Essential Energy - Annual pricing 2018-19

Sector: 
Segment: 
Status: 
Commencement date: 
3 April 2018
Effective date: 
1 July 2018
Service provider/Asset: 
Contact: 
AER General inquiries AERInquiry@aer.gov.au
AER reference: 
63699

Overview

On 3 and 4 April 2018, Essential Energy submitted to the AER an annual pricing proposal for the New South Wales electricity distribution network for the period 1 July 2018 to 30 June 2019.

On 8 May 2017, the AER accepted an enforceable undertaking from Essential Energy for apply for the two years 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019.

The AER and Essential Energy developed an 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 decision has been remitted to the AER to re-make. 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.

The AER will now assess Essential Energy's pricing proposal for compliance with its enforceable undertaking and its approved 2017-19 Tariff Structure Statement.

Decision

On 18 May 2018, the AER published the approved Essential Energy's 2018-19 pricing proposal.