On 3 April 2017, Essential Energy submitted to the AER an annual pricing proposal for the New South Wales distribution network for the period 1 July 2017 to 30 June 2018.
The AER is currently working with Essential Energy to develop a new enforceable undertaking which will set out how its revenues and network tariffs will be determined from 1 July 2017 to 30 June 2019. The enforceable undertaking will also oblige 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 is expected to facilitate the application of Essential Energy’s Tariff Structure Statement which takes effect on 1 July 2017.
Essential Energy will offer 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 expects to finalise Essential Energy’s new enforceable undertaking in the near future. Once that undertaking is finalised, the AER will then assess Essential Energy's pricing proposal for compliance with its enforceable undertaking and its approved 2017-19 Tariff Structure Statement.