholder arrangements that provide transparency and certainty over network tariffs, on an interim basis, until the allowed revenue that Essential Energy may ultimately recover from customers is determined through the appeals process.

The AER's approach to establishing new interim arrangements through entering into new enforceable undertakings with the ACT and NSW electricity distributors was set out in an open letter published on the AER's website in April 2017.